Google's Click-Fraud Crackdown

An anonymous reader writes "Wired reports that Google is making some effort to put a crack in the practice of click-fraud. Because of the pernicious abuse of the company's advertising business, it simply can't be sure that anyone is actually looking at the ads. Bruce Schneier talks about the problems of ensuring that people are really people, and Google's solution." From the article: "Google is testing a new advertising model to deal with click fraud: cost-per-action ads. Advertisers don't pay unless the customer performs a certain action: buys a product, fills out a survey, whatever. It's a hard model to make work — Google would become more of a partner in the final sale instead of an indifferent displayer of advertising — but it's the right security response to click fraud: Change the rules of the game so that click fraud doesn't matter."

that's bad

That way, Google will want to enforce it's ad (avoid ad blockers, make them more visible, etc) even more.

CPA good for google, but...

CPA is a good model for Google and a very good model for advertisers. Advertisers, in effect, can pay for only the advertising which results in a sale.

Small publishers, however, will likely suffer. The vast majority of click-throughs on text ads result in no sale. Yet publishers still get paid for it. The only way this would balance out would be for the payment to publishers per action to go up. That would be fair. But I think the small bloggers who like to use adsense will lose revenue from this model.

Re:CPA good for google, but...

What monopoly in search? Google has less than 50% [searchenginewatch.com] of the market for search, and they have a significant competitor in Yahoo search marketing (used to be called Overture) not to mention the banner ad people such as doubleclick, although I couldn't find any comparison of the services relative market share.

Google has not attempted to artificially raise the barrier to entry of the search market, unless they are involved in something i am unaware of, you can get some clever people together, some big hardware and a gigantic pipe and make your own search engine or pay per click advertising. Same for payment processing; Google are not engaging in dumping of Google Checkout, it is infact more expensive than it's biggest rival Paypal.

(Full disclosure: I have used paypal to pay for things, google & yahoo to search, and I block all adverts with adblock plus and filterset.g)

Re:CPA good for google, but...

Driving direct sales is only a small part of what advertising is really for, though. Advertising is also about creating mindshare for your brand. Just because I don't immediately go and buy something from you when I see your ad doesn't mean I won't eventually buy from you as a resuly of seeing that ad. In this case, seeing the ad has convinced me to choose your brand when I am ready to buy, even if I don't buy right when I see the ad. This is effective advertising.

By ignoring this type of advertising, Google is basically giving it away for free. Sure, it's good for advertisers, but I'm not so sure it's good for Google.

Re:CPA good for google, but...

The biggest problem is tracking the click through to the action verifiably. Once a user clicks and ad and goes to WidgetsForSale.Com, the WidgetsForSale folks would need to track their activity and determine whether a sale results (q: within how long?), and report those sales results to Google so they can pay for the ads. That doesn't sound like a very tenable model - it relies on the WidgetsForSale folks tracking data and reporting to Google how much they should pay, rather than Google billing them.

The only way I could see that working is with mandated use of the Google payment system perhaps, so they could generate some link between ad clicks and purchasing activity. That seems a mighty steep hill to climb, however...

Re:CPA good for google, but...

Actually, Google has a better solution for that. If the transaction is online, you can embed a small piece of HTML/Javascript code in your 'thank you for purchasing' page that allows Google to check the value of a cookie they placed on a customer's computer when they clicked an ad.

The cookie links the click to the sale. And there is value to the advertiser as well: Google can then help you track which ad resulted in a sale, and which keywords it was linked to. (So you don't have to buy an expensive but poor-return keyword.)

(I may be mis-describing: Check Google's docs to be sure.)

This was news 10 years ago

Really. When I first read about web advertising 10 years ago, this was one of the models described. I think it was heavily used by some online bookstores where the website showing the ads would receive a percentage of that customers sale.

Doesn't solve the wider problem

This approach may or may not solve click fraud, but it certainly doesn't solve the wider problem of proving that it's a human performing some action instead of a computer - and that one definitely needs to be nailed.

There seem to be at least two alternatives - you could use a chain-of-trust type model such as TCPA to be able to remotely prove that [a] this packet is coming from [b] this program that is [c] digitally signed by this party who [d] asserts that it only accepts input from humans when run on [e] an operating system that will ignore [f] debuggers and [g] un-approved input devices. But this seems unworkable and contrary to the spirit of open computing.

