arieng - 4:18 pm on May 13, 2009 (gmt 0)

Google only "catches" about 2%

Isn't smart pricing in essence the ultimate fraud prevention scheme? Google doesn't seem too concerned about click fraud. I always thought that it was because smart pricing was doing the job just fine in the long run.

Fraudulent clicks by definition don't convert into sales. So inflating your clicks fraudulently lowers your conversion rate, and in turn discounts the value of ALL your clicks. Get too low, and Google cuts you off.

They don't really need to proactively chase fraudulent clicks. Its built into the automated process, and in the long run it will balance out.