One of the biggest challenges facing Google (NASDAQ:GOOG) is click fraud. As you know, Google makes its money through Google AdWords. A lot of these AdWords inventory is made possible from the display network Google runs through its AdSense program.
There are a lot of opportunities for fraud in both the Google AdWords and AdSense programs. In AdWords, it’s very tempting for competitors to use a variety of tricks to click their competitors’ paid ads. They know full well that when their competitors’ ads are clicked, those competitors have to pay money for those clicks. It’s in their interest to jack up the click volume of their competitors so those competitors will deplete their ad budget, and their own ads will show up at the top. On the AdSense side of the equation, the actual AdSense publishers can engage in all sorts of shenanigans to click their own ads using proxies or a tricked traffic to gain revenue from Google.
Google is in serious need of a fraud detection technology. What makes this field so lucrative is that it’s not just Google. There are affiliate programs that pay based on sales. Other affiliate programs pay based on emails being entered into email collection forms. Regardless of the affiliate program and the nature of the program, fraud is rampant.
The good news is that there is technology out there. If you’re looking for investment opportunities, you might want to consider startups that research technology that would detect fraud and guard against fraud. These technologies can take the form of platform-specific and nonplatform-specific systems.
One of the biggest opportunities in this particular technology field is mobile traffic. Just as scammers manipulate website traffic to engage in affiliate fraud, they are also mobilizing mobile traffic. Any mobile-specific fraud detection company might be worth investing in.