Google Sued for Click Fraud, 38% of Revenue Fraudulent?

15 comments
Source Title:
Reuters
Google sued over 'click fraud' in Web ads
Story Text:

According to Reuters, Google are being sued for click fraud again. This time, it's by Click Defense who claim that up to 38% of clicks may be fraudulent

Scott Boyenger, chief executive of Colorado-based Click Defense, said in an e-mail that his company's tracking system has detected click fraud rates of as high as 38 percent. The company sells software to prevent click fraud.

Clearly Click Defense have something to gain here, publicity and awareness for their products as Nathan points out

Considering Click Defense makes more money the more clients it convinces need protection against click fraud, it is natural they would exagerate the issue, and stand to gain from the publicity surrounding this lawsuit. What I don’t understand is why a company that profits from fighting click fraud would sue a company for not making them unnecessary. It seems only obvious that this suit is meant to drum up more clients for Click Defense.

Regardless of the motivation, and the accuracy of the figures, this does serve to bring Click Fraud yet again, bang into the public spotlight. As FuckedGoogle says

Can someone out there name another industry that has fraud rates anywhere near this level? Maybe loansharking? Drug dealing? I'm drawing a blank here..

tick tock, tick tock...

Comments

There was widespread concern

There was open widespread concern about clickfraud at SES London among the attending businesses - and the Google and Yahoo! position so far seems pivoted upon "trust", with little impetus to discuss the issue, other than try and issue blanket assurances.

As there's an obvious conflict of interest on the PPC SE side - after all, they benefit after all on fraudulent clicks - the main concern from the businesses seems to be lack of information on how it's being tackled and dealt with.

I think consumer pressure is going to force Google and Yahoo! especially to be a lot more open about their clickfraud process and how to combat it *together* - despite protestations that doing so will help alert fraudsters of methods.

Google and Yahoo! are almost certainly investigating the issues of liability with regards to how open they can be about the issue before they actually move forward in this way, but it's something they are almost certainly going to have to be much more open about in future. As PPC grows, so will the pressure for greater transparency, IMO.

2c.

I seem to remember a rep

I seem to remember a rep saying something to this effect - We are working very hard at detecting and stopping click fraud, and many times you won't even see the clicks appear as charges on your account. We don't want to discuss the details of what we do, as this will tip off the people involved in click fraud to what we are monitoring.

paraphrased: "We don't want

paraphrased: "We don't want to discuss the details of what we do, as this will tip off the people involved in click fraud to what we are monitoring."

Oh good, they don't want to discuss it, and I don't want to trust them, because they (like Click Defense) have something to gain from allowing it to go on. It is only their marketshare that keeps me coming back to them, and thats only diminishing.

38% is not unrealistic

As I said on my blog and have talked about here at TW the "industry average" is 20%. That's being conservative. I contend the rate is higher being closer to 30% or 35% across the board, regardless of engine. This rate can increase much more in highly competitive verticals.

As for not discussing the issue I think the engines have a lot to lose. It is a problem that will be coming to the forefront more and more and as advertisers become increasingly aware of the click fraud problem. You will see more advertisers with their own click fraud detection suing the engines. I'm suprised however that Google was not on top of this and didn't immediately issue a refund in this case. That would be their M.O. A large spender (if Click Defense's client had a high ad spend) is usually catered to in much more grand fashion. It's the smaller advertisers that suffer from lack of reponse on this issue for the most part.

I'll continue to be outspoken on this front as long as I can, as an industry insider, to help force change by the engines. This is a problem that must be solved. Unfortunately for the time being everything is status quo and the "hear no evil, see no evil" approach seems to be the way the engines want to operate. I don't agree with that. If you're going to establish trust with your advertisers you have to give them a verifiable reason to believe in you. There are ways to virtually eliminate most click fraud, at least 99% of it.

Ignorance is bliss, especially when there is nearly a billion dollars a year in revenue on the line that would be cut by getting rid of the fraudulent traffic. For all their engineering and technology prowess I find it hard to believe they just can't seem to solve this issue. That's one of those facts that makes me go..... Hmmmmm.

