The New York Times wrote earlier this month about Microsoft’s click fraud civil suit. According to Microsoft’s complaint, click fraud or pay-per-click fraud “is an industry term used to describe a type of internet crime that occurs in PPC (“pay-per click”) online advertising when a person, automated scripts, or computer program imitates a legitimate user of a Web browser by clicking on a sponsored site for the purpose of generating a CPC (“cost-per-click”) without having actual interest in the target of the sponsored site’s link.”
In this case, the defendants allegedly worked for companies with low rankings in the sponsored links section for Microsoft’s Live search. The defendants made it look as though hundreds of people were searching the same keywords on Live in a very short period of time, which exhausted the advertising budgets of the highest ranked advertisers and allowed the defendants’ clients to move up the list.
Advertising with sponsored links is less expensive and more targeted than traditional ads, but cases like this one show that the time, place and price of the ad are less controllable and the whole process can clearly be manipulated.