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‘insidious’ Google pay-per-click fraud discovered by Ben Edelman

Harvard Business School professor Ben Edelman revealed a new form of click fraud: “a particularly insidious kind of click fraud” that involves a fairly complex combination of paid ads, affiliate traffic brokering, and spyware. According to Edelman, “Unlike most click fraud, this scheme actually leads to sales on the advertiser’s web site — making it harder to identify than traditional click fraud. But if the sale happens, it only happens after the buyer has been passed from site-to-site through a series of affiliates that all take a piece of the pay-per-click fees. As he explains to Forbes. “The retailer may think it can detect click fraud by a low sales conversion rate,” says Edelman. “But here, the traffic converts. Based on that high conversion rate, they might even decide to raise their bid [in Google’s advertising auction system] and have no way to realize that it’s all a ruse.” A Google spokesperson responded in an e-mailed statement that it’s the company’s policy “to prohibit [advertising] partners from being associated–whether directly or indirectly, intentionally or unintentionally–with parties who buy traffic in ways that cause a poor user or advertiser experience,” and that it responds quickly to any violations of that policy.

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