Eric Schmidt Claims The PPC Model is “Self-Correcting” In Terms Of Click Fraud

Donna Bogatin reports that Google’s CEO Eric Schmidt claims that click fraud is “self-correcting.” Meaning,

Eventually, the price that the advertiser is willing to pay for the conversion will decline, because the advertiser will realize that these are bad clicks, in other words, the value of the ad declines, so over some amount of time, the system is in-fact, self-correcting. In fact, there is a perfect economic solution which is to let it happen.

So the “let it happen” quote, in terms of Eric Schmidt saying let click fraud happen, has been buzzing through the blogging community. Schmidt writes off click-fraud as the “cost of doing business.” Maybe he is just very confident of the new AdWords quality scoring?

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