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Google Agrees to Pay $90mln on Click Fraud Lawsuit
Hitokiri writes "Google has agreed to pay up to $90 million to settle a class action lawsuit 'Lane's Gifts v. Google'. The settlement stems from a lawsuit filed by Lane's Gifts earlier this year in an Arkansas state court and is designed to settle all outstanding claims against Google for fraud committed using its pay-per-click ad system back to 2002Google has made a statement on their blog."
The January/2006 Wired had an article titled "How Click Fraud Could Swallow the Internet" that presented a case study of a charter-jet service victimized by this ... turns out it was their competition doing
it to use up their on-line marketing budget.
Google Girl basically stonewalled 'em.
Hey submitter and editors -- Google isn't PAYING anything. They are giving credits to buy more advertising.
Am I the only one who recognizes the difference between "getting paid $1" and "getting credit for $1 - at that company"?
Reasons why I'm concerned about Google's business:
Cue Google-fanatic flamewar.
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I wonder why internet advertising does not take a page from the radio advertising playbook. Daily, on the radio, I hear ads that say "Mention this ad and save an additional 12%!" This system allows the advertising folks to learn quickly whether their ad is reaching its audience. The customers come in and tell you so.
Is there any reason why internet ads do not do this?
Trying to use sarcasm in text-based forums does not work.
Honestly, RTFM poster. Google says it will give advertisers who believe they are victims of click fraud up to 90 mil in advertising credits.
-- Checking emails and kicking cheats `till the day I die.
what is "mln" anyway? i thought adding "m" to the ending of a string of numbers after a dollar sign was the way to abbreviate "million". do people just feel the need to make up new shit, or did they not know about the simple "m"?
Telltale Games: Bone, Sam and Max
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I'm using adsense. This can't be good for my "shareholder value". Somebody, that means me, will have to pay for this. Anyone want to buy me dinner all next month?
9/11: Never forget it was a false-flag operation
and is there an RFC which defines it?
Slashdot's got several ad pricing plans. They're linked from the "advertising" link at the bottom of every single slashdot page. Look for yourself.
As you may or, as your post indicates, may not be aware is that it's ALL credits. The NOT Federal (absolutely no) Reserve prints new money for 2.4cent on the dollar. Check it out for yourself!
1.) The Federal Reserve Central Bank has the Federal Reserve Notes printed by the US Treasury for pennies on the dollar, with not a cent of reserve or investment!
2.) Then it lends this 'money' to the Federal Regional Banks who multiply this deceptively created credit seven times over. For every billion dollars it borrows from the Federal Reserve Central Bank, Regional Banks lend seven billion dollars! (That is why it is called 'fractional' reserve banking.)
3.) The losers are the people and businesses who borrow this created credit line and are forced to pay it back with interest that is collateralized by real assets (their homes, cars, land, factories, etc.).
4.) Another deception of this system is that the controllers of the money supply (The FED) have virtual command of the economy. For the economy just to keep going, The FED needs to create more new credit each year than is due in interest payments. * A Federal Reserve $1 note buys goods only because people believe it has value. If people realized that there was no true value behind these Federal Reserve Notes, they would be worthless!" [CS pg 36-37]
I get your point - they aren't "paying" as in giving $ credits on a bank account but giving $ credits on a Google account. IT'S ALL WORTHLESS CREDITS! Seriously. Check it out for yourself.
9/11: Never forget it was a false-flag operation
This story is complete bullshit, It doesn't even begin to represent the truth. For those that didn't RTFA, let me paraphrase:
Google usually allows advertisers 60 days to claim invalid clicks and recieve a refund for those clicks. Google has made a deal wherein they will allow advertisers to make invalid click claims going all the way back to 2002, and offer advertising credits for all of these clicks. Google does not yet know how many invalid clicks will be reported, but under the terms of the agreement the maximum credit given will come to a total of no more than $90 million.
So in other words, this posting is either FUD or just bullshit, and Google isn't paying anything, but rather offering advertising credits.
Big ones, small ones, some as big as yer 'ead!
Give 'em a twist, a flick o' the wrist...
who else read that as lame gifts?
Since when have we been using mln to denote million?
What's wrong with calling 90 Megabucks $90M ?
Unless people are worried about conflicting with powers of two, but in any case that should be denoted: $90Mi, or 90 Mibibucks.
