Google Responds to Click Fraud
Jill Trujillo | 20 March 2006 |
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Click fraud has received attention recently, as Google has agreed to pay up to $90-million to settle a lawsuit alleging that the search engine overcharged advertisers who paid for false sales referrals, or for “click fraud.”
In a recent blog posting, Google’s Business Product Manager for Trust & Safety, Shuman Ghosemajumder, addressed questions regarding this lawsuit, “click fraud,” and methods Google uses to filter out invalid clicks.
Included below are a few highlights from that posting, followed by a few of my thoughts on the subject:
Q: What is click fraud? I often hear the term “invalid clicks,” too. What’s the difference — or are they the same?
A: The term “fraud” implies deliberate deception. Our aim in fighting invalid clicks is broader and includes clicks that we suspect may have been deceptive or malicious, as well as clicks that we deem invalid for other reasons, such as accidental double clicking on an ad. The usage of the word “fraud” in this context has caused a great deal of confusion, as it’s practically impossible to “prove” that an impression or click was caused by deliberate deception. Our servers can accurately count clicks on ads, but we cannot know what the intent of a clicking user was when they made that click. When we identify a click as invalid, it simply means a click we won’t charge for, in order to deliver the best ROI to advertisers.
Q: Why not say more about the specific methods used to identify invalid clicks?
A: There are many things we do to detect invalid clicks, including looking at duplicate IP addresses, user session information, network information, geo-targeting, and browser information. These are all important signals for detecting invalid clicks.
The technology we use to detect invalid clicks is highly sophisticated and was developed by some of the world’s leading experts — PhDs in artificial intelligence, machine learning, and statistics. We’re reluctant to share more about our technology and methods, however, because doing so would make it easier for fraudsters to try to defeat our systems.
Q: How big a problem is invalid click activity?
A: We take it very seriously and have devoted significant resources and some of our best talent to this. By far, most of the invalid clicks we see are detected and discarded by our automatic filters even before they reach advertisers accounts. If an advertiser is monitoring click activity, these automatically filtered clicks may show up in an advertiser’s logs, but not in their bills. When invalid clicks are detected after an advertiser is charged, we reimburse for them. Because of our detection efforts, losses to advertisers from invalid clicks are very small.
Q: But don’t advertisers report invalid clicks to Google which weren’t detected in advance?
A: We do receive reports from advertisers and we look at them very closely. When we believe those clicks are invalid, we reimburse advertisers for them. Some invalid clicks do make it through our filters, but we believe the amount is very small.
Also, we often find that the clicks are legitimate, but from unexpected sources such as broader targets the advertiser has set up for their campaign. And, as I mentioned earlier, some of the invalid clicks advertisers see in logs are clicks we’ve already caught, discarded and not charged. Most investigations we conduct concerning invalid clicks are cleared up with the advertiser after explaining the source of the traffic increase or showing them that the clicks were never charged.
Q: Does Google have an incentive to allow some amount of fraud because it means more revenue?
A: Actually, it is the opposite of that. We have much more of an incentive to do a better job of handling invalid clicks than our competitors — and we believe we do. Fighting invalid clicks aggressively is in Google’s best interest and essential for us to maintain a viable business. In addition, we offer free tools to advertisers so they can monitor their return on investment — which is a helpful way to determine whether too many clicks coming through are not resulting in sales. Those free tools help advertisers manage to a bottom line value of their ads.
Q: Some people suggest that click fraud may account for as much as 30 percent of traffic — what do you say to that?
A: We believe the methodology behind that particular estimate is flawed — and that many who have cited the figure have done so irresponsibly by using it differently than it is characterized in the report.
Here’s a link (http://www.marketingexperiments.com/pdf/ClickFraud.pdf) to a .pdf version of the study where that figure originated. We encourage you to read the report and evaluate it yourself. Some things we think you will see that undercut those who use this estimate carelessly:
Even the report does not say that click fraud is 30% of all clicks. What it does say is that of three ad campaigns (only three ad campaigns were examined in this study), evaluated over a ten day period, one had questionable clicks of 8%, another 10% and a third 30%.
