The Risky Business of Pay-Per-Click Advertising

Includes: AABA, GOOG
by: Paul Kedrosky

The WSJ took a small business perspective on click fraud yesterday, doing the usual anecdotal empiricism thing of citing a few small-business owners who think they have been the victim of fraudulent clicks. Perhaps more worrisome for the pay-per-click [PPC] business is that the WSJ quotes approvingly someone who says that cost-per-action ads are a possible replacement.

There continues to be more noise here than substance. But without a loud, public defense at some point from Yahoo (YHOO), Google (NASDAQ:GOOG), et al., the real risk is that the PPC search vendors gradually lose a perceptual default decision, with it becoming "a given" that pay-per-click ads are risky business, perhaps too risky for many companies.