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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.
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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
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.
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...
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
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?
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
here and here.
They answer your questions.
Google wants you to get good value for your money and are doing it in their usual excellent way.
Friends don't help friends install M$ junk.
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
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.
http://outcampaign.org/
"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.
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.
Interesting links - which I probably wouldn't have found without looking specifically for them, or without someone like you helping me out. What I've learned essentially is that I'd have to go through logs that I may or may not still have going back years and look for suspicious activity - and that I'd have a hard time doing that without doing some more efficient ad tracking than I had originally employed.
What I don't like about this proposed settlement is that it places the responsibility on defrauded advertisers to do research, make a claim, and be prepared to defend that claim with data they more than likely no longer have access to. It would be better if Google went through their logs and performed some of their more recent click fraud algorithms against old data where possible, then contacted those vendords they knew that were affected. Alternatively, give everybody who had an active adwords account for the time period in question a credit for a reasonable percentage of their average monthly expenditure during that time.
What isn't clear to me from TFA is the specific cause of action that invoked the settlement. Perhaps if that was more apparent, I could see google's side of the street a little better.
'But how is it fraud?'
The problem is that Google is charging advertisers for adverts which were not seen (by humans).
I can understand that the advertiser feels cheated if Google charges advertisers for 1 million clicks on their adverts, but 999,000 of them were faked by a script and only 1000 times a human end-user clicked the advert.
The problem gets worse when companies are deliberately faking clicks to create huge advertising bills for their competitors, even though their adverts are not being viewed. Similarly angry customers could do this to 'get their own back' on a company that they feel has cheated them.
Google has a problem here and they need to fix it or people won't want to risk using their service to place adverts.
I'll probably be modded down for this...
Also, it depends on what Google's contract was. If Google said they'd bill some amount "per click-through", but it can be shown that nobody was actually clicking and Google billed the amount anyway, a court might say that Google owed the plaintiffs some damages. I'd guess that it's not *actually* fraud (in the criminal sense), though, unless Google had knowledge of specific instances and decided to bill the plaintiffs anyway.
IANAL, YMMV, GYOLA.
http://outcampaign.org/
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
You answer's in your question!
:)"
:-p
"So "click fraud" is running a script that will work fine with no mouse attached to the system, and without ever _clicking_ on anything?
If it's pay-per-click, you shouldn't be paying if no clicking is taking place!
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
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.
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
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.
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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.
Schraegstrichpunkt what does internetcloning.com have to do with click fraud? Their website sounds too good to be true. I value your insight.