Click fraud: the perils of the robot shopper

The lawsuits against Google and Yahoo! over "click fraud" raise an old issue in a new setting. The issue is cheating, particularly of advertisers. Apparently, the leading search companies did not take this seriously, or seriously enough. Now they must.

The issue arises because the advertising rate is a fee per click — that is, an amount each time a computer user somewhere in the world clicks on an ad. That was an ingenious way to price advertising, except that the system could be gamed: ads could be clicked for the sole purpose of running up the advertiser's bill. The advertiser wouldn't want that, but a competitor might. It is an unethical and sleazy business practice — but easy. A machine could be instructed to do it. A machine was programmed in just this way for the Internet poll for the design of the Washington state quarter. Three designs were offered in an advisory election. One of them, a stylized orca, surged ahead of the others, with more than half a million votes. Most of the votes, however, were apparently from one computer that did nothing but vote over and over again. When the contest was repeated, the orca design came in last, with 14 percent of the votes.

Imagine if this robot voter were clicking on an ad. That is click fraud. It steals from the ad buyer and puts the money into the pockets of the ad seller. The ad seller may not be doing it, but he has an incentive not to police it.

That Google and Yahoo! failed to police it is the allegation in the lawsuit, which Google has agreed to settle (for $90 million in promotional coupons) and Yahoo! has not.

This has all the appearance of a problem that the industry needs to fix now, without any excuses.