Or does mln denote "Millions of dollars worth of in-store advertising credit", which another poster has pointed out is what the plaintiff is receiving.
"Nine times out of ten, starting a fire is not the best way to solve the problem." - my wife
How do I know if I was a victim of click fraud? How does google validate my claim? How do I make a claim?
Does this mean any 2002 claims? Or more recent claims as well outside the 60 day window?
And when did they implement a click fraud complaint mechanism? I haven't used adwords in a while, but when I did I don't remember any way to complain.
If Google is paying out up to $90m in advertising credits, that won't make Google show any more ads. I understand Google uses some kind of auction system to price ads. If the people getting these credits will have more of their ads shown, others will have less of their ads shown. Will the auction system reduce prices for everyone else due to this, or will clickthroughs simply go down slightly so that, in tune with the laws of economics, people will notice their clickthrough rates decreasing and a few of them will stop advertising with Google?
Even better:
US citizens then get to pay Federal taxes, every year, after working hard, and being paid in Federal Reserve Notes, which cost nothing to produce. Tell me that a government that prints money at will needs to tax the Citizens it ostensibly serves on their labor?
It's a GREAT scam - I wish I'd thought it up!
Money for nothing... backed by the threat of prosecution, with the attendant implied threat of violence: They CAN hurt you, you know, and nobody would say anything - we're all too scared now.
You know - I've never actually been threatened by a member of any terrorist organization, as defined by the US Federal Government... but, I have to tell you this: I am honestly terrified by what the US Federal Government can do to me, should I actually stand up for my rights as defined by the Constitution.
This, of course, is why I'm posting AC.
Click fraud runs about 40% when noobs manage a Google Adwords account. Much of that comes from Adsense via the Google content network, because it's a way for webmasters to line their pockets at the advertisers' expense. Competitor click fraud happens too.
The ways to control click fraud are:
1. Set low bids on the content network. Click fraudsters pick on the richest bids.
2. Exclude sites from the content network that show below average conversion rates.
3. Use your own tracking URLs to double check Google's conversion figures.
4. Don't show your ads in cheap offshore locales. Some sleezebags have set up click fraud offices in these places where people are paid to surf and click on your ads.
Discount your bids to account for the cost of click fraud. As long as you are happy with your net cost per conversion, click fraud is just a cost of doing business. Your bids are lower, Google earns less. If Google wants to earn more, they should the eliminate fraud.
This is great news, I have been tracking all of our Google Ad Click-Throughs for months now.
Personaly i have seen hundreds if not thousands of tracking erros
For example a user clicked on our Ad 10 times in less then 5 seconds, and then another user clicked on it 5 times in less then 1 second.
Thank the lord for timestamps !
- MOSKIE
Basically it's an economics problem that the brilliant people at Google have realized. They could win the suit, but only after spending WAY too much on lawyer fees. Of course both sides would agree to a settlement by the defendant (more money, less work for the lawyers on both sides). This is also an opportunity that can't be passed by a defendant who realizes that their case might not have enough to overcome the amount of money Google can throw at a legal defense (which they could, but again, it's an issue of economics). This problem is clear in Google's blog on the subject:
For the finance folks out there wondering how we'll account for this, we can say that the attorneys' fees (which will be determined by the judge) will be charged as an expense, most likely in the first quarter, once the amount is determined. The credits will be recorded as a reduction to revenue in periods in which they are redeemed.
Anyone who is acting like Google isn't paying enough doesn't understand either economics or the american legal system (notice I didn't say justice system). They may understand the difference between right and wrong (and I don't think Google is right), but they fail to understand "the way things work in the real world."
7h3$3 4r3n'7 7h3 Ðr01Ð$ ¥0 4r3 £00|{1n9 f0r. M0v3 4£0n9. --OB1
Yeah, TV and IE both suck life, so I avoid both. In the IE case, I also avoid the sub par software under IE, aka Windows, which is just as pushy, greedy and stupid as daytime TV. Some of the worst sites are things that combine both, like MSNBC.
For all that, I will actually click on Google ads. They are unobtrusive, topical and good for the most part. It's amazing how far a little consideration and respect goes.
Friends don't help friends install M$ junk.
All this is costing Google are the legal fees.
...it's about time.
Math is math. Regular expression is regular expression. The tools are there. The future is now.
