Business Week is running some pretty fascinating articles about click fraud, basically a situation where it’s doubtful that the people clicking on a company’s ads are really people interested in the advertised websites and products.

I have definitely been noticing many splogs showing up lately. These are basically networks of websites serving no purpose other than the display of tons of ads. It’s hoped that you as a web user will land at the lame site through a Google search, realize it sucks, and click on an ad. The hoster of the site gets some money for your click. If you want to see what I’m talking about, just type in the URL of some popular site but spell it wrong. Odds are, you’ll get a splog (I’m not going to link to one).

Although annoying, in regards to click fraud I kind of feel the worries and outrage is overblown. Advertising has always been a questionable expenditure. Say you advertise in print, and spray ads in all the major magazines, costing a company a pile. From there, how the readers of said magazines react to your ad is completely unknowable. They may flip right by the ad, look at it and forget it the next day, or think about looking up the website but never get around to it. Same thing with television. Many viewers may change the channel or get up and raid the fridge every time a commercial comes on.

With online ads however, there are measurable activities, namely the clicks, and then an action once the user gets to the company’s site. They should be thankful they even end up on the site to begin with, even if it is only for a few seconds. That link to the company’s front door alone is impossible with any other form of advertising, and already is a huge advantage over more traditional media.

So I’m not really looking at the fact that 10% or so of online clicks are fraudulent as a big deal. Does this suggest that the vast majority of clicks are from interested parties? Has anybody stopped to measure similar effectiveness of other forms of ads? And the price? I’d bet they were even less effective.

But the bottom line at the end of the day is, after an advertising campaign, did said company see any increase in sales? If not, perhaps online advertising isn’t working. Then it’s just a matter of finding something that will work; not blaming the whole concept.

The other likely action will be a move towards pay per action versus pay per click. This just means that the advertiser will only be paid if a user clicks on an ad and then makes a purchase on the advertiser’s site. Sounds fair. Just a simple change in evaluation and compensation and the problem is solved.

Either way, my point is advertising has always been a big unknown black hole for companies because its effectiveness is so difficult to track. Now that it is finally trackable to some degree online, companies should look at the advantages the other forms of advertising. The mere fact that someone typing “organic apples” in Google can go from there to ending up at your grocery store website within seconds is still pretty darned handy, if you think about it.

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