A better solution might be some kind of fingerprint reader that generates digitally signed "proof of life" which can be demanded by remote sites. For instance if you want to post a blog comment you have to touch your finger against the reader which is now 'charged' with 10 proofs - enough that a legit user probably won't be bothered again for some time, but not enough to make automatic spamming profitable.

I don't know of anybody developing such a thing though.

Re:Doesn't solve the wider problem

Who cares whether it's actually a human? What you really care is that they purchased your product. If the payment is tied to that, it becomes irrelevent who clicked or how they clicked.

They spent money because of your ad. So you can afford to pay for the ad.

And if an AI was the one who spent the money, great. As long as their credit card works.

Re:Doesn't solve the wider problem

It matters because not every advertiser on AdWords is actually selling something. So, cost per action ads even if fully deployed won't solve the problem for everybody.

Biometrics to record clickthrough...

A better solution might be some kind of fingerprint reader that generates digitally signed "proof of life" which can be demanded by remote sites.

To record an ad impression? Let me get this straight. You're honestly suggesting that users submit their fingerprint to verify they've seen your ad and you expect people to submit to this? Are you high?

I mean, it's inconvenient, and invasive! Now if you can just find a way to make it really uncomfortable for the user while they're at it and you'll have achieved the prostate-exam trifecta that everybody shoots for when they want to pitch a new product idea.

Doubtful...

So your saying that Google wants to know about what visitors do on your site AFTER they leave the ad? First, are companies going to just give that away? Second, they could just fake it...oh, they completed the first part of the survey but not the "second" part of it.

I didn't RTFA, but just like everything the overall price of a good/service is going to be slightly inflated to cover the costs of fraud/defects/lawsuits/etc. If you are going to pay Google for ads, then you just have to accept that there is going to be somebody somewhere trying to make an easy buck at your expense. I'm not saying that we shouldn't try to stop it, but I don't think this approach will work.

Suspensions of Google accounts

I had one friend who wondered why she was suspended and it was simple, Google logs the IP of the address you check your account from and matches it up against the click throughs.

So if you're gonna commit click through fraud......

Get a free IPod if you click on this google ad.

This will probably lose Google money in the long run. I tend to regard any website that asks me to complete a survey for no reason as a scam. If they base it on people buying things, they're going to find themselves forced into a payment processing business so they can ensure that they get paid when these websites get paid. While THAT might be an interesting concept for them, they'd probably just as soon buy Ebay to get paypal for that, otherwise they're going to be putting themselves in direct competition with PayPal.

Terrible Idea

I'm an AdWords advertiser and click-fraud means zero to me -- in fact, I don't care either way. All AdWords-advertised sites make a better profit from AdWords than one can believe -- it works. If even 10% of the clicks are fraud (I _highly_ doubt it), I don't care -- the profit is still better than most advertising campaigns.

I also get a ton of impressions -- most of my ads have a click through rate of under 5%. Considering that 95% of the unclicked ads still form a brand impression, I'm even more satisfied (free advertising, basically).

AdWords advertisers who complain are just idiots. I've run TV, radio, magazine and newspaper ads for years and never had this kind of ROI.

I'm also an AdSense publisher, and I don't see what people bother with fraud. For the few bucks you make an hour trying to defraud the system, you can do a better job selling something online and using AdWords to drive business to you.

Re:Terrible Idea

It depends on the term - it's easy to rack up $125/day for the right terms (mesotheliomatic cancer, anyone?). For a lot of people, that's a good chunk of money.

All you need is an internet connection, some proxies, greed, and a "they're rich americans (because they exploit everyone else) so they deserve what they get" mentality.

How do I know this? I'm an adwords advertiser, and I tracked down one of the site owners who was doing a fair amount of fraud on one of my terms. One of the proxies he used had an X-Forwarded-For header, and I found his IP in an IRC log, and finally managed to track him down on IRC. I pretended to be a fellow fraudster, and we compared account screenshots. The guy was very proud that he was making over $4000USD/mo. His sites were simply wikis with stolen content (it's easier to make pages for a specific term that way, I guess). He did the clicks himself, and had a proxy program that simply took from a list of proxies and picked a random one every page load. He actually sat there for several hours a day clicking, and made about $40/hour to do it.

For some advertisers, it is a huge problem, especially when paying $10+ per click.

