How Click Fraud Could Swallow the Internet

Pay-per-click advertising is big, big, big business. So are bogus hits on Internet ads. It’s search giants against scam artists in an arms race that could crash the entire online economy.

Stuart Cauff launched a charter-jet service in Miami Beach back in 2002. Being a 21st-century business, JetNetwork advertised on the Internet, especially on search engines. Anyone who Googled, say, "air charter Miami" would be greeted with the familiar list of search results and, in a separate place, a plain box of text with a blue hyperlink to JetNetwork’s Web site.

Search ads were perfect for Cauff’s business. His potential customers – a diverse group of celebrities, photojournalists, medical evacuees, and people who just needed to get away from or to Miami in a hurry – were scattered across the country. To reach this audience with traditional advertising, he would have had to buy time on scores of television and radio stations and space in just as many newspapers and magazines, something that only wealthy, established companies could afford. Even if Cauff could pay for the ads, the vast majority of people exposed to them wouldn’t care about charter jets, so most of his money would be wasted. But with search-based ads, JetNetwork’s name would appear, at least in theory, only before people who were actually interested in Miami charter flights.

By Charles C. Mann

Full Story: http://www.wired.com/wired/archive/14.01/fraud.html