So? What else is new? It's a *stupid* lawsuit. "caveat emptor" applies to the buyer of advertising, just as it does to buyer of the advertised product.
If the buyers "didn't understand" the _inherent_ limitations and inaccuracies of (a) the marketplace, and (b) the particular pricing scheme, they really shouldn't be playing in that market.
_Smart_ web-advertising buyers, have, for *years*, being writing their pay-per-click contracts in a manner which makes it difficult for someone to fraudulently inflate the page click-count.
Yup that's the point. It's *impossible* to do so. Which answers your question about "why aren't people working on better fraud-detection?" Those who have seriously looked at the problem recognize that detecting such actions 'in progress' chews up exorbitant amounts of resources, and costs more than the fraud does. The 'simple' stuff -- e.g. paying only for 'unique' clicks over time -- kills off all but the sophisticated fraudster. The sophisticated fraudster, on the other hand, is effectively _impossible_ to so much as slow down.
It is what the *advertising buyers* have *demanded*. This wasn't some bright idea dreamed up by the folks selling ad space. Fixed pricing is much simpler for _them_ to deal with.
"Poor model" is a term without a referent. _First_ you have to define the goals; only after you have done that, can you attempt to evaluate the 'quality' of the method. With advertisers demanding "$/M" figures or equivalents, to base their buying decisions on, PPC *is* the 'best available' fit to their demands. That the best available technology doesn't live up to their expectations is *their* problem.
Fixed pricing ends up in *exactly* the same position, unless you're paying for your ad to appear *every*time* somebody calls up a web-page at that site.
If you're on a limited budget, and cant afford a "shown on every page" ad, but want 'general' exposure, you can only get that by having you ad appear on 'some' pages And, thus the question becomes "how many times do you want that ad to appear?" whether it's expressed as "so many thousand times", or "such-and-such percentage of the time",
Nielsen NetRatings lacks -- by several orders of magnitude -- having enough reporting sources to produce estimates that are within a factor of _ten_ to _fifty_ for all the various 'keywords' that the search-engines selectively sell ad-space for.
It is *far* worse, in point of actual fact.
The number of samples you have to have, to have a 'meaningful' representation of the population, depends on a number of factors. Of which the size of the population is only one. The number of different categories enters into the picture, as does the relative frequency which the population as a whole touches that category.
For a Presidential election, where roughly 120 million of 220 million voting- age adults did vote, you can get +/- 3% accuracy with a sample size of circa 1,500. For a population of a million, you can get the same accuracy with a circa 500 sample size.
However, to get a similarly meaningful estimate of something where only 1:10,000 of the population uses it, you've got to have a sample that includes enough people that _might_ use it, before you can have any confidence in the numbers. Say that 1:4 of the people who -might- use this thing, use a search engine to find out about it. That means that roughly 1:40,000 people will hit on that keyword. and the underlying population is about 100 thousand, if you assume that 1:5 of those who might use the thing itself, do use it.
To get a meaningful sample on a population of 100K, you need a sample size of a couple of hundred _of_that_population_. to get *that* couple of hundred in a sample of the 'general population' of 220 million, you need about _THIRTY_THOUSAND_ people in the sample. Unless it is a 'scientifically selected' sample, with balanced demographics matching the population as a whole, you at least triple that sample size -- to 'hope' to minimize the effect of distortions in the sample.
TV/Radio numbers are *much* easier to do relatively accurately, because the spectrum of possible choices is much smaller.
Your "inability to picture" is not relevant to the real world.
Spammers, *today*, are routinely _advertising_ access to pools of
50-100 *thousand* zombie machines. "small" pools are only 10,000 machines or so.A large portion of PC viruses currently being spread are for the purpose of turning machines into zombies, for spamming, DDOS attacks, and other kinds of outright criminal activity.
Your "disbelief" is not relevant to the state of affairs in the real world.
Those zombie armies *are* out there, and *are* being used for many kinds of nefarious activities. I don't have any direct knowledge of their being used for click-fraud, But there is absolutely no question that they _could_ so be used.
If the criminal gangs can put together several hundred thousand machines to execute a DDOS attack against a web-site, as _has_ been done more than once. *ALL* they have to do to make it click-fraud is change the URL to point to an ad.
The _typical_ "click-fraud" scheme is to _make_money_ doing it, not to run up the expenses of a competitor.
The way it works:
Somebody puts up a web-site with 'pass through' ads from somebody like Yahoo. Yahoo supplies the ad content -- for people who have bought ad space through their 'syndication' service. When a viewer clicks on the link on that web-site, "somebody" gets some money for it.
The scam comes in when that self-same "somebody" contrives to have _lots_ of clicks happen to that Yahoo-supplied (or whomever) link. They don't care _who_ the advertiser is, or what they're selling, The idea is to run up the revenues for that "affiliate" site owner. At the expense of the syndication seller, and the actual advertiser, of course.