Dangerous ground

This could open up a big can of worms, precisely because it increases Google's stake in the actual buying process. The protests over ads for controversial stuff like religious or medical items, "adult" materials, political stuff, and so on simmer to a faint background hum when Google is just churning out automatic ads, but if Google can be shown to be taking part in the actual sales and transactions of this stuff their critics are likely to pounce on that. "OMG Google is selling evil pr0n/Satanism books/weaponry/GTA San Andreas/Online Gambling/etc..."

Fraud? Or a flawed business model?

TFA talks a lot about fraud, but what do you call it if I finish reading the article, and I click the nice linkies at the bottom with no intention of buying anything? What if I don't need a "Trojan remover download", credit report restoration, a work-from-home scheme, or (my favorite) to "Make Money With Adsense" with help from some outfit called cash-sense dot com.

So if I do four shift-ctl-clicks (open in a new window, keeping current window active, I love Opera), am I a bored 'net surfer, or have I just committed Click Fraud? For the advertiser, is there really any difference?

I remember when this was all fields

::Old-fart Now while Google's advertising is generally pretty inoffensive what's with the idea of putting adverts on anything that stands still long enough for the paint to dry? There are blogs running on $2/month webhosts that use AdSense. Just because it is possible to make money doesn't mean that it's an appropriate thing to do. It reeks of the same kind of greed that causes people to put lengthy disclaimers on their naff short stories or trivial programmes (copyleft excepted) just because they can't stand the idea of missing out on 5 cents. ::End

IP Block

I would like to have the ability to see which IPs are clicking my ads and then be able to block them - i.e. my competitors and other random fraudsters.

But can it defeat the monkeys?

ClickMonkeys [clickmonkeys.com] worked for Pets.com and MSN, certainly it can work for you!

Why not regular ads ?

Just charge for space just like the paper.

Just needless complexity in the current system.

Wrong Direction

This is headed in the wrong direction. The traditional role of the ad is to attract the eye, and get the consumer to consider and then remember the product when they want/need it in the future. Even if the ad isn't clicked on, the company advertising is getting itself noted and noticed, for free. That's the entire value of traditional print, radio, TV and billboard ads, just given away by web content providers. It's unreal, and is stifling the growth of online media. I suppose it's OK for enormous middlemen like Google, but it sucks for those making and maintaining websites. Advertisers have gotten too much of a free ride, and the models used to support this free ride... banner ads, popunders, flash ads, etc... have been largely self defeating.

Making the burden on the content creator heavier and more onerous before they get their dollar is not the way to go. The middlemen and the ad buyers are getting too much for too little in return. New models need to be developed. I'm in favor of the old fashioned sponsorship: flat fee so it's a predictable expense for the ad buyer, and predictable income for the content provider. I'm sure there are other ways to charge advertisers what their advertisements are worth, and increase their effectiveness at the same time.

This new Google approach doesn't deliver.

SoupIsGood Food

Flawed plan

Advertisers don't pay unless the customer performs a certain action: buys a product, fills out a survey, whatever.

I can't see that working with most ads. If I'm surfing the web and happen to see an ad for something interesting, I don't stop everything I'm doing while I dig up my credit card and place an order. I don't even stop everything I'm doing and fill out a contact form. I bookmark the main page (losing all the redirect info in the process) and come back to it after I've finished whatever I was doing.

The survey thing would make click-fraud easier. Fewer people are going to fill out surveys, so fraudsters could earn more ad money from each one. (Assuming that the advertiser has a fixed budget.) You could get away with having fewer unique IP addresses, which is a big win, and a lot of the random demographic information could be automated across surveys.

victim of click-fraud

On two occassions, I've had my google account cancelled and funds withdrawn because Google accused me of click-fraud. Of course I had nothing to do with it and when I pleaded my case to Google I got no reply. I was willing to provide click logs and etc. But they just ignored me. I guess it's cheaper to just cancel accounts who are suspected of click-fraud then actually investigate. But if all it takes is a few malicious users with some scripting knowledge and open proxies to ruin my revenue why should I as a publisher use Google Adsense?

script kiddie

It's fraud if you sit at the computer and repeatedly click on the ad or -- better yet -- write a computer program that repeatedly clicks on the ad.
Perl hackers! Forwaaaard!

cost-per-action fraud

It seems that cost-per-action fraud could be a bigger issue than the existing fraud unless google is very careful. I can see people creating sites that have an action of buying some product, but make their money off of advertisements. They only pay google if someone buys there product; however, these sights would also make money by plastering ads all over their site. This matters to me because these sites would have little incentive in making a good site to sell the product I searched for.

Slashdot the click-fraud advertisers!

