Pardon my rudimentary understanding here, but I sort of assumed in such a wide scale auction, pricing would reflect acceptance of a certain level of fraud, and that the price would balance out at a point where these fake clicks were part of the equation.
Up to a point. After some threshold of noise the system becomes unstable. Similarly, after some threshold of fraud the advertisers lose faith and leave. I.e. mostly shit is not a place you want to be at.
This is basically true, but it's not a perfectly efficient market and it doesn't react immediately. But basically yea, every network has ad fraud and you just build that into your max CPC because at the end of the day everything runs on a CPA/cost-per-conversion basis.
>pricing would reflect acceptance of a certain level of fraud, and that the price would balance out at a point where these fake clicks were part of the equation.
