Click fraud highlights bigger issue for industry: lousy leads

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Click fraud unquestionably hurts online advertising, in tangible and intangible ways. The tangible: Google agreed to return $90 million to advertisers involving fraudulent clicks. The intangible: Doubt is cast over the industry as major players seek a way to curtail the activity.

If the aggregate $90 million figure is too large to feel real, consider a Los Angeles attorney I recently spoke with. He lost $1,500 to click fraud, and he had to sue to get it back - costing him money and time. That matters to an advertiser with a targeted campaign and limited budget.

But click fraud is just one aspect of a larger challenge facing advertisers: how to get quality leads online. There's fraud, and then there's activity that isn't fraud - but it's not quality, either. Consider a basket of strawberries. The buyer knows he is paying for the big, juicy ones on top, but also knows that a few bruised ones will be at the bottom. There's no way to guarantee 100 percent perfection - with strawberries or leads - but the onus is on the seller to be fair and provide value.

Search engines and online directories want to protect the value of the products they sell - the leads. Many are incorporating procedures to ensure quality. To regain control, advertisers can choose to spend their money with lead generators that function as true partners in helping companies find customers online. Here are things to look for:

• A fair, fast credit system. Work with partners who make it easy to get credit for fraudulent clicks or questionable calls.

• Prices that account for potential fraud. If a lead generator or search engine determines that 10 percent of its leads are fraudulent, that should be priced in from the start. For example, 10 leads should sell for the cost of nine. Transparency is the key.

• Quality control standards. Find out whether a lead generator has established measurements for quality, such as the lead is billable only if the call lasts at least 30 seconds, or if the click reaches two Web site pages. As long as standards exist, you know what you're agreeing to pay for.

• Filtering. Work with search partners who analyze appropriate metrics to identify the merchants most likely to be relevant to a particular consumer's search, even if it means you're left off certain search results lists. A refining process delivers qualified leads of motivated consumers.

Quantity should take a back seat to quality in online lead generation.

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