"This, of course, is why I'm posting AC."
That, and the tin foil gloves make it hard to type a 200 character password without error.
booga booga
Am I the only who one who thinks 'mebibyte' sounds really, really stupid?
Hamsters are at least as feathery as penguins. HamLix
Title says "Pay X", description says, "Pay Up To X", will the actual article say "Pay some amount which may be X".
What do you recommend as a solution then?
Gold standard? Gold is just as worthless. Yes, it has industrial uses.. but it's value is not set by industrial use. It's set by scarcity, and percieved value, just like dollars, or yen, or most other major currencies.;
If you feel your dollars are worthless, please, send them my way.
they have big deep pockets anyways.
According to the Wired article, Karaoke Star was accusing Ace Karaoke of "illegal clicking". What constitutes illegal clicking? Is it just clicking without the intent to buy? In which case an accidental click would be illegal. Or is there some sort of threshold... 5 clicks in a minute? What I'm trying to say is that this should not be a legal problem, it is clearly a problem with the system. Ace Karaoke, though unethically, was taking advantage of what is obviously a system with a major flaw. It should be up to the businesses paying for the service to hold companies like Google to delivering a product much safer from fraud. You shouldn't need to know all the "tips and tricks" to using Adsense.
A simple solution would be to have an anti-bot confirmation pop up in order to approve the click through (much like the one that I must fill out in order to submit this), though Google would never do something like that. Their business would take a major dive.
I'm waiting for the day when someone gets pissed off with their phone service from a company like Verizon and writes a little virus taking advantage of the pay-per-click system.
Okay that's RUBBISH. The strength of the economy is nothing to do with how much money is out there, but how much it's moving around.
Cash is an abstraction of value. It's value comes from the fact that it's mutually recognised as having a value. That's where it's value comes from, a common-agreement. You find *anything* that people are just as willing to exchange for services/resources as money. Gold's "worthless" unless you can find someone who's willing to exchange it for something you want (eg, sex). A pig's useless if you're living with vegie hippies (not that they have money anyway).
Money means not having to look long and hard for someone who's willing to trade with you. This means you have time for other things. Money is an abstract representation of time ("time is money" is true). There is no way, by the furthest stretch of imagination, that you can say time is worthless. It's the most valuable thing you've got.
The revolution will not be televised... but it will have a page on Wikipedia
Overture claims to provide "Click Protection" for their pay-per-click advertising service. In reality they fail to prevent the most basic and easiest to detect non-authentic clicks - that is competitors clicking on competitors. They do not even filter out a customer clicking on their own links from within the Overture manager. Nor do they provide a method for an advertiser to test their own ad rendered URL's - a necessary function as a means to test the validity of an entered URL. Since filtering out such clicks would be simple and straight forward using established cookies or session id's - I can only speculate the reasons for not patching this obvious flaw and question the "sophistication of Overtures "Click Protection".
you do realize, I hope, that the Fed can't just print itself as much money as it wants, because that would lead to massive inflation and the collapse of the US economy. The concept of money only works when used as a representation of labor/production.
Slashdot needs a "-1, Wrong" moderation option.
The Urban Hippie
...the advertisers have decided to put the whole $90M into a single shot ABSOLUTELY HUGE advert... it's pot luck who will get to see it, but let's hope they were intending to make a purchase!
The revolution will not be televised... but it will have a page on Wikipedia
One 100%-for-certain technique I employ is by being the fraudulent clicker myself, then it's just a case of 'fessing up to it.
The revolution will not be televised... but it will have a page on Wikipedia
"people will notice their clickthrough rates decreasing and a few of them will stop advertising with Google?"
No, you pay per-click, if your clicks go down, then the amount that you will have spent with google will by extension go down. You'd only want to stop advertising with google if your clicks weren't translating to enough sales.
The revolution will not be televised... but it will have a page on Wikipedia
Google isn't the one being accused of performing the click fraud, just being told they have to refund where it occured. Just like if someone uses your credit card, you can perform a chargeback on the company who ended up with your money. That's not to say it was them who performed the fraud, it was just them who ended up with the money from it.
