>Fraud drives down conversions/click, which in turn drives down the amount of money one is willing to spend on a click, which in turn reduces demand and drives

>Fraud drives down conversions/click, which in turn drives down the amount of money one is willing to spend on a click, which in turn reduces demand and drives down the price/click of advertising. In an ideal world, yes, but it can also cause businesses to spend _more_ on pointless things like redesigning their ads, buying more ads for other keywords, etc. Then there is the fact of new businesses popping up as other businesses cease to exist. Information asymmetry ensures that not everyone knows about click-fraud, whether it is currently affecting them, how to avoid it, etc. The real world is too messy.