arieng - 3:21 pm on Sep 17, 2007 (gmt 0)

Hmmm...maybe they're not worried about the difference in estimates for a completely different reason. Many AdWords advertisers are using Google's Analytics system too, often in conjunction with their own Analytics software. It links directly to your AdWords account and its a great tool for managing your AdWords spend.

We hear so much from the AdSense forum about Smart Pricing. Maybe they are using that model to combat fraud clicks as well as low-quality traffic.

At its most basic, smart pricing discounts the cost of poor quality traffic from the content network. To do this, Google must incorporate conversion data from its advertisers' Analytics accounts. If they are pegging the price of the content network traffic to match some ratio of ROI to their own search engine traffic, then a site with non-converting traffic earns a lot less per click.

At the same time, this model would automatically discount fraud clicks. A site with normal traffic that sends 4 fraud clicks for every 1 real click would end up having its revenue cut by 80%. The revenue would (in theory) be the same as if the publisher had just sent the 1 real click. There would be absolutely no financial benefit to the click fraud.

If Google feels they have perfected the discounting algorithm, they could completely forget about click fraud as a threat. 10%, 25%, it would make absolutely no difference. They would be right, and all the other click auditors would be wrong.