So, the 30% figure comes from analysis of a “single” ad campaign, not a study of many. This means that the figure of 30% that is used to characterize click fraud for the whole search and advertising industry comes from the analysis of “one” ad campaign looked at for ten days. Even in that campaign, it is not clear what methodology they used to determine which clicks are “bad” and it is possible that they marked legitimate clicks as “duplicate.”
Moreover, the study does not indicate whether the advertiser was actually charged for any of the clicks, only that the traffic analysis suggested that the clicks may have been invalid. As I mentioned above, it’s very possible that clicks recorded in an advertiser’s logs have already been caught by Google’s detection systems and not charged. (I should also note that when invalid clicks are detected and discarded before they are charged to an advertiser they are also not recorded as revenue.)
When considering the validity of this exaggerated 30% figure, you should also consider who is most aggressively using it: it is those who have the most to gain from hyping the problem. Those who are throwing around this figure are doing so as part of their marketing efforts to sell products they claim detect click fraud. The more they can convince others that click fraud is a problem, the more they hope to see increased sales. In other words, these companies have a huge financial incentive to make people believe invalid clicks are a larger problem than they really are.
My Thoughts:
- The $90-million stated in the lawsuit translates into less than 1 per cent of Google’s $11.2-billion in revenue during the past four years!
- Call me crazy, but I believe Ghosemajumder when he says that it is, in fact, in the best interest of Google to protect against click fraud - the AdWords program helps to pay the bills!
- Major search engines could do a better job of making more visible the methods used to protect against such “fraud;” yet without giving so much away that people who participate click fraud will get away with it.
- Going forward, the solution to click fraud may be an industry solution, with transparency in the shape of a third party or several third parties to help advertisers with assessments of their Pay Per Click accounts.
- When advertising by the use of a newspaper, radio, or television, it is nearly impossible to track how many potential customers are referred through these mediums. Pay Per Click advertising is a unique form of marketing in that an advertiser can track how many people respond to a specific ad; this makes ROI much easier to track.
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March 21st, 2006 at 8:42 am
Here’s a link to another good article about the impact of click fraud and an exert from that article:
http://www.marketingsherpa.com/sample.cfm?contentID=3204
”However, we wondered, what’s the real data on fraud? If Google’s settlement size is any indication, click fraud on a huge scale still has *not* been proven.
You see, the $90 million dollars are in to be paid in the form of credits available to a broad pool of the innumerable marketers who ran ads that might have been affected by fraud over a period of four years. Although the total sounds substantial, it only represents 8/10ths of 1% of Google’s ad revenue over the same four year period covered by the settlement. Further, an unknown portion of the settlement goes towards the plaintiff’s legal fees, so the take for marketers is hardly a windfall.”
March 24th, 2006 at 8:43 pm
I think click fraud becomes a bigger problem the more you bid on terms (another reason not to bid #1) because more money can be defrauded if you are bidding more per click. I think click-fraud pays a much higer toll on those who over-bid for their words, let their ego dictate, or don’t manage their accounts smartly.
Generally, I am pretty optimistic about the declining fortunes of click-fraudsters. Not only are the Googles and Yahoos fighting it, there are a lot of interesting developments in the world of algorithmically managed campaigns.
Now, I hope no one gets to upset by this, but… isn’t some amount of click-fraud priced into great deals often found in the PPC market? I would challenge anyone to spend $1000 direct marketing (even just the postage) and drive 2000 visitors to your website… even if 50% of them are qualified, it still can offer a staggering ROI.
June 4th, 2006 at 3:59 am
Please can you HELP I do not know what to do.I invested $1000 in an investment program Featured by Google.I followed the instructions on the website to the letter beleaving that as Google are promoting it it must be safe. I have been told by e-gold that my $1000 has been taken.This is the Google advert I invested in.http://www.egold-investments.biz/
June 6th, 2006 at 10:29 am
Geoffrey –
Google is not responsible, does not endorse, nor is Google tied to any of the ads that they feature in Adwords; Google merely provides the advertising space. Just as newspapers provide space for classified advertisements, the newspaper does not guarantee the quality of items sold in the advertisements.
