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HERE'S A PERSONALITY TEST for search engine marketers: When it comes to fraud in pay-per-click advertising, which of the following statements do you most strongly believe?

A. Click fraud currently is the biggest threat to the Internet economy.

B. Click fraud will correct itself, thanks to market forces that will lead advertisers to pay less for more fraud-prone keywords.

C. Better tools and metrics will help reduce the problem of fraud in PPC advertising.

D. The PPC model never will be able to bring fraudulent ad clicks down to zero. But given that limit, the engines are doing the best they can to provide better protection.

E. Click fraud is just another form of inefficiency in ad spending, and thus a cost of doing business — unfortunate, but not enough to steer you away from the channel.

If you identify most closely with the first statement, you're a George Reyes type. He's the Google chief financial officer who caused a stir by taking the click-fraud threat seriously at an analyst conference in December 2004. It was a major PR grenade at the time, coming a week after Google sued one of its AdSense Web publishers for fraud, complete with trumpets for its own vigilance in “protecting our advertisers and the integrity of our programs.” Reyes' was pretty much the first acknowledgment by a search engine insider of the seriousness of the fraud problem. And, if memory serves, it also was the first slip in the upward climb of Google's stock price after its initial public offering in April of that year.

Are you a free-market advocate? Choosing B makes you an Eric Schmidt. Google's CEO said in a talk at Stanford University last March that the click-fraud problem contains its own solution in the auction model. “Eventually, the price the advertiser is willing to pay for the conversion will decline because the advertiser will realize that these are bad clicks….So over some amount of time, the system is in fact self-correcting. In fact, there is a perfect economic solution, which is to let it happen.”

Maybe so, eventually — but as someone once said, in the fullness of time, we're all dead. Click fraud has morphed from a competitive black op into a full-blown for-pay scam along the lines of phishing. It's supported by sophisticated software that can make robot clicks look damn human. How are advertisers, especially those without the IT chops of the Fortune 1000, going to get the information that will let them spot the phonies?

Do you put your faith in better measurement and systems (option C)? Then we'll call you a Jessie Stricchiola. She's the president of search marketing firm Alchemist Media who first brought up click fraud as an SEM concern back in 2002. That's so long ago that the case she outlined was againstGoto.com, which later became Overture and is now Yahoo! Search Marketing. Stricchiola's firm is collaborating with Fair Isaac, the credit-rating folks, and the Search Engine Marketing Professional Organization to devise a way to “rate” the fraud in clicks, as a means of helping advertisers understand the risks they run with a given PPC campaign on a specific engine.

I'm sure such a system will be a boon to search marketers. (Hell, it would be a help if it simply cut back on the myriad estimates of the size of the click-fraud problem which appear almost weekly and make news by being either larger or smaller than the previous studies.) But adding another layer to the already complex task of mounting a PPC campaign may be too much elaboration for many SEMers. When Stricchiola outlined the plan for a rating system to an ad:tech audience in April and asked for a show of hands from those who'd be interested, the response could only be called “thin.” (In fact, another panelist had to interpret the question.)

Did you agree with option D? You pragmatist, you — you're an Alexander Tuzhilin. He's the NYU professor of information science commissioned by Google to report on its fraud-protection measures as part of the Lane's Gifts class-action settlement that went into effect in late July. His independent report found that auction-based PPC advertising has a built-in flaw in the search engines' inability to see what clickers do on advertisers' Web sites. But he also notes that the engines have access to other querying and clicking data that other parties don't, and no one has any better view of the entire clickstream on a PPC ad. Given that, he says, Google's efforts seem to be “reasonable.”

It's the old problem: Half the data needed to spot fraud lives with the search engines, and the other half with the advertiser who sees what a clicker did on the Web site. Neither party wants to share with the other — the engines for fear they'll be teaching fraudsters how to commit their scams better, and the advertisers from concern that sharing specific conversion data will bump up their keyword costs. Since neither side is likely to extend the love, search engines like Google may be left to make their best efforts using the data they can see from inside their black boxes.

Find yourself agreeing most with statement E? You're a John Wanamaker, the department store magnate who famously said that half his spending on advertising was wasted, adding “I just wish I knew which half.” You're confused and perhaps worried about click fraud, but not enough to keep you from using a marketing medium that's growing more central every day to your competitors and consumers.

If so, good luck to you, because the trends seem to be in your favor. The engines finally are stepping up to their responsibilities for keeping the markets they created clean. New tools are on the way. And who knows? The free-market effect may even kick in ahead of schedule.

Besides, Wanamaker's may not exist anymore, but you can be fairly certain the company's 120-year life wasn't cut short by wasted ads.