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

Upside down logic

[Anonymous Coward]

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.

Bad math, bad logic.

[JoelKatz]

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.

Re:Bad math, bad logic.

[karmatic]

Actually, paid out, or not, makes no difference. Either way, it doesn't cost Google anything.

Let's take a look - clicks are either legit, or aren't.

Legit Click - Money comes from publisher (not Google), and Google gets a cut.
Bogus Click, Caught - No money changes hands. Without said bogus click, Google makes exactly the same amount of money.
Bogus Click, Not Caught - Money comes from publisher (not Google), and Google gets a cut (profit).

If you look the scenarios, the only for Google to "lose" money is to mis-detect a legit click as fraudulant, as the publisher gets a legit click for free. Google, of course, minimizes this likelihood, and makes sure it's more likely to have false negatives than false positives (I spend enough on Google, and do my own metrics to know this is the case).

Fraud costs _publishers_ money; it _makes_ Google money (up until the point when advertisers start jumping ship).

Ads

[Threni]

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.