Don't like google's approach? Think they should ignore the whole issue of "click fraud"? Slashdot the click-fraud advertisers! Here's how it works: 1. Search in google for "google click fraud site:slashdot.org" [google.com] 2. Click on all the advertisers 3. ???? 4. The advertisers PROFIT and eventually realize that click fraud is GOOD!

Not a good thing for Google

This isn't a good thing for Google. It turns the fraud situation on it's head. Having written software to try and do it, let me tell you it's hard to tie a sale back to an advertisement impression and/or click-through. Most of the ways involve either trusting the guy who'll be paying, depending on cookies to persist or maintaining a lot of server-side state to track an individual over the long term. The only case that's simple is where the viewer clicks on the ad and then performs the action in the same browsing session without ever leaving the site. Even if advertisers don't set out to defraud Google a lot of payments are going to drop through the cracks simply due to the normal things people do to avoid being tracked, or simply because the connection got lost because of the passage of time. If someone's setting out to defraud Google, it gets a lot worse really fast.

Google Needs to Shape Up

I had my account banned for click through fraud, I did nothing. I wasn't bringing in much revenue at all, however I've heard from others that they've experienced the same thing.

Google really needs to fix their fraud-detection systems, and this idea isn't going to fly with most people. Either put up with a certain percentage of fraud, or risk banning those who don't deserve it ... Damned if they do, damned if they don't.

This is a strange solution...

Advertising is not just about a sale that day, advertising is used sometimes to create awareness of a product or brand, that may lead to sales down the road, making up your mind for you without you even knowing it. Could you imagine if TV advertisers didn't get paid unless you purchased a product or did some survey with your remote after each commercial?

I guess I'm glad I am not a GOOG shareholder because this seems like folly to me.

This goes too far the other way

So let me get this straight we've gone from the "please click on my links so I can make money" model to "i get free advertising if you're an indecisive consumer". The problem I see is that if I happen to see an ad for a product I'm interested in I may click the link, checkout the web site, check out a few more similar sites, mull it over for a night then possibly buy something. T

his all works properly as long as I use the same PC to make the actual purchase and don't have all cookies set to be session cookies. Otherwise if I do have cookies set to be session cookies or if I'm shopping at night and go in and end up making the purchase at work the advertiser has just gotten a free sale while the site that hosted the ad hasn't gotten a penny.

I hope Google can figure out a way to center the balance because if I can figure out this scheme I'm sure someone more devious can come up with one much much better.

Maybe a convenient push for GooglePay?

1. Pursuade existing Google advertisers to use GooglePay so transactions can be monitored and click-fraud prevented.
2. ???
3. Profit!

CPA only works when there's a trackable action

CPA only works when there's a trackable action... and in many cases, the trackable action is going to be impossible to define. For example, I launched a new site in July (geochecker.com), which is a free geocaching-related site, supported by Google Adsense ads, and doesn't sell anything. To get some initial traffic, I used my existing Adwords account to run ads on related search terms. Now, since my only monetizing product is advertising (from Google itself!), and the services the site offers are free, how on earth can there be any action? As a matter of fact, the very "action" that I'm trying to get IS a click - I want them to visit the site. I don't have anything to sell beyond that, other than possibly deciding they don't really want to be there and leaving thru a similar click on the Adsense links. I just need to build traffic above the breakeven critical mass. Beyond that, I don't care what happens to any "conversion".

(And given the economy of Google ads, I'm basically paying about 50% of the Adwords cost because I get about a 1% click-in, and about 1% click-out, and the Adsense click-out pays about half of what an Adwords click-in costs me. So obviously I can't use Adwords long-term, but it's okay for building initial traffic, and incidentally for making sure my site got quickly indexed - thanks to daily visits by the Adwords robot.)

Now, in that model, as with many other businesses who are not selling online, it becomes impossible to track CPA, and the CPC is really the only valid business model. And this is true of millions of link-farm sites (not that I'd mind most of THEM disappearing).

As others have mentioned above, advertising is about much more than simple action-tracking - if you put a favorable ad in front of a potential customer enough times, it will build brand awareness and eventually convert. But not in enough time to make CPA useful, and usually in ways that cannot be directly tracked anyway.

Sorry, but I think CPC is going to be around for quite some time. And I'm sure Google is well aware of these dynamics.

