If Google moved to a CPM model, Agoracom would submit a fixed amount it is willing to pay in a given month i.e. $2,500. Our position would be determined relative to monthly budgets of our competitors and not click throughs, thus eliminating all issues related to click-fraud but still maintaining an auction system for best positioning. If my $2,500 represents 25% of the total amount being spent on “Investor relations” this month, then I get 25% of the impressions (context ads) and the bottom 25% placement (search terms).

Nitty Gritty – If the other 75% is made up of 75 competitors with 1%each of the total $ being spent on investor relations, Google would adjust my position accordingly.

At that point, its up to me to decide if I want to increase it to buy my way into a better position. At least I now know that I’m truly competing against my competitors and not click-farms.

With respect to affiliates, Google would simply pay them a pro-rata amount based on number of click-throughs. IIf there is an issue of click-fraud, its up to Google and the affiliates to work it out, not the advertisers.

It’s a slightly less sophisticated model than CPC but it fulfills the objective of advertisers competing for better placement via an auction model that can be changed on the fly.

I predict the CPC model will inevitably collapse as click-fraud worsens through the introduction of more sophisticated schemes.

I’ll go even further and predict that within the next 12-18 months we will see a major bust of a massive click-fraud scheme that will have taken Google and its advertisers for $10,000,000 – $50,000,000. If internatiional crime organizations can find a way to mobilize planes, trains, mules and automobiles to smuggle and sell cocaine while risking death and incarceration, you can bet the farm they are already working on the very simple task of placing people in front of PC’s and having them click on a mouse. Think about it.

Let’s face it, CPC is free money just waiting to be taken by modern day criminals who no longer have to commit a crime to steal money – money that Google is serving on a silver platter.

Best,
George