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Click fraud costs Google $1bn

Discussion in 'Google' started by Cage Rattler, Feb 28, 2007.

  1. #1
    Google on Thursday made public more information about the extent of click fraud on its ad network to further clarify what it says are misperceptions about the issue.

    Loosely-defined, click fraud occurs when an internet ad is clicked upon for nefarious reasons, such as driving up a business competitor's ad costs.

    The practice takes advantage of how internet advertisers pay a small fee to Google and other internet ad providers each time one of their ads is clicked upon.

    Some click-fraud-fighting companies believe the practice is rampant, forces advertisers to pay an extra $16bn a year, and that up to half of all ad clicks are fraudulent.

    But according to Google, in the worst cases, on average 10% of all ad clicks are invalid. Typically, the amount is in the low-single-digit percentages. Google bases that figure on the average number of invalid clicks that it catches, and as a result, doesn't charge customers for.

    That amounts to about $1bn a year in payments Google could have collected, but chose not to, it said.

    The amount of click fraud Google doesn't catch, but is brought to its attention by advertisers, represents less than 0.02% of the times an ad's clicked upon, according to Google.

    The information Google released on Thursday does not present a complete picture. What's missing is the number of fraudulent clicks that Google doesn't catch. But what Google released on Thursday is the most complete picture to date the company has offered.

    Google also said on Thursday it will introduce a number of new click-fraud-fighting measures in coming weeks and months. They include letting advertisers notify Google about specific internet addresses from where they suspect click-fraud attacks are emanating.

    Other new click-fraud initiatives include providing advertisers with a resource centre to address questions and for Google to make available a standard way for advertisers and others to report click fraud.
     
    Cage Rattler, Feb 28, 2007 IP
  2. 2003m2003

    2003m2003 Peon

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    #2
    Interesting, thanks for information. Does it say how many publisher ban per day/month?
     
    2003m2003, Mar 1, 2007 IP
  3. aluke

    aluke Active Member

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    #3
    Now that would be interesting to know!
     
    aluke, Mar 1, 2007 IP
  4. Imran

    Imran Notable Member

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    #4
    interesting, thanks for sharing this news..
     
    Imran, Mar 1, 2007 IP
  5. frisby

    frisby Active Member

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    #5
    Can we get also original link of news?
     
    frisby, Mar 1, 2007 IP
  6. enQuira

    enQuira Peon

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    #6
    Google is very careful when it talks about its publishers network. I have seen this in the animated tutorials in their adwords learning center. They don't mention MFAs when they talk about their content network, they cite the NY times, Aol, ...
    so last thing they will disclose is their banned publishers.
     
    enQuira, Mar 1, 2007 IP
  7. 8everything

    8everything Peon

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    #7
    A lot of them (theres a few that post here ;)).

    Thanks for the article. Interesting read.. I can't believe click fraud came out to cost them $1 billion, that's a lot.. I wonder if the number will just keep increasing in the futur.. google is definitely going to come up with tougher TOS...
     
    8everything, Mar 1, 2007 IP
  8. Anita

    Anita Peon

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    #8
    It didn't really cost them $1 Billion ... that makes it sound like they would have made more money if the fraud didn't happen. Their truthfulness in recognizing the fraud and returning the money cost them the $1 Billion, not the fraud itself.

    Anita ;)
     
    Anita, Mar 1, 2007 IP
  9. MattKNC

    MattKNC Peon

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    #9
    I have a customer who saw $1500 charged to his account in 20 minutes time a few years back. At that time Google didn't do anything about it, but today they seem a bit more eager (read: lawsuits) to step up their monitoring of the situation.

    Google lost a good customer over this issue; likely thousands more kissed the company good-bye too.
     
    MattKNC, Mar 1, 2007 IP
  10. john_nyc

    john_nyc Active Member

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    #10
    based on that you wouldn't think that soooo many people would get banned for it!
     
    john_nyc, Mar 1, 2007 IP
  11. Briant

    Briant Peon

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    #11
    The say that about 10% of clicks are not charged to the advertiser due to fraud. If an advertiser spends $1,000. He spends $1,000. If it took a total of 1000 clicks or 1,100 (i.e. 100 disregarded) doesn't necessary matter. Of course the advertiser may have put more money into Google sooner if their clicks exhausted sooner, but this is not a sure thing. My point is this may well have cost Google must less in lost revenue than this claims. Of course if the true click fraud rate is much higher (or if they still paid the publisher (not likely), all bets are off.
     
    Briant, Mar 1, 2007 IP
  12. Freewebspace

    Freewebspace Notable Member

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    #12
    But why Google is not worrying about $1 billion?

    It think they should improve Google adsense technical side more so only they can prevent frauds only to a certain account!
     
    Freewebspace, Mar 1, 2007 IP
  13. monsterclips

    monsterclips Banned

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    #13
    It doesnt cost google anything its the advertisers using adwords
    thats gets robed out of their money. When someone gets banned then the money gets paid back to the advertiser.
     
    monsterclips, Mar 1, 2007 IP
  14. oseymour

    oseymour Well-Known Member

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    #14
    who says there are not worried about it. they are losing advertisers every day. why do you think they are so quick to ban publishers.
     
    oseymour, Mar 1, 2007 IP
  15. soniqhost.com

    soniqhost.com Well-Known Member

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    #15
    There is more to the issue then just click fraud, google and yahoo and publishers can't even come to terms on what is considered a click. For example if some clicks on the ad by mistake is it still considered a click.
     
    soniqhost.com, Mar 1, 2007 IP
  16. tlainevool

    tlainevool Guest

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    #16
    I think the key point to remember is this paragraph from you original post:

    Lot's of people are reporting this story as "Google says click fraud is 0.02%". This simply isn't true. Google simply reported what number of click they count as invalid. This says nothing about actual click fraud levels.
     
    tlainevool, Mar 1, 2007 IP
  17. w3bmaster

    w3bmaster Notable Member

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    #17
    They have from where to lose money but it's to bad that in this "war" there are colateral victims ... (honest publishers geting ban)
     
    w3bmaster, Mar 1, 2007 IP
  18. mNote

    mNote Peon

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    #18
    I think google makes so much more that they don't care about 1 billion...
     
    mNote, Mar 1, 2007 IP
  19. Reprobate

    Reprobate Guest

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    #19
    So it's not a loss, it's not imbibing an ill gotten gain.

    You can't lose something you're never meant to have.
     
    Reprobate, Mar 1, 2007 IP