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Isn't click fraud basically solved by the free market? I mean, as more and more bots create fake clicks and impressions, the value of the traffic itself is redu

Isn't click fraud basically solved by the free market? I mean, as more and more bots create fake clicks and impressions, the value of the traffic itself is reduced. This will lower the CPC and CPM and you'll still be able to buy traffic at its free market value. If the traffic becomes worthless, no one will be willing to pay for it. Advertising fraud is basically arbitrage. The fraudsters are inflating the numbers but someone is still willing to pay a specific value for the traffic they're receiving. If a specific market is more prone to fraud, its because the amount publishers are paying is below its actual value.

dangrossman 11y ago
It's "solved" for advertisers who can measure ROI, at least short-term. It's unsolved when the success metric for the campaign is not easily measured, like brand awareness. It's also not solved for the publishers not engaging in arbitrage or fraud who earn less and less per impression. Let it play out unchecked and the bad actors will kill the market by driving all the legitimate suppliers out of business: if ad rates are driven so low that content sites can't pay their staff with the ad dollars, they'll either go out of business or exit the market (i.e. erect paywalls, return to direct ad sales instead of participating in exchanges, etc).
- meritt 11y ago
  > brand awarenesss Exactly. Brand-awareness media buys tend to rely on third-party web traffic "experts" like Alexa, comScore, Hitwise, Quantcast, etc. These tools are incredibly simplistic and count the majority of fraudulent traffic as legit. When a site ranks highly across these experts, it is then used to increase the CPM a brand-advertiser ends up paying.
greglindahl 11y ago
The solution is better analytics. Any market player who can tell the difference between real and fake clicks will be better off than anyone depending on the market to somehow magically save them from increasing fake clicks by decreasing CPC and CPM.
GCA10 11y ago
Yes. I've seen certain areas where CPMs are falling, falling, even as reported traffic is rising. Such sites do whatever it takes to boost traffic some more. They also tend to cycle through a lot of "chief revenue officers" every 18 months or so. It's a nutty way to run a business, but in the short-term it can pay the bills for lots of folks.

dangrossman 11y ago

It's "solved" for advertisers who can measure ROI, at least short-term. It's unsolved when the success metric for the campaign is not easily measured, like brand awareness. It's also not solved for the publishers not engaging in arbitrage or fraud who earn less and less per impression. Let it play out unchecked and the bad actors will kill the market by driving all the legitimate suppliers out of business: if ad rates are driven so low that content sites can't pay their staff with the ad dollars, they'll either go out of business or exit the market (i.e. erect paywalls, return to direct ad sales instead of participating in exchanges, etc).

meritt 11y ago
> brand awarenesss Exactly. Brand-awareness media buys tend to rely on third-party web traffic "experts" like Alexa, comScore, Hitwise, Quantcast, etc. These tools are incredibly simplistic and count the majority of fraudulent traffic as legit. When a site ranks highly across these experts, it is then used to increase the CPM a brand-advertiser ends up paying.

greglindahl 11y ago

The solution is better analytics. Any market player who can tell the difference between real and fake clicks will be better off than anyone depending on the market to somehow magically save them from increasing fake clicks by decreasing CPC and CPM.

GCA10 11y ago

Yes. I've seen certain areas where CPMs are falling, falling, even as reported traffic is rising. Such sites do whatever it takes to boost traffic some more. They also tend to cycle through a lot of "chief revenue officers" every 18 months or so. It's a nutty way to run a business, but in the short-term it can pay the bills for lots of folks.