Impression ads

This model will fail for impression ads. And impression ads are important for a large number of products and services. For many things, from mundane things like consumer goods, to advanced business services, the products and services are not purchased or acted upon immediately. Impression ads just keep the name, logo image, or musical jingle, in the minds of the readers. In TV they call them viewers. In radio they call them listeners.

Obviously, in media like TV, radio, newspapers, and magazines, impression ads are about the only thing they can do. But they do work, else such media would be failing.

The web, of course, gives a new opportunity because it is, or can be, interactive. And advertisers like that because it can give them direct feedback, at least in some cases. Unfortunately, too many of them think that all their potential customers will drop everything they are doing and "buy now". The reality is, almost no one ever does "buy now". So despite the fact that the web does have the means to support interactive advertising, the model really isn't viable.

There's another reason web advertising needs to be impression based rather than interactive based. Unlike much other media, on the web, people tend to be focused on a goal, such as to access some particular information, or send some important family email. With these goals up front, they don't just drop everything to buy the latest cool product simply because one advertisement for it shows up. The few people who would, tend to be all out of money, anyway.

Google's model of Adsense where advertising is (supposedly) selected based predictions of what the readers tend to be interested in is a good one. If I tend to be interested in remote control model cars, for example, I will be often visited sites related to it, or maybe talking about it through Gmail or Google Groups. Showing ads for makers and sellers of model cars and related products and services certainly would have a higher likelihood of advertising success. It is ad dollars better spent than in showing things like feminine hygiene products to men.

But that doesn't mean I'm going to buy the product or obtain the service right then. That may come later. But when the time comes, enough impressions of a particular product, or keeping the name of a great online hobby store in front of me regularly, will go a long way towards influencing where I might visit first when I am ready to buy.

A couple months ago I saw an ad by Google for wickedlasers [wickedlasers.com]. I was busy at the time and went on about what I was doing. But I was done about half an hour later and remembered seeing the web site for wickedlasers [wickedlasers.com]. So I went and checked the place out and surveyed the lasers they had all the way up to the really nasty ones that can light cigarettes (but please, don't start smoking just because you can light up with a wickedlaser). I don't really need one of these right now. But I might in the fall. And I might buy one for a gift for a relative this coming holiday season.

That's how impression ads work. But will the original site I saw the ad on get credit for it and get paid? Since the ad was gone a half hour later, that's very doubtful. I just visited the site directly. When I'm ready to buy, I'll go directly there again.

One huge problem that could crop up with Google's cost-per-action model is that advertisers of products which work by impression only will have a free ride. They will get to make the impressions, but won't have to pay (very much) for the advertising because there won't be (much, if any) direct sales (even though they can certainly set up a web page to pretend it's possible). Think about it, if you see an ad (many times) for a new flavor of soft drink that happens to be a flavor you think you would like, would you click on the ad and make a purchase for a 6-pack of bottles to be shipped to you, or would you check the soft drink aisle the next time you ma

Stupid question

Please excuse the stupid question, but most Apache (and I think IIS, as well) can log the referrer's and the client's IP address. Would it really be that hard to place a cap on the number of clicks from the same pair of client IP / referrer IPs within a given period of time from which the AdSense bill is generated? I would think you could also drop on the floor anything from either an RFC-1918 [faqs.org] IP address or an address that matches the referring web server's address, as well.

I'm not real familiar with how AdSense works, since I've never run it on any of my web servers, but I would expect that if a shady webmaster is engaging in click fraud then either:

1. He is using computers on different networks to click on the add, in which case there is a limited subset of hosts from which he can operate (home computer, business computer, wireless from the coffee shop, etc.);
2. The fraudulent clicks will come from a number of RFC-1918 addresses, and therefore must have originated from the webmaster's internal network (assuming that AdSense sends the IP address from which the shady webmaster's server saw the click);
3. The fraudulent clicks will come from a single public IP address from which the shady webmaster's internal network is NAT'ed (assuming that the AdSense client's web server logs the IP address of the computer from which the click was generated).

In the first and third cases, the cap on clicks per unit of time from a single IP address will serve to reduce (but admittedly, not eliminate) click fraud. In the second case, dropping RFC-1918 addresses on the floor will prevent fraud, since *only* the webmaster's internal network could possibly have accessed the server from private IP space.

Click Fraud down - Credit Card Fraud Up

Steal a credit card number, click on a Google CPA advert, and buy lots of expensive things.

The profit is in the percentage the advertising website gets, not in the goods.

Wait... what's going on ?

$$$$$$$$$$$$ $ 0 ... Well it was going until it was over.

