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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.'"
See, it all works out because they make it up from the interest on the money that they don't have to pay out to adwords accounts that aren't over $100. Kinda like how a bank makes money.
Actually there was some other article I read recently about how much Google probably makes off of that, but I can't find it now.
This comes with the territory of running an internet advertising service. Between accidental clicks and sites which 'farm' ad revenue, you stand to lose a chunk of money.
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.
Stupid articles that dont contain any actual information. Got me all excited to know how google filters the false clicks.
If sharing a song makes you a pirate, what do I have to share to be a ninja?
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.
From TFA "Google does not charge its advertisers for clicks it determines to be invalid. For example, if 10 out of 100 clicks were excluded Google would not charge its advertisers for the invalid clicks, cutting into the company's revenue."
Someone is counting invalid clicks as lost revenue, rather than counting them as, well... invalid? Who at the Googleplex used to work in the music/movie industry?
There are 01 kinds of cars in the world. The General Lee, and everything else.
Google doesn't get to charge for fraudulent clicks. That isn't the same as "loosing" $1,000,000,000.
Google isn't out any cash for the fraud, it is people who **buy** Google ads and pay per click who potentially loose money to fraudulent clicks, not Google. And there no way that Google can catch all click fraud, so it is **inevitable** that at least some advertisers will be charged for fraudulent clicks.
Nice post. Way to make Google look like the victim when they aren't the ones who actually pay for fraudulent clicks.
... is that mainstream news outlets have become so completely brainless as to parrot statements like the ones in this story. Then they wonder why people are seeking alternative sources of information.
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.
Read the EFF's Fair Use FAQ
Saying that Google loses 1 Billion dollars a year is a little misleading. They didn't lose the money; they never were supposed to have it in the first place. From the article, it seems that it is more like the fraudulent clicks add up to 1 Billion dollars worth a year, but no one 'loses' that money. They don't pay it to the websites that generate the false clicks, nor do they charge advertisers for it (at least the ones they detect, which seems to be where they are calculating the 1 billion dollars from). It is silly to say that the amount of money generated from those clicks is money to lose; it is money they never earned in the first place. If there were no fraudulent clicks, that billion dollars wouldn't suddenly be in Google's pockets. It is more accurate to say that if they charged advertisers for illegitimate clicks, they could make a billion dollars more.
What is the exchange rate from RIAA dollars to USD? Because it seems they are using the same monetary units.
ID: the nose did not occur naturally, how would we wear glasses otherwise? (apologies to Voltaire)
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?
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.
On the 0th day, God created C
Google loses nothing as a result of clicks it determines to be fraudulent, other than its time and a little server space. On the balance sheet, it's simply as if those clicks never happened. No out of pocket expenses are incurred by google. Eliminating every fraudulent click out there would not increase Google's bottom line one iota, other than its incremental costs of dealing with this fraud.
We merchants/advertizers are the ones screwed. Google says that 10 percent of clicks are fraudulent? I have zero idea if this is an over-estimate, under-estimate, or dead-on accurate. However, I do know that google has very little incentive to "mark down" my bill every month. My family runs a small business -- http://www.beadstore.com/ -- and sometimes advertise on google. How many of those clicks I pay for each month are fraudulent? Who knows. I certainly can't tell.
This isn't to say that I distrust Google. The fact is, that when we advertise, our sales go up. So something is working. Advertising on Google makes a bigger difference than any of our other venues. But those numbers suggesting that 30 percent of our advertising budget may be/once was/is potentially lost to fraud? That is truly scary.
Is this billion dollar loss calculated the same way mp3 downloading costs are?
In the same way that the RIAA is losing quadrillions of dollars to music piracy.
OTOH, I still don't know how and why they declared my site had invalid clicks and, because of it, my AdSense account would be terminated.
As far as I know, it could even be a well intentioned friend who liked the articles and clicked on all ads to help me.
Anyway, because of that, Google probably spared its advertisers a couple cents a day.
http://www.dieblinkenlights.com
Request your free CD of my piano music.
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'
The game.