If you feel like you have been scammed, try contacting Google to let them know that one of their advertisers is not legitimate; however, be prepared as they may give you the same answer that I did.
August 3rd, 2006 at 8:00 am
What a shame! It took Google 7 YEARS to finally admit click fraud. The reason why they are now talking about it is because they know that Megaglobe is on its way, look at this article:
Megaglobe Leads the Way Against Click Fraud
In the wake of pioneering efforts by new search engine Megaglobe to eliminate the problem of click fraud, rival search engines are making similar moves.
In January 2006, Megaglobe CEO, Naima Moore, publicly announced the company’s intention to implement tools to detect and eradicate click fraud. Since this time, some of the major search engines have begun to incorporate similar tools into their sponsored listings.
“We’re glad to see such trends arising because it creates a more cost effective environment for online advertisers, but we’re not convinced that enough is being done to correct this problem. With the upcoming launch of Megaglobe, advertisers will truly experience what return on investment means,” says Naima Moore.
Megaglobe’s technicians have been working on a click fraud detection tool since January 2006. Until recently, research by some other search engines into click fraud detection technology was not seriously considered.
A failure to make advertising figures available to sponsors is blamed for the click fraud epidemic, a problem which has mushroomed into a crisis in recent years with sophisticated criminal operations using proxy servers to mimic client’s clicks.
Defined as the fraudulent practice of clicking into another company’s online advertisement to generate false charges, click fraud is estimated by industry experts to account for up to 30% of all pay per click online advertising costs.
While some search engines have been slow to act against the problem, Megaglobe is leading the way against click fraud with its groundbreaking “zero click through” technology, which will be able to recognize false clicks.
According to Naima Moore, Megaglobe’s revolutionary anti click fraud technology not only guarantees the eradication of the problem, but is also inexpensive, thereby making its sponsor listings accessible to small investors.
“Our technology will identify the validity of each click and we will make this information available to advertisers,” said Naima. “Advertisers will then be able to see the number of clicks that they received from their account and only be charged for the legitimate clicks.”
“Megaglobe Ads (sponsor listings) will be available worldwide in 50 currencies and our advertisers will be able to choose their cost per click. With our minimum pay per click rate of 0.10 cents, we hope to open the door for small and medium businesses throughout the world,” said the Megaglobe CEO.
“Megaglobe will give a voice to those who have been ignored lately,” she said.
August 3rd, 2006 at 10:32 am
Everyone is all for less click fraud and revolutionary technology that would verify click validity. Bring it on Megaglobe!
August 6th, 2006 at 2:16 pm
Click Fraud is an interesting topic - one which both clicktracks and adwatcher will stop, one which will cost you an estimated 20% of your ad budget.
This is an interesting article with valuable information. I have used both clicktracks and adwatcher to prevent clickfraud. What we and many other webmasters are starting to do is invest our marketing dollars into clicktracks, adwatcher or other ad tracker software.
If you are looking for more information on adwatcher or clicktracks i recommend you take a look at: http://www.trackingsoftwarereviews.com they have full reviews on both clicktracks and adwatcher!
Mike Baker
August 7th, 2006 at 1:10 pm
From the description on the Clicktracks site, their Fraud Detection program analyses log files of a website to evaluate visitor navigation and trends, and then generates reports in spreadsheet format that the user can send to the pay per click vendor to dispute charges could possibly be click fraud. The Adwatcher website describes its technology to be much the same as Clicktracks, however Adwatcher generates an emailed report that users can forward on to search engines to request a refund.
I understand that Clicktracks and Adwatcher tracks visitor navigation and then find clicks that may not be the real thing, which is valuable service and brings click fraud to the attention of search engines. How are these programs able to “prevent” and “stop” click fraud?