Google's biggest ad problem: Fat fingersDecember 19, 2012: 9:03 AM ET
Many mobile advertisements are clicked on by accident. Google may have finally found a solution.
FORTUNE -- It is one of the chief tech conundrums of the decade: people are flocking away from desktops and laptops and toward mobile devices, but the mobile-ad economy is terrible. Selling ads on smartphones, in particular, is difficult, and they sell for much less than ads served to traditional computers, which already sell for much less than print and broadcast ads. Google thinks it might have a partial solution.
A study released in August by a mobile-ad analytics firm found that about 40% of mobile-ad clicks were "worthless" because of erroneous clicks and click fraud. It's hard to know how accurate that figure is (and the company that conducted the study had an interest in the number being as high as possible), but it's certainly the case that measuring ad effectiveness -- and therefore, knowing how to price ads -- is near-impossible for both reasons.
Google (GOOG) is addressing the so-called "fat finger" problem -- people clicking by mistake when they meant to scroll or click something else -- with a simple solution: a confirmation button that pops up, reading "visit site."
The solution, of course, decreases the number of ads that are served, but it increases the proportion of legitimate clicks. And, Google says, it increases the proportion of ads that lead to actual sales. Since Google is the biggest player in mobile ads, it seems likely that its competitors will end up doing something similar.
Two years ago, the mobile ad market was a potential Valhalla of profit. Now, companies are struggling with the realities of smaller screens. It surely says something about the challenges of the mobile ad market, though, that the only way to make it work is to erect a barrier, however small, between a consumer and an advertisement.