There are people on the net dumb enough to believe a distant, heretofore unknown relative needs their services to get a few million dollars out of their African country. And there are enough of them for this kind of fraud to cost Americans millions of dollars a year.
I'm not at all surprised.
The society for a thought-free internet welcomes you.
One thing Google is bad about is they'll kick a site out of AdSense, with no way to appeal, if users come to your site and start making a lot of fraudulent ad clicks. You can effectively put a small site out of business doing this and Google doesn't even give a damn. They don't just not pay you for the clicks - they won't allow you to ever get paid for the clicks again. It really sucks too sense Google has kind of cornered the market so there are a lot fewer good options for earning ad revenue on your website than there used to be.
I like Google but I do think they are getting close to being a monopoly in advertising. They need to be careful they avoid being evil.
At what price learning? At what cost wisdom? The price is a man's peace of mind, and the cost is his life.
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.
Walmart's shelves are too close together so they can fit more stuff in the stores... because of that they deal with a lot of broken merchendise. Does this mean their business model is broken?
no, it just means that their business model plans on some loss.
Moonpod's "Starscape", saw in a /. banner ad, downloaded the demo, liked it, registered the full version, and I was very happy with it.
Also my current web host I found from a Google sponsored link. Sponsored links are useful when you're shopping, a bit like classified ads.
I've *clicked* on a fair few banner ads, mostly to find out what they are. But my clicks don't generally translate into intent to purchase.
You are not a brain: http://books.google.com/books?id=2oV61CeDx-YC
It's not really Google who are losing anything; the losers are the advertisers who pay out for invalid clicks that aren't caught, and the small web sites who get their sites closed because their traffic is anomalous.
I guess it never crossed my mind that by clicking on a banner ad I'd be causing economic harm. I thought the ad economy these days was all based on impressions, not clickthroughs.
:)
Makes me want to protect the little guy by filtering out all ads before they display in my browser, just to be on the safe side. Don't want to hurt anyone by accidentally clicking...
You are not a brain: http://books.google.com/books?id=2oV61CeDx-YC
Only a guess, as their methods are secret, but it seems that having a noticable number of addresses always clicking some adverts is a red flag. Of course, if you have a site which has low traffic and a high percentage are repeat visitors, then that's just the sort of clicking you're bound to get.
...by not displaying the ads at all! No false clicks from me. Are you guys doing your part too?
If you build it, nerds will come. Soylentnews.org
The worst part is for publisher that get their accounts closed for invalid clicks that they didn't do and have no control of. Obviously it's stupid to click on one's own ads, that's a banning waiting to happen, but there have been many cases recently in the AdSense support forum, that some of the more outspoken jackass publishers that actually answer a lot of questions for people have been targeted by people they have helped (and generally offended while doing so) for clickbombing their ads on their sites and results in a banning of their accounts. I watched it happen at least 5 or 6 times in the last month. I used to help at the AdSense support forum, being and active AdSenser myself, but kind of got scared away in fear of myself offending someone with a little honesty and having them clickbomb me.
The sad fact is, AdSense has no real alternative, I have used many systems and none even compare to AdSense in terms of revenue, though many claim to...the AdWords/AdSense system has it's flaws, but it's still the best there is.
The one thing AdSense could do to better their system is do what many ad systems do, have tighter requirements on who they allow to join their network, and approve per domain...not allow one account to add domains at will, but run each domain through an approval process.
dB Masters
You do not get "screwed" by fraudulent clicks by any means. The entire premise of pay-per-click, AdWords, and any other performance-based advertising is that you the advertiser have the information available to you to determine what traffic you receive from the ad system is worth. The amount of "fraud" is irrelevant -- you know what you spend, and you know the return you get from that expenditure. If it makes sense based on your ROI to keep spending, you do so. If not, you cease or alter your advertising. If Google screens out more "fraud," the bids will rise, as each individual click becomes more valuable. If it screens less, bids will drop. The end result will be that your total spend remains constant in either scenario.
