Friday, May 05, 2006

Yahoo Sued for Click Fraud

A class action suit has been filed against Yahoo, and this time the company is alleged to be a willing participate in defrauding customers.

The
suit say that Yahoo knowingly allowed its ads to be used in spyware. Noted click fraud expert Ben Edelman is representing the plaintiffs, so this should be a contentious battle.

As we know, Google settled one of the class action lawsuits for a paltry $90 million, which didn't make advertisers happy.

Advertisers are in a tough position when they have to challenge the very companies that they are dependent on for survival. Boycotting Google and Yahoo limits a company's potential reach, so perhaps they should form a united front and demand lower CPM rates until there is a technology fix.

Advertisers should separately track the clicks from Google or Yahoo versus other referrals, and use the analytics to justify a change in price. For example, if the same ad generates 30 percent more traffic to my site beyond my home page if it runs outside of a particular search engine, then we need to talk.

Right now the search engines have the luxury of abundant supply and demand, but that won't last forever. As long as click fraud continues to be a problem, there will be strong incentive for advertisers to move to pay per action (sale, call, lead).

Posted By Jason Dowdell at 12:26 PM
Permanent Link: Yahoo Sued for Click Fraud | Comments (0)

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