The revolution will not be televised... but it will have a page on Wikipedia
Clicking with the only intention being costing the advertiser money is what you'd call illegal clicks. For example:
"I get paid x per click of this ad, so I'm going to click it lots to get money from the advertiser"
or
"My competitor pays x per click of this ad, so I'm gonna click it lots to eat away at their marketting budget"
or even
"I'm going to cost [google] this customer, by clicking on this advert lots, but never buying anything. The advertising company will see their [google] clicks aren't translating to sales, and will stop advertising there".
The revolution will not be televised... but it will have a page on Wikipedia
"Many businesses are still in a 'honeymoon' with Google and aren't yet seriously computing the performance of their clicks (how many clicks turn into sales)."
I'll try not to be Mr. Obvious here, but consider this: when companies buy time on TV, they have no idea how effective those ads are. What I mean is, they can see the ratings for the TV show and you can guess how many people saw those ads based on the ratings, but that is no guarantee anybody actually watched the commercial, and even if they did, you have no idea if people associate your product with that commercial, and even if you did, you have no idea how that translates into a sale.
But yet despite all those handicaps, companies still purchase TV, radio, and print ads.
For online advertising, google ads or anything like that... at least you can measure some sort of direct impact... the month before, I had X hits, this month I had Y clicks The month before I had $X in sales, this month I had $Y in sales. In both case, I can measure those numbers well enough to draw a conclusion pretty quickly about the effectiveness of the ad.
The comparison is not different than direct mail, email, or other ads... does my revenue increase more than the cost of the advertising. If it does, then it's good for me. If it doesn't, it's not good for me, stop advertising.
If you don't know the impact in 3 months, then shame on you for not paying attention. And that's really my point. Google has been around long enough for companies to draw a conclusion as to the effectiveness of those ads. Either they're effective, or companies are not willing to admit that Google isn't effective.
You were mistaken. Which is odd, since memory shouldn't be a problem for you
Have the lost their case ?
Chris ,
Php Programmers.
The current way the US Legal system handles class action lawsuits is incredibly flawed. Basically, for a scant 90 million bucks, Google is buying the right to continue to commit criminal fraud without fear of financial accountability.
If I were a GOOG shareholder, I'd say that sounded like a pretty damn good deal. I could care less if someone went to jail over it so long as the company didn't have to pay financially.
The idea is that intent == fraud. If I accidentally click...that's par for the course for click advertising. No one guaranteed every click would be a sale. However, writing a script to simulate clicks in order to screw your competitors, that's fraud. That's beyond ethics, I believe that might actually be illegal.
A simple solution would be to have an anti-bot confirmation pop up in order to approve the click through (much like the one that I must fill out in order to submit this), though Google would never do something like that. Their business would take a major dive.
I think the idea is rather to use the power of Google to determine from their behavior which click patterns are likely to be fraudulent.
The January/2006 Wired had an article titled "How Click Fraud Could Swallow the Internet"
Just a point of interest here, the only thing click fraud is going to swallow is google. The rest of the internet will get by just fine. Honestly the only types of online advertising I would pay for would be fixed fee (and I'd only try that for a short period to see results) or affiliate advertising, where clicks are attributed to referrers and tracked directly to sales. When sales are made, the referrer gets a commission.
Honestly google should have their heads examined, basing their whole business model on pay per click. This settlement will be the first of many, mark my words.
What he can't kill, he has sex on. Trent.
n mln = (10^-3) * ln(n). It's short for 'milli-log-natural'.
Real Daleks don't climb stairs - they level the building.
Get thousands of anonymous proxies and bomb the hell out of your competition.
Must suck for Google!
I was in the adsense program for over two years and all of a sudden I get a message from Google saying our adsense account had received invalid clicks and was closed. What really pissed me off was that my wife and I had just started working on two new sites that were a part of a high traffic network. As such our adsense clicks went up a great deal with in a month and shortly after this they canceled our account. I know that I'm not the only one this has happened to. I personally know several people that have had there accounts closed by Google saying they have received invalid clicks. There's no way to appeal.
it's 50% to my knowlege, i.e., a split between the folks who placed the ad and google
It will be interesting to see how that part of it filters out as the market is starting to show more scrutiny towards Google now that it's "rampant growth honeymoon" seems to be coming to an end.
