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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."

17 of 132 comments (clear)

  1. Wired had a nice piece a few months ago on this by Hulkster · · Score: 5, Interesting

    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.

    1. Re:Wired had a nice piece a few months ago on this by linguae · · Score: 5, Funny
      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.

      I want to post an insightful response, but Google Girl has stonewalled my thoughts.

      must....post...insightful...can't...resist...

  2. It's credits - not dollars by tacokill · · Score: 4, Insightful

    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"?

    1. Re:It's credits - not dollars by LiquidCoooled · · Score: 5, Informative

      Also, they say its not just for Lane's Gifts.
      It is a 90mln limit based on how many people apply for backdated invalid clicks.

      From the blog linked above:


      For all eligible invalid clicks, we will offer credits which can be used to purchase new advertising with Google. We do not know how many will apply and receive credits, but under the agreement, the total amount of credits, plus attorneys fees, will not exceed $90 million.

      --
      liqbase :: faster than paper
    2. Re:It's credits - not dollars by dwater · · Score: 5, Insightful

      > the total amount of credits, ***plus attorneys fees***, will not exceed $90 million

      Well, that must reduce the amount a little, surely...

      --
      Max.
    3. Re:It's credits - not dollars by flyingsquid · · Score: 4, Funny
      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"?

      Plus, if Google is clever, they'll get just some guys to click on the ads bought with credit and use up that $90 million in no time...

    4. Re:It's credits - not dollars by ensignyu · · Score: 4, Funny

      Maybe the attorneys get credits too! Suddenly, the web is overrun by ads for "Need legal service cheap?" and "Injured by java api manual?"

      Bidding prices for the adwords "lawyer" and "class action" jump into the thousands.

  3. Tip of the iceberg by jimmyhat3939 · · Score: 5, Interesting
    My guess is this is just the tip of the iceberg. It's a smart move for Google to try and resolve this stuff once and for all, but I doubt strongly this and related issues are likely to go away anytime soon.

    Reasons why I'm concerned about Google's business:

    • The fact that it's basically impossible to ascertain how prevalent click-fraud is.
    • The fact that many many people accidentally click on ads. Don't believe me? Try clicking *anywhere* on the blue ad box that shows up over results. Notice that a click even way on the right of it counts.
    • 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).
    • Do you seriously believe Google can keep getting $0.11 of revenue per search done on the site? Don't believe the statistic? Read the SEC filings and compute it yourself.

    Cue Google-fanatic flamewar.

    --
    Free Conference Call -- No Spam, High Quality
    1. Re:Tip of the iceberg by neodiogenes · · Score: 5, Informative

      1. It is possible to measure click fraud. There are certain statistics that can be used to calculate its effect quite accurately, even if they can't be used to determine it on a per-click basis.

      2. This may be true but in the end the value of a click is the choice of the consumer. People clicking accidentally on a Google ad is no different from people "accidentally" hitting the remote in the middle of a Bud commercial and missing the second half of the 30 seconds. These accidental clicks are factored into the overall effectiveness of the ad.

      3. Most small business might be in the honeymoon, but not large businesses. Most of these are looking very seriously at the bottom line, and finding it's lower than they expected.

      4. At the per-click rates customers pay for certain terms, yes I believe it. Compared with other forms of advertising paid search is turning out to be an incredible value. The main question is how much Google and Yahoo can continue to fine-tune the targeting to squeeze out that much more revenue.

      --- not a Google fanboy as such, but convinced online advertising is where the money is at.

  4. And in other news... by DeafByBeheading · · Score: 4, Funny
    Don't believe me? Try clicking *anywhere* on the blue ad box that shows up over results. Notice that a click even way on the right of it counts.
    ...businesses that advertise with Google are planning to file suit against jimmyhat3939, alleging enticement to commit click fraud.
    --
    Telltale Games: Bone, Sam and Max
  5. Re:Measuring Results by M0b1u5 · · Score: 5, Informative
    We do things differently on the web. Your suggestion **IS** used by some advertisers, but I suspect it is not too popular.

    On the web, all you have to do is create different landing pages for each of your adverts. These are unique, and the stats speak for themselves.

    Using decent server side code, it's also possible to distinguish which advertisement your actual purchasers arrived from, and this is quite prevalent amongst serious e-commerce businesses.

    If your IT department isn't all that good, you can splurge big time on a very sophisticated WebTrends account, which will do all this stuff, and a lot more besides.

    --
    How many escape pods are there? "NONE,SIR!" You counted them? "TWICE, SIR!"
  6. $90mln? by Trogre · · Score: 4, Funny

    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
  7. Click Fraud Facts by JehCt · · Score: 5, Informative

    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.

  8. Re:WTF is "click fraud"? by Schraegstrichpunkt · · Score: 4, Interesting
    This is click fraud:
    while true ; do wget -O/dev/null 'http://www.google.ca/url?sa=l&ai=BGJPNr64PRKWpIYv 0pAKh-Nj9DtLDihP2_NviAY6Z8ASAwLgCEAIYBCgIOABAzBBIi TlQ5o2j9f______AZgBnEqqATBvcmcubW96aWxsYTplbi1VUzp 1bm9mZmljaWFsK2ZpcmVmb3hfbm9ucmV2c2hhcmXIAQGVAhE3S Ao&num=4&q=http://www.internetcloning.com' ; done
  9. Lame by Anonymous Coward · · Score: 4, Funny

    Title says "Pay X", description says, "Pay Up To X", will the actual article say "Pay some amount which may be X".

  10. Re:WTF is "click fraud"? by MarkByers · · Score: 4, Interesting

    '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...
  11. Re:It's ALL credits - not dollars by x2A · · Score: 4, Insightful

    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