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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.'"
It's more like $1B dollars in fraud is not passed on to the advertiser. Many billions more probably are. Google isn't losing a thing.
The logic behind this story is bogus. The $1 billion in money that these fraudulent clicks cost Google doesn't exist. If not for the bogus clicks, these clicks wouldn't exist.
It's like a software company claiming that false orders cost them $10 billion dollars last year because they received an bogus order for 100,000,000 copies of a $100 product. Had they not received the bogus order, they would not be $10 billion richer.
Duh.
Assuming that each account has $99.99, and that Google can get a 10% interest rate with that money (they may have to pay out on it, after all, so they've got to keep it close to liquid), it would require 100 million such accounts. Somehow, I'm doubting that they make that much off of it.
I've been on the net for about 11 years now, and I've not one single time ever deliberately clicked on an ad because it was interesting. I've clicked on accident; I've clicked to allow a download to proceed, or to get a limited time pass to an otherwise charged-for service/site, and I've clicked just for a laugh to fool people into thinking I give a shit, but the day I start to get interested in and buy products based on commercials (online or elsewhere) instead of reading reviews, comparing alternatives and talking to friends/family who've bought something is the day you can take my brain out and give it to someone else.
Click fraud is only inflating the number of clicks made by $1B. Roughly 10% according to the article. Sounds suspiciously low to me. Spam certainly comprises greater than 10% of all email sent, why are click fraud rates so low?
I'm often confused by why people think that there's some mystery cash floating around in Google's (or any other online advertiser's) pocket. There's an obvious need, when payments are tiny, to limit the frequency of transactions so that aggregation can happen. However, it's not like your Google AdSense account is a money market account with cash sitting in it, gathering interest. Google simply has a line-item in their budget for payables that cannot be issued yet because the transaction fees on cutting someone a check for $0.03 cost them more than the payment itself.
My web host has a nearly perfect system. If someone clicks on the "hey, buy a package from my hosting company" link a cookie is generated. If he buys a web package from that computer before that cookie expires in 60 days or whatever, I get $100. That's right $100 in cash, not hosting credit, an actual check for $100. Yeah some people have cookies disabled but there's other methods that would work better. So basically that purchase based system removes 100% of false clicks and still leaves in like 99% of valid customers. Seems fair to me and the people who let the ads on their website stand to make a way bigger amount of money if they bring valid customers cuz it's basically a large commission on sales. The only problem is if the ad company keeps serving up crappy ads for products nobody would ever buy you don't make any money but you wouldn't make very much on that type of ad through clicks either.
Google's Super Secret Search Algorithm: SELECT @search_results FROM internet WHERE @search_results = 'good'
This is actually even worse. It could be argued that someone might buy a CD or a movie if they were unable to pirate it. But, you can't say that google would get more legitimate clicks if they could eliminate the fake ones.
People probably have that idea because every $0.01 of every click in your unpaid Adsense account was paid for, up front, by the advertisers, with real money.
There are places where the networks are not touching,and there are places where they are-Boeing's Lori Gunter
We just completely stopped our Google Adwords advertising. We have looked at print, mail, radio and other media advertising, but every time we run the estimated numbers, we find that spending money on advertising would bring us less money in increased sales than we spent on the campaign. I have long suspected, and now believe strongly that the marketers are best not at selling your products but at selling the idea that you need their services.
If you are not allowed to question your government then the government has answered your question.
Well, if you are depending on your advertising distributor for your business, you would want your advertising distributor to be profitable, so that they don't disappear into bankruptcy.
A profitable business is one that you might be able to sue and get money out of. If they are not profitable, and they steal your money, you may have no recourse as the money may not be there to recover.
Hope that clears up why someone might care if the people they are doing business with are profitable or not.
Personally I am not concerned if the bike shop I patronize is profitable, however if I made my living with bikes, (racing, courier service, etc.) I would care about the profitability of the bike shop I did business with.
Hope that makes sense.
Work bio at MMWD