The Bigger Story

I think the bigger story here is that we are going to see click fraud issues become more mainstream. It's always been a dirty secret in the industry, but now your small business owners and novice webmasters who use Adwords will get a little skeptical.

I've felt click fraud has been poorly handled by all SEs over the years. Reminds me of the lifeguard on the beach who just checks out the pretty girls all day. He's there in a way, but not really doing his job properly. The search engines know they can get away with it on most advertisers, and have little to no motivation to change.

Even at a conservative estimate of 20%, it is unacceptable. Imagine buying a magazine ad and having it not show up in 20% of the newspapers. Buying a direct mail piece and having the company not mail out 20% of the items.

I'm tired of the second nature click fraud has received over the years. Although this lawsuit has many questions, including the true motive, it is good to see it hit some mainstream media outlets. Perhaps this will force Google and others to put some effort into click fraud.

ho hum...

Imagine buying a magazine ad and having it not show up in 20% of the newspapers.

  • Many magazines nearly give away the subscriptions to get larger subscriber numbers.
  • Most newspapers don't tell you how many papers they shred each day.
  • The click fraud is somewhat worked into the market price.
  • People clicking your ads on Google only makes your advertisements more relevant, which lowers your cost per click and raises your competitors ad costs as well.

I think the 20% number is high, and you just about have to be smoking something to get 38%.

People clicking your ads on

Quote:
People clicking your ads on Google only makes your advertisements more relevant, which lowers your cost per click and raises your competitors ad costs as well.

True - but if they do it enough to burn your budget before the main ordering window for your market, that doesn't realy help.

Quote:
you just about have to be smoking something to get 38%.

I have seen it higher than this - it just needs someone "in the know" to decide to take you down.

Google's response when we went through the complaint procedure was pathetic.
My clients response was "If they want me to jump through this many hoops every time I see click fraud, they can stuff it - I'll spend my budget elsewhere"

"If they want me to jump

"If they want me to jump through this many hoops every time I see click fraud, they can stuff it - I'll spend my budget elsewhere"

If you have been dried out of the market due to click fraud, then maybe you can spend some of that cash making sure the person defrauding you pays a premium for their sketchiness :)

As I recall from Orlando in

As I recall from Orlando in 2004 an X Over person put the number at 15%.

Print Fraud

Funny you should mention that Aaron... that's what my blog was about. Arrests in the newspaper world for circulation fraud.

that's what my blog was

that's what my blog was about. Arrests in the newspaper world for circulation fraud.

a whole blog on arrests in the newspaper world for circulation fraud. whowouldathunk?

I think you meant this blog post? ;)

Hey you go to bed at 6pm so

Hey you go to bed at 6pm so this is late evening for you... I am just up and need coffee!!!

...

Quote:
If you have been dried out of the market due to click fraud, then maybe you can spend some of that cash making sure the person defrauding you pays a premium for their sketchiness :)

If it had been my own site, there would have been a rumble.

It was a client of mine. He was spending around $12000 per month. We had click fraud tracking in place (KeywordMax and ClickSentinel). We had enough ammo to fight the case.

Client just couldn't be bothered. His view was "F**k 'em - I can spend my money better elsewhere".

It wasn't even subtle click fraud - he'd make £5k sales a day for a few days and then 'whammo' - a day would get zero sales with a massive amount of clicks early in the day. This happened often, but never on weekends.

Mostly it was through AOL proxies. Google's response "well, there is quite a lot of AOL traffic, and a bit of click fraud - but we haven't charged you for the click fraud" - which was blatantly not true.

Client just didn't want to fight them, said he could use the time/money better.

Can you say

Attorney General. Class action stuff won't have a big effect but when a few AGs get in the game it will get rough.

Spitzer would have been good

Elliot Spitzer, the NY AG would have jumped on this one heftily I reckon but he is tied up with running for Governor in 2006.

One way to get them involved is when you see political ads click like crazy:-) If you are screwing them they will take action!

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.