I'm a fiscal conservative, it's a pity we don't have a political party anymore
I am a GOOG stockholder and I randomly click on ads to increase Google's revenue so the stock goes up.
or
I am a Firefox fan and I randomly enter queries in the search box and then click on ads to support my favortive non-profit. (see the Mozilla $72M rumor)
What really sucks about these two scenarios is that they target Google's core search at www.google.com which used to be considered a safe haven for AdWords customers. Disabling AdSense and partner sites like AOL won't help since the whole system is now tainted.
The only way IMO that Google can pull itself out of this downward spiral is by introducing these new clicking schemes:
* pay per call
and
* pay per purchase
which they are rumored to be working on (GWallet). As an AdWords customer that has lost faith in the current system I can't wait for these new advertising programs. I don't mind paying for advertising that works.
Pay per purchase won't happen. For a start it means it's up to the advertising business to say "hey this person bought something cuz of the ad, here's your money", AND be honest about it. Google can hardly rely on the seller to do this, unless google start providing the shopping cart/payment processing etc. This also means that businesses are going to be releasing to google their sales records, which many (most?) just won't want to do.
Also, if your prices are too outragous, or your website looks dodgy, people aren't going to buy for that reason. This means that google would be sending people to your website for nothing. There's no reason why they'd do that.
The revolution will not be televised... but it will have a page on Wikipedia
Defraud me, would you? Pretty please? I'll settle for half that and I'll only take 0.02 seconds of your time while I decide whether to accept your settlement. I promise! Can we deal?
"Only the small secrets need to be protected. The big ones are kept secret by public incredulity." - Marshall McLuhan
We have a e-commerce site and got hit pretty bad from competition on click fraud. So we set up tracking on all paid advertising links. We also set it up so that if an IP came in on the same PPC ad more than 6 times in a week, they would get a landing page describing click fraud. We found that a lot of actual customers were tripping this. In the process of shopping around, they couldnt remember our URL or company name, but they could remember what they searched for to get to our site. They would click on that ad 10 times in some cases while doing comparisons to other sites. Its not click fraud, but its still pretty expensive to get that one customer.
telecommuting rules.
You better watch out, there may be dogs about . .
My understanding of the ad auction system is...
A bunch of people write an ad, and bid on a keyword, stating how much they're willing to pay for a click. When someone searches for that term, Google shows ads based on (1) how much people are bidding at that time, and (2) how many clicks those ads have gotten in the past (so dud ads don't get shown after a while).
If Google gives up to $90 mil of advertising credits to advertisers, what will happen is:
1) For recipients who already advertise, they'll probably advertise the same as they would already, but rather than paying cash to Google they'll use up their credits.
2) For recipients who used to advertise on Google but no longer do, they'll probably put some ads on there to use their credits. They'll bid some amount, which may raise bid values slightly (since these are determined by what everyone else is willing to pay as advertisers compete with each other).
Practically speaking, though, it's unlikely to have much material impact, given they sold $6139 million of advertising in the last year and it's growing at a fairly healthy rate.
MyLinkVault - online bookmarks with a fast drag-and-dr
You do realize, I hope, that this is exactly how the US balances the budget by calculating the future interest-income obtained through loans?
a nking#Increased_money_supply_and_inflation
If the national interest rate were to actually reach 0%, only then is the national debt "in balance". However, money supply increases (printing it or in the form of credits) make sure "inflation" still occurs so we have some measure of looking prosperous.
I personally believe inflation is the result of increased interest rates, which in turn increses the cost of production, carried onto the consumer, who in turn asks their employer for a raise to help pay for rising cost of goods and services....vicious cycle as you can see.
If interest rates lower back down, the pay raise won't impose more costs to production because a new loan won't be needed and production costs start to stabilize. However, interest rates that stay relatively flat or increase cause production costs to invariably rise again and a new loan is established to maintain the current level of production. If the loan is unavailable, the price is increased to substantiate that employee's request for a pay raise. If the loan is available, the new interest costs dictate the rise in price....again, vicious cycle. The alternative, I suppose, would be to not give that person a raise to keep prices down, but now you're spending more on new trainees you didn't expect because that experience worker went somewhere else.
Indeed, here's a link that very much supports your concept of labor/production requirement....the labor of the working, imho:
http://www.sonic.net/sentinel/naij2.html
But you might this one more informative, if not slightly more substantial in facts:
http://en.wikipedia.org/wiki/Fractional-reserve_b
If I really am talking out of my ass...explain it to me with respect so I'll at least pull my ears out to listen.