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Stop Click Fraud, Bid Less

Posted on 7.10.2006
If you know something about economics then you can see why Google's CEO Eric Schmidt's asserted that click fraud is "self-correcting" and that even if instances of fraud were "rampant", eventually the problem would "fix itself".

"Eventually, the price that the advertiser is willing to pay for the conversion will decline, because the advertiser will realize that these are bad clicks, in other words, the value of the ad declines, so over some amount of time, the system is in-fact, self-correcting. In fact, there is a perfect economic solution which is to let it happen."

I see click fraud in the following way; if you don't like the traffic you are receiving - bid less. You'll take yourself out of the heat of the kitchen and see less fraud as a result. It's not as attractive to those perpretrating fraud to abuse your listings if it's not worth their time.

It's the theory of the efficient market in action.

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