All I can say is ewwww. The wiki entry http://en.wikipedia.org/wiki/Click_fraud for click fraud is much stronger and definitely stresses the "fraud" aspect as a US felony. Double ewwww. This sounds like something out of Space Merchants by Fred Pohl.
Ad-block plus is really my friend and if that kind of law can be enacted and enforced, I will gladly forgo the web2.0 experience or whatever they're calling it now. I'd like the old internet back with Usenet, mailing lists and anonymous FTP for software downloads please.
they are not losing a billion, they are not faslely charging that billion.
I recently upped my AdWords spending to the (substantial, for me) tune of $15 a day. 20% of my budget was guzzled down by four sites, which all used a technique similar to the following: they had a zillion hand-crafted content pages up, one page on each site was quite close to one of my own search terms, and the page was organized into a workflow. (Search for "apollo bingo card templates" to see the example. No way in heck I'm tossing them a link for it.)
The AdSense block is under the header for each stage in the workflow, which suggests to unsophisticated Internet users that my ads ARE the next stage in the workflow. You might think I'd be happy about that, because it means a lot of users naively click on me thinking I'm the next step in the workflow, but ALL CLICKS ARE NOT EQUAL. As soon as somebody clicks on my ad, they get whisked to a completely different site and realize "Thats funny, something must have gone wrong". So they click back and I'm out nine cents. Repeat times a couple of hundred over the last 48 hours.
My CTR (click-through rate) for ads on other sites is in the general region of 1%. Thus, I can reasonably assume that about 1% of the audience reading content with my keywords is at least marginally interested in the product I sell. The CTR on ads on these pages which drew clicks by visual deception was in the teens. That means 15x the earnings for the owners of the deceptive pages. However, the conversion rate (percentage of folks who go on to download my free trial or buy from me) from customers with normal levels of interest (i.e. from other AdSense ads, for example) is about 20%. From these pages, it was less than 2%. Thus, the revenue split from a sale of my software goes from something like 40/40/20 advertiser-Google-me to 100/100/-100 advertiser/Google/me. (I am obviously hoping to tweak the campaign to the point where it is closer to 20/20/60, but even at 40/40/20 its still a positive return on investment.)
Anyhow, when you work out the math it had me paying something close to $25 to generate a fifty-fifty shot of selling a $25 piece of software. I've since banned the deceptive sites (you can manually choose to not allow your ads on certain domains or URLS), of course, but there are still advertisers getting screwed by them as we speak. And, looking through my logs, there are a LOT of sketchy sites in AdSense which would have cost just as much if they had been blasting through enough traffic. That really threatens the utility of the platform. If its 75% conmen to 25% upstanding sites like Mrs. Smith's Teaching Resources there is no reason for me to pay a single penny for the ads since I'll have to babysit the campaign every hour or get a negative ROI.
Help poke pirates in the eyepatch, arr.
First it isn't clicks that are being counted, but rather URL hits. Google doesn't know when someone clicks something in their browser as the adwords HTML fragment doesn't include javascript). What Google knows is when an HTTP client requests the content of a specific URL (I was going to post an example but it's quite a long URL).
Second the HTTP client's request no representation to Google about it's intentions for requesting the URL's content, nor it's intended use of the URL's content.
Software Inventor
That's exactly my site. 200 unique visitors a day, 80% repeating ones, most of the rest from search mechanisms.
http://www.dieblinkenlights.com
I use Safari on Mac OS X. Every time I click an adword, it directs me to some intermediate page which then goes nowhere.
So I wonder how many "false non-clicks" they get from people like me? And then how many of my "copy the URL and paste it into the address bar" workarounds are they counting as "false clicks"?
Actually Google's policy is a bit screwy (if you are listening Google how about a reply?).
I just automated a site called www.thecommunitypage.com (using perl/catalyst/fastcgi/linux/apache if you are interested) which used to be just static pages. They have a very nasty competitor who has pulled dirty tricks, including telling people his site is theirs, and I believe their programmer is in jail or some such. Anyway, Google apparently canceled his AdSense account with them because they thought he was trying to get extra clicks, presumably by clicking on ads manually. We think it was probably this competitor doing it, but even though he explained the situation to Google they wouldn't listen and so he still has no AdSense.
