Abstract

Online sponsored search has emerged as a dominant business model for majority of search engines and as a popular advertising mechanism for online retailers. However, sponsored search advertising is being negatively impacted by click fraud which involves the intentional clicking on sponsored links with the purpose of gaining undue monetary returns for the search engine or harming a particular advertiser by depleting its advertising budget. While search engines tend to compensate advertisers to an extent for click frauds, it still leaves an element of uncertainty in the minds of advertisers whether search engine is being faithful in reporting the click fraud numbers. Armed with additional data available from third party click fraud audit companies, advertisers may have more reasons to suspect click fraud numbers reported by search engines if there is a discrepancy between the numbers reported by two sources (search engines and third party click fraud audit companies). While the phenomenon of click fraud has been acknowledged to exist, its effect on sponsored search advertisers’ trust and their decision to advertise with a particular search engine has not been given sufficient attention in the literature. As an initial step, in this research in progress study, we develop a theoretical model to examine the effect of click fraud on advertiser’s trust in search engine and its subsequent impact on advertiser’s decision to adjust advertising spend for different search engines. In this paper, we also outline the proposed experimental design to validate the theoretical model subsequently in future. Broadly, the research suggests that sponsored search advertisers are likely to adjust their advertising spend based on level of trust they have in search engine, click fraud numbers discrepancy, and return on investment obtained from advertising on that particular search engine.

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