ClickZ Experts on Paid Search Strategies: "www.clickz.com/experts/search/strat/article.php/3483981

Click Fraud: What It Is, How to Fight It
By Kevin Lee
February 18, 2005

There's a crisis brewing in this industry. Poor click quality has the potential to hit marketers hard and to negatively affect search engines. It manifests itself in many ways, including as network click fraud, competitive click fraud, and mislabeled traffic.

Competitive Click Fraud

Competitive click fraud is a big problem for smaller businesses, particularly when the service provided is of great value (or great lifetime value), resulting in high CPCs (define). Lawyers, doctors, accountants, IT consultants, and, of course, search engine marketing (SEM)/SEO (define) firms all bid in high CPC marketplaces. The higher the CPC, the greater the effect a competitor can have on a specific budget.

Impression Fraud

Impression fraud is the newest threat. Google and other engines rely on an AdRank method of determining an ad's relevance. A competitor pauses his campaign while a sudden fraudulent surge in impressions on your keywords occurs. All these impressions occur with zero clicks. AdRanks for competing ads, including yours, drop through the floor. The competitor waits a bit, then swoops in with a normal ad with a high CTR. Your campaign is entrenched with keywords that are disabled or seriously crippled. So, Google makes an ad position decision based on fake data."

Very interesting points raised - I think the Impression Fraud area will get bigger and bigger in Q2 this year. how to combat this? Better tracking and I also think the Search Engines should also have named contacts to resolve this issue. At present the sole onus is on the web-master or company. Thus iff you have a bad SEO/emarketing agency wrecking your online PoP, forms of redress especially for small online retailers has not been addressed.