At any rate, it seems quite easy to ruin someone's AdSense account and since my client wasn't doing it as far as I know, since Google didn't go after the people who are doing it they are partly to blame. Obviously AdSense is too fragile and it is too hard for them to investigate, which is why they have such a huge loophole and are losing all this money. They should roll out a new secure version of AdSense with cryptographic signatures and if they get complaints such as in my client's case they should cooperate by showing them what the offending log is, so they can attempt to prove it was somebody else. Maybe they have rolled out so much AdSense they are scared to change anything but it seems likely Google's entire AdSense portfolio is in fact quite fragile. It would make sense to scrap the current system and phase in something secure. That, or stop cavalierly breaking accounts. Disclaimer: I only know one side of the story but have a feeling it reflects reality. I don't make any money from AdSense or running the above site myself.
How are they losing money? Meaning that they aren't charging their customers (i.e. adwords advertisers) for the fraudulent clicks? That's not losing money, that's not taking part in fraud. Am I losing money by not helping rob the liquor store down the street?
The money they spend on actually detecting fraudulent clicks is lost, but it can't be $1 billion... and if it is I'd like to meet the handful of programmers that are pulling in $100mm a year. But really, whatever they're truly losing (maybe $1mm a year tops?) is just part of doing business in a world with a small percentage of dishonest people. It sucks, but all businesses have to deal with this.
And it's not altruistic of them to bother detecting and discarding those bad clicks -- if they didn't do this, conversion rates would be lower, adwords would appear less effective, and thus people would pay less for it. It's just good business.
Cheers.
I think that you have every right to ban Google ads on your own computer, but I don't think that you fully appreciate the beauty that lies within their system. Google displays ads on my pages that are relevant to the subject of my site. Because the ads are relevant to something people are already looking for info on, they are much more likely to click on an ad. When they do this, EVERYBODY WINS! The site visitor wins because they find information on a product they were looking for anyway, and they are not obligated to make a purchase. The advertiser wins because they not only get a hit to their site, but it is a hit from someone who was already looking for information related to what they sell. The publisher wins because they get a cut of the profit. Google wins because they get a cut. Few other ad companies can compete, because their ads aren't relevant! Yahoo tries to compete -- but I have been in their beta ad system for a year; They pay much more per click than Google, but the click through rate is so small because of ad (non)relevancy that we still make more with Google! I believe a more appropriate definition of "fraudulent click" is a click that is only for the purpose of costing the advertiser money or making the publisher money (or getting a publisher in trouble). Google is only attempting to not count fraudulent and accidental clicks against the advertiser. Your definition is not Google's definition and I have heard nothing about an attempt to sue people who have accidentally clicked on an ad. I don't believe there is any law that says you have to intend to buy a product - but you should have an genuine interest in an ad if you click on it on purpose. Your bad intent can really only be shown if you are clearly clicking on a ridiculous number of ads than any honest person would, or clicking on ads that are on a website you own. Many people click on ads accidentally once in awhile, but how many make that mistake a hundred or more times per day? At some point this type of activity does become criminal, but to be worried that you are going to go to jail for one slip of your pointer finger is simply ridiculous.
Real-life example of click fraud detected through a moderately unusual method -
http://www.realmeme.com/roller/page/realmeme/Weblog?catname=%2FClickFraud
I very much do mind how this term is defined. Read the wikipedia entry (which could only have been edited by an advertiser). I very much object to the wording. I very much object to the fact that the "blocking ads is theft" meme even exists with legs on it - what next, is email SPAM blocking to be considered theft as well if you don't click on the link and buy from the provided link?
The bigger picture is a frightening one and most reminiscent of the dysfunctional society in Pohl's Space Merchant/Merchant Wars novels where the world leaders are all the heads of advertising agencies.
I find it most ironic that several of the people posting here confess to fraudulent clicking (by the definitions Google brings up when you web search them for "click fraud") when their intent was to be friendly to the webmaster of the pages they were visiting.
