By: Kim Roach | Source: sitepronews.com

The world of pay-per-click marketing started in 1997 with GoTo.com. Today they are known as Yahoo Search Marketing. What started in 1997 as a way to quickly get listed in the top of the search engines has turned into a 5.6 billion dollar industry in 2005. In fact, about 99% of Google’s revenue comes from advertising.

However, this multi-billion dollar search industry is under attack and has been for quite a while. Click fraud has become the greatest threat to the rapid growth of the paid search marketing sector. The Interactive Advertising Bureau estimates that 20 to 35 percent of ad clicks are fraudulent.

Who’s to blame? Click fraud can come from a variety of sources, including competitors, bots that simulate the human behavior of clicking on ads in web pages, or even friends of the publisher who want to "help" the publisher gain some additional click revenue.

However, the major search engines have received the majority of the blame, even though they are not necessarily responsible.

Yahoo has recently settled a class-action click fraud settlement. Under the settlement, Yahoo advertisers will be allowed to submit click fraud claims dating back to January 2004. Yahoo will reimburse any confirmed fraudulent clicks in cash, with no set limit on the amount of claims it will cover.

This year, Google has been burdened with its own click fraud case to the tune of 90 million dollars. Currently, the court is deciding whether to accept the search giant’s proposed $90 million settlement while roughly 50 plaintiffs are voicing their dissatisfaction with it.

Click fraud is certainly no small matter. It has become larger than the total magnitude of credit card fraud in the U.S.

So far, these law suits have spawned more questions than answers for the ultimate solution to click fraud. Click fraud threatens an entire business model; one that is generating billions of dollars every year.

Pay-Per Percentage

Pay-per-percentage is an advanced form of pay-per-impression. Within this system, someone can bid for a percentage of all impressions for certain keywords or keyword phrases over a specified period of time. In the pay-per-percentage model, click fraud is avoided because the advertiser is not charged any additional amount for clicks. The business model is based upon a percentage of ad impressions.

Microsoft research describes it as:

"A simple method for selling advertising, pay-per-percentage of impressions, that is immune to both click fraud and impression fraud… ads must be shown in a truly random way, across the percentage of impressions purchased..Pre-fix match: a system that is similar to broad-match, but more compatible with pay-per-percentage… auction pay-per-percentage matches, including prefix matches in a revenue maximizing way…make it easier to sell to advertisers."

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