Clicking and Credibility
Using search engines to advertise on the internet is not only hot, it is big business. Very big business. According to an article in Computerworld, paid search engine advertising will be about $4 billion this year, rising to "$15 billion in a few years..." A significant portion of paid search engine advertising is click-based. That is to say, the advertiser pays for each person who clicks on their advertisement.

Winston has a question. How do advertisers know that the search engine is accurately counting and reporting the actual number of clicks? If the click counts were overstated by even a small fraction of a percent, advertisers could be overcharged by millions or even tens of millions of dollars a year.

Winston is not suggesting any wrongdoing nor accusing any search engine company of any malfeasance whatsoever. Instead, he is simply wondering what sort of third-party data quality assurance programs the search engine companies have in place. After all, virtually all other advertising media employ third-party verification measures. Newspapers and magazines have independent auditing of their circulation numbers and radio and television advertisers can look at multiple ratings services that measure program popularity. The question is, what comparable verification mechanism is available to search engine advertisers?

Major search engines are, or will soon be, large public companies. Thus, verifying the quality of click rate data is important not just to advertisers but also to investors. Particularly after the multitude of Wall Street scandals, individual and institutional investors need to be assured that search engine company revenues are based on accurate click data.

To help reassure the advertising and investing public of the integrity of search engine paid advertising data, Winston will be sending letters to major search engine companies asking them to explain their data validation mechanisms, including any third-party auditing. Winston will be sending the letters to Google, Microsoft, and Yahoo. Your humble watchdog looks forward to reporting back on what he learns.