For once, the
[*] O.K., O.K. I bought Burning Crusade when I first saw it was made available for download from Blizzard over the internet from the initial WoW screen, but I'd already decided to buy it before that point.
I aggressively block advertisements, including googlesyndication.com, without compunction. My screen, my rules and all that. (Since I had the Sky Plus put in, I don't even get adverts on TV anymore! I just wish I could get it to display the time in the VCR notation to which I have become accustomed, i.e. 20:30 as opposed to 8:30pm.)
However, I'm thinking of making a "next-generation" ad-blocker which will download (and discard unseen) the target pages of advertisements, in the background, deliberately just to cost advertisers money. Because maybe if everyone clicked on adverts but then didn't buy the products, the advertisers would twig that adverts don't work -- and maybe then, they might stop doing it.
Je fume. Tu fumes. Nous fûmes!
You lost credibility by advertising your site at least twice in this thread. Is it that hard to hold back on promoting in every post?
If every time you see an add you suffer ~10 cents of annoyance, you must gain at least $0.50 of pleasure from most of the websites you visit (or have extensive adblock, or you're a total moron). Regardless, I don't have any sympathy for you- you're like an old lady complaining about how annoyed you are every time you see someone younger than 40, but you still go to the mall, the theater, and the pool.
"They invade my life, in their small way, every time I see them, so I can't really reason with them as with a friend, or even a disinterested stranger"
You are reading a copy of my copyrighted post.
Q: When does demonstrating actual experience with the subject matter of an article result in less credibility?
/.!
/. users are a key target demographic for jewelry and beads? It was relevant. It was timely. It was interesting. It demonstrated that I have an informed basis for making my comments. Relax man.
A: On
Seriously, do you think
Adsense is just crazy. I have no clue but after using them for our website and placing the banners in all the pages over a month and a half we had 7 dollars(hey.. its money right?). Then slam, they cut us off without explanation saying we were getting to many high "invalid" clicks and took all the money earned back. I have no idea how that could happen since no one I know of or associated with were doing any fake clicks. I know that we have thousands of downloads a month and so someone much be viewing the site. Its pretty sad that they did not even ask what style of website we had. In fact, i know that the first week we had to keep invalidating ads that were for competitors for our site.
/.) and over time they click? Could they even track Tor/Onion clicks? In the end.. Whatever method they are using has to be flawed.
So it got me thinking, how could Google really know what is a fake click or not? clicks from same site a couple times a month? what if the site attracts same people over and over again (like
Google Adsense is not on my radar for making any money off a website.
I can program myself out of a Hello World Contest!!
You come into MY world, with your commercialism, and you expect me to care about what does and does not cost you money?
I don't mean offense but honestly....who is to say what I should and shouldn't click? If a link is present, I may - or may not - click it. It is 100% up to me. In fact, it's so much my decision -- that you have absolutely no control or influence on my decision.
I am sorry if my whims might cost you money. Perhaps you should find a different model or a different way of doing things. We (the internet) got along just fine before advertising and we will get along just fine if your ads disappeared. They won't, of course. But that is beside the point. The internet is based on an open architecture. Open and free (in the technical sense) access to information. That is the default. Not the other way around, as much as the commercial powers want it that way.
I say this because it seems to be that the main goal of the commercial powers that be is: to change how the internet works. The rest of us are appalled at some of the rules and regs the internet has taken on since the commercial interests arrived.
And just for the record, I am not anti-commercial. I just think it's funny when commercial interests complain that users aren't doing things "the right way" and it might cost them money. Boo-hoo. Go find another way to accomplish your goals.
(note: sorry to pick on you...it's not personal. You just represent the "commercial" interests of the internet)
Snap, pretty much the same as my site. Advertisers see that most of the clicks coming from your site are from the same people. They don't know whether it's people who are interested in the products, or just want to get you some money. And when Google gets around to looking they say it's the latter, and bye-bye AdSense. It's understandable that there's false positives, the trouble is that Google doesn't give any explanation so you can't investigate or put in anything to block them.