False Ad Clicks Cost Google 1 Billion Dollars A Year

Meshach writes "There is an interesting story at CBC which claims that Google loses one billion dollars per year to fraudulent ad clicks. The article contains an interesting description how how the company determines if a click is false. 'The company explained that it determines which clicks are invalid through a three-stage system. Most of the illegitimate clicks are automatically detected analyzed and filtered out in the first stage ... The second part uses automatic and manual analysis of the AdSense network to weed out false clicks before they are logged to an advertiser's account.'"

Comments

There's definitely some problems...

[Creamsickle]

The small company I work for has about $1M in sales annually, and we spend almost $250,000 a year on Google Adwords. Roughly 85% of our sales come from Google. We're getting a conversion rate that is less then one percent and it's gotten worse over time. If it continues to drop, we'll have no choice but reduce our adwords cost-per-click limit and take our advertising dollars elsewhere. No matter how you spell it, that means problems for the G00Gmeister.

Re:Bad math, bad logic.

[daeg]

Google could charge for the clicks. Then they'd make that $1 billion back.

However, they'd also stand to lose a lot of customers. Our AdWords bill is high enough for a small company, paying extra hundreds or thousands a year for fraudulent, worthless clicks would scare me the hell away from AdWords.

Much of AdWords' value to Google is in keeping a high number of subscribers to keep the bid prices up relatively high on popular keywords. Losing popular subscribers could send prices down, costing them even more money than from losing an individual customer.

Re:Ads

[CrazyJim1]

You didn't ACTUALLY specify that your brain could be removed only after said action.

He has the special power of immunity to advertising. Sylar will be around to collect his brain soon enough.

Founders: Click Fraud Is Google's Greatest Threat

[MichaelCrawford]

A while back I read that one of Google's founders said that click fraud is the greatest threat to google's business. This is because Black Hats publish websites with AdSense, then fraudulently click the ads on their own pages. They get paid by Google, and the merchants who placed the ads through AdWords Select pay for the fraudulent clicks, but don't enjoy the increased sales that advertising can bring.

Re:Ledgerlines

[tompaulco]

Hmm, well, they seem to not want to pay me until I have $100 balance in adsense, but they are perfectly happy to bill me every month when I owe them $6.03 for adwords.