Quality click: a shift in the advertising market

Here is the opportunity: how do you eliminate 50% of fraudulent clicks that you pay when you buy a campaign on Google?

Well, to put things in perspective, 50% seems a lot, but it is not much compared to more than 50% which is lost on TV ads, and who knows how much which is lost on traditional banner ads sold on cpm (cost per thousand banner displayed).

So, really, the opportunity here is: how to enhance the efficiency of advertising by recouping at least some of that 50%? It seems like a great business opportunity.

Well, part of the answer might be social networks, which up to now have not delivered as much as the hype surrounding them (disclosure: I have some experience, having founded and then sold the largest blogging and community platform in Italy).

Right now, Google makes a lot of money on ads displayed on searches and ads displayed on partners sites. Ads on searches will always be more lucrative because they are based on the declared intention, whereas ads displayed based on generic contextualization of the content of the page which is being visited, most of the times is not related to what you are interested in.

But ads displayed on partners sites, where I presume most of the 50% fraud takes place, could be served in a different way. That's where Facebook comes in: if you know everything about the person, well not everything but at least you track the person visiting the social networking site and other sites, then you might be able to track down fraud more easily. So it seems that Facebook could have an advantage on Google if they start implementing a partner ad network.

Of course, Google's big advantage is the number of advertisers they have now, which will be difficult for Facebook to build, but now, at least, a venue for monetizing social networking sites is emerging; well, maybe!