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How Google Manages Click Fraud
Finin writes "In February 2005, Google was sued by Lane's Gifts & Collectibles in a class-action lawsuit over click fraud. The company alleged that Google had been improperly billing for pay-per-click ads that were not viewed by legitimate potential customers. As part of a settlement earlier this year, Google agreed to have an independent expert examine their click fraud detection methods, policies, and procedures and make a determination of whether or not they were reasonable measures to protect advertisers. The report of the expert, NYU Information Systems Professor Alexander Tuzhilin (a Professor of Information Systems at NYU), is now available." Update 07/26/2006 at 12:52 GMT by SM: Fixed the link to Tuzhilin's report.
this is the correct link, the other one is just legal blahblah:
t .pdf
http://googleblog.blogspot.com/pdf/Tuzhilin_Repor
Google is (as of yesterday) now showing statistics about how many invalid clicks an adwords account has recieved. You can read all about it in the adwords blog
Rather it is the answer to the judge and mentions (2 or 3 times, shortly) the report of the expert. All the meat that is to be found in the PDF is that the report is conclusive that Google does all it can reasonably to combat click fraud.
The PDF is interesting only if you're interested in legal stuff...
My 0.02
One shall speak only if what one has to say is more beautiful than silence
If you don't have time to read the full 47 page report, Search Engine Watch has summarized some of the most interesting findings.
404 - File Not Found
He who knows best knows how little he knows. - Thomas Jefferson
The last link is actually very good, and an easy read. Surprising for a legal document. It is "Googles Omnibus Response to Objections". I suggest giving it a read (PDF) http://googleblog.blogspot.com/pdf/objections_resp onse.pdf
It is basically a response to the objections of a grand total of 51 people in "the class". An incredibly small number of objections.
From the document:
"The assertion that Google has done nothing wrong was echoed by advertisers that opted out of the settlement."
"Unlike Retailers, Pay per click advertisers can limit the money risked for each click and for each day...Businesses should treat pay-per-click advertising like any other advertising...If it's costing more to advertise than your resulting profit, STOP ADVERTISING."
And, regarding the "click fraud detection", there is only a small portion of this document that mentions the review process by Dr. Tuzhilin. It does mention that the click fraud detection methods by Google were confirmed to be reasonable.
And finally, it was interesting to see read the jabs taken at the lawyers who brought the class action lawsuit to begin with...and the copy-cat cases from California, obviously a bunch of ambulance chasers.
Ironically, Enron's motto was actually "ask why."
Let's say your advertising budget is $100. In our example, each $1 you spent on advertising (historically) returns you $20 in sales and $5 in profits. You spent $20 of your budget on Google Adwords, 25% of which went to click fraud. So that's not only $10 wasted, but $200 less in sales and $50 less in profit that you could've had if there was no fraud.
That's the basic logic, I believe.
Small potatoes make the steak look bigger.
http://wwww.p2pnet.net/ is a website deicated to filesharing news. The owner of the website, Jon Newton, runs the website and barely breaks even. He subscibed to Google's adsense in order to generate some revenue. When a story about a filesharing lawsuit broke in the lamescream news, an article in p2pnet was referenced. This article generate a huge number of visits and therefore a much larger than usual number of adsense clicks. Rather than pay what was owed to Jon, Google accused Jon of click fraud and even showed information implying his guilt. Google continues to ignore Jon's request for information relating to this accusation and refuses to communicate with him to clear things up.
You can read about it at http://www.p2pnet.net/story/9086 . This has happened not only to Jon Newton but also to many other small website owners. I am a Geek who used to love using Google, but now that Google has become big, it is doing what most other big companies do - screw the small guy and just walk away. Needless to say, I use alternative search engines instead.
I conclude that Googles efforts to combat click fraud are reasonable.
Maybe should have been in the summary. The document is also fascinating account of how they go about it however.
But "outdoor advertising" firms make no representations that they can measure these things. You know what you're getting when you buy space on a billboard.
I worked in advertising for over a decade and your statement is totally false. These days EVERY advertising medium being pitched to a client MUST contain all kinds of analytical data backing it up, and this includes billboards. Locations, lighting, traffic patterns, etc, etc.
And I'm sure that some outdoor media companies have their own internal research demonstrating that some locations feature superior demographics (ie, this road is between the corporate HQs and the wealthy suburbs and gets seen by all the wealthy commuters).