This is the second of a two part piece, read part one to find out what click fraud is and what it means to Google and advertisers.

I may be way off base, but I see a link between the recent launch of Google Analytics and an attempt to reduce click fraud (bear with me, it’ll take a bit of explaining). I’m not the first person to come up with this idea, many have written about how the extra insight into your site visitors provided by Google Analytics data would help to sort the fraudulent-chaff from the genuine-wheat in click through visitors. But I think there may be something more…

Much has been written about the free Google Analytics and that the web stats information it provides is streets ahead of other competitors in the zero cost bracket, never mind those competitors in the $100k/year bracket that its features resemble. One of those features is to track visitors through to specific ‘target’ pages, those pages that make you money.

Click through fraud is a difficult problem to tackle, but Google must tackle it if they don’t want to see advertisers scared off and their profits eroded. The incentive for fraud by website owners is only available because the fraudulent clicks cost them nothing but gain them something (the fee). That equation could be changed if there was a cost to the fraudulent clicker, that is if the cost to the fraudster was greater than the benefit they wouldn’t bother.

This idea depends on the conecpt that Google may be moving from a pay-per-click model (which was revolutionary in its time) to a model of pay-per-lead (the new revolution). That is that you, as an advertiser, don’t pay Google every time one of their AdSense ads brings a user to your site, instead you pay them only when that visitor completes a certain task that is important for your business. That task could be to sign up for your newsletter or to buy one of your platinum pack widgets. The point is that the advertiser has to use Google Analytics on their site to participate in this program, that’s how Google gets to know whenever an AdSense ad generates a ring-the-bell lead. For example when that visitor gets to your ‘thanks for paying us $1,000′ page. (All ideas in this paragraph are courtesy of Ken Schafer who writes at onedegree.ca, who outlined them at BarCamp Toronto).

So what I’m saying, in my long winded fashion, is that: Google Analytics allows Google to track exactly what’s happening on an advertiser’s site. That tracking means that Google and the advertiser can agree to a value for profitable event x (AdSense driven visitor buys widget) because they can tell when this occurs using Google Analytics (visitor y comes from AdSense link and ends up on widget purchase confirmation page). That in turn means that AdSense click fraud now has a cost for the fraudster to hit the payout bell (either in terms of effort, more than just a click, or money required, buy a widget) and becomes less attractive to fraudsters.