The technology underpinning the Klondyke gold rush of search engine advertising is "inherently vulnerable" to fraud, according to Alexander Tuzhilin, professor of information systems at the Stern School of Business, New York University.
Tuzhilin, a respected academician whose prior commercial background includes a stint as technologies consultant to Bell Laboratories, was appointed as an expert independent witness by a US court. The move followed a recent legal settlement between Google and one of its advertisers.
The professor's brief by the court was to study the effectiveness of Google's anti-fraud activities. Following that study, he appears singularly unimpressed.
Although concluding that Google's attempts to crack down on illegal behaviour have been "reasonable", Tuzhilin questioned what he called the 'Trust Us' approach of the search engines.
His doubts are sparked by the "inherent conflict of interest between the two parties: the money from invalid clicks directly contribute [sic] to the bottom line of the search engines."
Google itself was not exactly reassuring as to the reliability of its billing methodology. Click-fraud, said ceo Eric Schmidt last week, "is a cost of doing business; we will never get it to zero, we can reduce it and we refund when we discover it."
He then reverted to 'Trust Us' mode: "Frankly, it's under control. It's not material, it's not got any worse."
Concluded Professor Tuzhilin: "The fundamental problem of pay-per-click advertising, based on the impossibility to assess the validity of every single click . . . is compounded by Google's inability to explain in detail why it had charged advertisers for some clicks and not others, since to do so would open it to massive fraud."
Playwright George Bernard Shaw once opined: "A fashion is nothing but an induced epidemic.
Prescient as he was, it is not impossible Shaw had click-though advertising in mind.
Data sourced from Financial Times Online; additional content by WARC staff