Marketing metrics suck. Take 183:

Internet marketers facing higher advertising fees on search networks are becoming increasingly concerned about a form of online fraud that was thought to have been contained years ago.

An indepth article by Stefanie Olse of CNET News.com about the practice known as "click fraud" that began in the early days of the Internet's mainstream popularity with programs that automatically surfed Web sites to increase traffic figures. Some marketing executives estimate that up to 20 percent of fees in certain advertising categories continue to be based on nonexistent consumers in today's search industry.

According to the article, although the extent of click fraud is impossible to measure with any certainty, its persistence has exposed a fundamental weakness in the promising business of Internet search marketing. Google's pending initial public offering has been widely anticipated as a barometer of online advertising and the post-apocalyptic dot-com climate in general. John Squire, vice president of business development of Coremetrics, a Web analytics firm says:

It's hard to tell how big the problem is, but people are looking at it closer and closer as the cost of search advertising goes up. Click fraud is a fin sticking out of the water: You're not sure if it's a great white shark or a dolphin.

The article points out that unlike advertising in traditional media such as billboards and print publications, "cost per click" Internet ads displayed with specific keyword searches have been promoted as a definitive way for companies to gauge their exposure to potential customers.

As a result, U.S. sales from advertiser-paid search results are expected to grow 25 percent this year to $3.2 billion, up from $2.5 billion in 2003, according to research firm eMarketer. From 2002 to 2003, the market rose by 175 percent.

As more advertisers have competed for desirable keywords in their industries, the cost for clicks has risen too. On average, advertisers are paying 45 cents per click this year, according to financial analysts, up from 40 cents in 2003 and 30 cents in the second quarter of 2002. In certain sectors, such as travel, legal advice and gaming, the cost can reach several dollars per click. Jessie Stricchiola, president of Alchemist Media, a search-engine marketing firm based in Los Angeles that specializes in fraud protection argues:

There's a fatal flaw in the cost-per-click model because a ton of marketing dollars can be depleted in a fraction of a second. Technology is continuing to be developed that can exploit this pricing model at incredibly high volumes.

There is much more, with cases, arguments and diagrams. Well worth a read.

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