Google's Wonderland: Trouble In Paradise?
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The fairy tale existence of Google is starting to experience shockwaves.
So, what's the source of these shockwaves? Click fraud. As my readers know, I've written several articles on the subject of click fraud, suggesting that since it's the market leader, Google should take a more proactive approach with the problem of click fraud.
Until now, Google has been mostly quiet about the subject, issuing this single statement to the Securities and Exchange Commission:
"We are exposed to the risk of fraudulent clicks on our ads. We have regularly paid refunds related to fraudulent clicks and expect to do so in the future. If we are unable to stop this fraudulent activity, these refunds may increase. If we find new evidence of past fraudulent clicks, we may have to issue refunds retroactively of amounts previously paid to our Google Network members."
So, why isn't Google doing more about click fraud? In one of my articles, I theorized that with the amount of money involved, it's actually more cost effective for Google to issue an occasional refund to its advertisers, than to develop technology to eliminate click fraud.
That theory was echoed in a recent article, in which the author wrote:
"Google's primary defense against click fraud has been to refund advertisers their money if they complain and Google sees evidence that fraudulent clicks have occurred. The problem with this is that the burden of proof is on the advertiser ... and Google knows that most advertisers will not take the time to argue.
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