August 8, 2006 12:35 PM PDT

Google calls click fraud estimates overblown

SAN JOSE, Calif.--Google is fighting back against what it says are exaggerations in industry estimates of click fraud in its bread-and-butter pay-per-click advertising system.

In a report released Tuesday, the search giant disputes claims made by third-party companies that sell services designed to combat fraudulent clicks--clicks that aren't from legitimate Web surfers seeking information from a given ad. Those companies have estimated that the proportion of advertisers paying for fraudulent clicks is as high as 35 percent.

But in a report titled "How Fictitious Clicks Occur in Third-Party Click Fraud Audit Reports," Google says the figures are often inflated because the companies are counting clicks that were never made on Google AdWords advertisements. (Google's 17-page report can be accessed on the company's Inside AdWords Blog.)

For example, a single AdWords click may appear as five clicks in some reports, leading to the reporting of five fraudulent clicks, according to Shuman Ghosemajumder, business product manager for trust and safety at Google. Ghosemajumder referenced the Google report during a panel on click fraud at the Search Engine Strategies conference here.

Counting of fictitious clicks can happen when a Web surfer browses more deeply into an advertiser's site and then hits the back button, presses the browser reload button on the landing page or opens a new browser window, causing a reload of the landing page, Ghosemajumder said.

In addition, Google said it found evidence that the third-party reports were inaccurately "counting one advertiser's traffic in another advertiser's report, even if the advertisers span different ad networks," from, say, Google and Yahoo.

The Google report also criticized the third-party reports for using small sample sizes in their analysis, which Ghosemajumder said prohibits advertisers from being able to cross-check the data.

Part of the problem with determining an accurate click fraud rate is that auditors need to see both the traffic conversion data at the Web site and at the search engine company, which Google doesn't provide. Not having both sets of data "makes it difficult for us to marry it all together," said Tom Cuthbert, chief executive of Click Forensics, one of the auditing companies mentioned in the Google report.

"I will stand behind our methodology," Cuthbert said in response to his company's data being criticized in the Google report. "You are Goliath and we are just David down here trying to do what we can...You and I are never going to agree on the methodology."

Google's Ghosemajumder replied that the report does not dispute the methodologies used but concludes that the third-party reports are overcounting clicks, which results in unrealistic estimates of click fraud.

Like the representatives from the other anti-click fraud companies, Jessie Stricchiola, founder of Alchemist Media, said she had not seen Google's report. She pointed out that it took several class-action lawsuits to spur cooperation from Google. "The gloves appear to be off at this point," she said, referring to the contentiousness of the session.

A judge has given final approval to a $90 million settlement of a click fraud lawsuit filed against Google, and a settlement between Yahoo and advertisers is pending.

Stricchiola asked Google what percentage of its AdWords customers it gets data from on advertiser conversion data, a measurement of how many people who click on an ad take a particular action, such as make a purchase. Ghosemajumder said Google does not publicize that information but provides free conversion tracking tools that enable customers to provide that data to Google.

Ghosemajumder and John Slade, senior director of global product management at Yahoo Search Marketing, said the search giants would commit to abiding by third-party independent audits after standards for defining click fraud are enacted.

Google, Yahoo and others announced last week that they are working with the Interactive Advertising Bureau and the Media Rating Council on standards for defining and measuring click fraud.

Abhilash Patel, director of Internet Operations at substance abuse treatment center Passages in Malibu, Calif., complained that he sees a "significant amount" of traffic coming to his site from "garbage Web sites" that are created merely to drive traffic to ads or to accomplish other fraudulent purposes, using a practice called "arbitrage."

Patel estimated that 15 percent of the clicks on his organization's ads are fraudulent.

The Google and Yahoo representatives said they kick Web sites off their ad networks if they violate the ethics policies.

Lori Weiman, director of KeywordMax, said that of a small group of customers, her firm found estimates of click fraud in the 8 percent to 10 percent range, but rates as high as 28 percent existed on the extreme end. KeywordMax data was not included in the Google report.

See more CNET content tagged:
click fraud, advertiser, Google AdWords, pay-per-click advertising, Google Inc.

5 comments

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The same greedy crooks who sold their souls to the communist Chinese
These are the same greedy crooks who sold their souls to the communist Chinese. The same ones who allow links to child porn. The same ones who engage in copyright violations. You have to remember their moto is "Do evil."
Posted by lingsun (482 comments )
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Byzantine problem
The search engines/ad networks don't trust the third party/advertiser data, and vice versa. Read the Wikipedia entry on Byzantine failure in computers, and draw your own conclusions. IMO, it's unfortunate that these considerations weren't taken into account before PPC was launched as a service.
Posted by CPCcurmudgeon (51 comments )
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great google..now can someone please...
relay the same information that organizations release about piracy?

those inflated numbers overstate a problem that's really not a problem...unless of course you own the media being duplicated and sold

but please...assuming that every copy in circulation is a missed sale is as bad as the click fraud overestimates.
Posted by jachamp (84 comments )
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Click fraud - mitigate the risk
For a fraud to take place then someone has to benefit. I may have it wrong but there seem to be only 2 possible frauds:
- an AdSense publisher who clicks ads on his page to increase his income
- a competitor who clicks on an AdWord in order to create a disbenefit for the AdWord owner

The simple way for companies to avoid the first fraud completely is to prevent their AdWords appearing on Google's content network. If your ad doesn't appear on a publisher's content page then irrespective of the amount of fraud in this area, there is no risk to the AdWord owner

The second type of fraud is more difficult to eradicate but AdWords owners need to consider what the real-world risks are of their competitors undertaking this kind of action. For any reputable business, the benefits and flexibilty of an AdWord campaign will almost certainly outweigh the risks of this type of fraud.
Posted by diffenthal (1 comment )
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Click Fraud
Any comment on this?

Pay Per Click is a big loser for many large ticket items like we sell. We sell medical mobility products. Most of the people visiting our site are using it for a catalog never intending to buy. I think there is a lot of waste and fraud with pay per click for many products and services on the web effecting a large percentage of companies. Google and Yahoo are aware of this and they have the data and have not released this data to the customers. Do you think google/Yahoo is going to admit that a large percentage of poeple doing PPC are wasting their time and money? NO WAY! I think people are figuring this out now in a big way. That?s why Pay Per Action is being offered by google. Google/Yahoo know the secret is getting out now. If people knew what google and yahoo know they would not even try PPC for many products people are trying to sell on the web. The word is getting out on this and will soon shock the PPC biz and the big search engines. Pay Per Sale will save google and yahoo and others will follow.

It will take a while but the pain for the publishers and google/yahoo will be worth it.

The big secret is now being exposed and will save many of the advertisers and google/Yahoo.

Thank God!
Posted by hlawton55 (3 comments )
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