Google “Shrinkage”

The click fraud issue raised by ZDNet has been getting some great commentary. There’s a roundup here.

Some incisive commentary:

“The retail industry is committed to eradicating retail shrinkage….Regarding losses experienced due to charges for fraudulent clicks, however, Google advertisers are considering the negative impact on profits as a “normal” cost of doing business, rather than as a deceptive theft”

Well, some are, and it’s hard to imagine Google are doing nothing about it, but that characterization does  present a PR problem.

Nick also raised a good point, quoting Greg Boser:

“hat doesn’t account for all the big spending advertisers who are bidding to generate leads that won’t produce revenue for quite some time, or advertisiers who are trying to acquire long-term customers. If you remove click fraud for those types of comapnies (who also happen to bid in many of the highest per click spaces) you will not see any of them raise their bids. That money will simply go back into their bank accounts.

And that to me sounds about right. I don’t claim ot be a click fraud expert, but to dismiss it as “self correcting”, whilst appearing to be very neat and clever (particulary as the GOOG biz model depends upon PPC), just doesn’t ring right, and Bosers arguments make a lot of sense in context.”

I haven’t seen Google responding to this, as yet.

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