Does this indict the adwords advertising model?

Isn't this simply fraud protection against cheaters? Other advertiser's value isn't affected, because those clicks/impressions are real. Only the scammers are getting fake clicks.

I manage AdWords clients

and I suspect it could be a boon for Google. If I really knew what our ROIs were going to be, a predictable ad cost per verified lead (or an immediate sale for some type of products), I would look more deeply into the budgeting and margins and probably pay more for it. It tightens things up a bit, removes an element of the gamble in your game. I don't know that I've had any problems with click-fraud, but I do understand that most of it is for pricier products. Fewer sales garnered through expensive ad bids - It becomes worthwhile for lowlife competitors and jilted lovers.

Changing the business model rather than the law...

Change the rules of the game so that click fraud doesn't matter.

I applaud google for trying out different systems in order to eliminate a weakness in their business model. This is the right way to do things.

More companies should take note of their approach. In particular, the recording and motion picture industry needs to pay attention to this. If you have a business model that just won't work anymore because of advances in technology, the ethical thing to do is to change your model rather than change the laws and using our society's police and courts to keep your profits flowing.

It is not just ethics either - it is good business sense. In the long term, business models that only continue to work through the suppression of new models that might one day replace it are doomed to failure.

Google will continue to be a major player precisely because they adopt this sort of approach, not despite it.

M

Some ways...

How advertising effect can be measured?

There are some ways:
1. Views of ads.
2. Clicks on ads.
3. Actions.

The first one still alive. Even if you do not click on the ads, you may read it and it may have effect of "reminder" or "positive opinion building".

Second: you will have visitor. Even if your visitor will not do any action, he may click on ads on YOUR site, tell somebody about your site or return later to do any action.

Third does not require explanations.

So, what will be most logical scheme for payment?

Payment = Vp * Vc + Cp * Cc + Ap * Ac

Vp - price of one viewing of ads (e.g. $0.0001)
Vc - count of ads viewing.
Cp - price of one click on ads (e.g. $0.1)
Cc - count of clicks.
Ap - price of one action (e.g. $5.0)
Ac - count of actions from ads.

Surely the this is tied

into google's gcash thingie they've just wheeled out.
You'll click an advert, buy a product, go to the checkout and pay via the gcash (I've forgotten the name and can't be bothered looking). Google will know you clicked the advert and they'll know precisely how much you paid and can take their % off before the vendor even gets his money.
In fact it allows for a new model from google. The vendor doesn't pay for the adverts at all, they agree a percentage of the sale price they'll give to google. Google can then decide which adverts to place where entirely based on how much revenue they'll make - e.g. if you have a site that is reviewing a piece of hardware, google can work out if it's better for them to link the site that offers the lower price and pays a lower % or higher price with higher % (i.e. lower volume, higher margin)

Re:why do they care?

Perhaps because Google's customers care?

Re:why do they care?

> Why does Google care so much? They get more money when people abuse it. Just charge less per click
> if they're that concerned about it.

Because most people *don't* cheat, which means that Google would be making less money from everyone because of a tiny amount of fraud.

I like to think, though, that I've helped cause this problem by right clicking/open in new tab on ads I have no interest in. I also fill in questionaires with random answers if I have to complete them to proceed into an otherwise "free" website, though, so I'm not sure how long this proposed solution is going to do any good...

Re:why do they care?

But if people abuse it, the adversiters will find less value on Google ads.
They are trying to protect the value of their product.

Re:why do they care?

You've got that backwards. When you host Google AdSense ads, Google pays you for each click. Thus, they lose money when people abuse it.

Re:why do they care?

It's not that simple. Google is a middle-man, they're not creating the ads. Joes Pizza shop pays Google to display their ad when certain keywords are found on a web-page. They pay different rates for different words, and they pay by the number of times their ad is displayed.

Click-fraud hurts Joes Pizza because hey's paying Google to show his ad to potential customers, but during click-fraud, no-one is actually seeing it. He's paying for nothing. Google just takes a cut of what Joe paid, and passes the rest on to the websites that actually displayed the ads (or claimed they did).

Google only cares about this because if Joe thinks he's paying for nothing (i.e. no real people are actually seeing his ads, and all the "clicks" he's charged for are actually fraud), he might stop paying Google to farm out his ads. If that happens, Google loses their revenue stream.

Lots of clicks are good for Google, they get to charge Joes Pizza more. But they're only good if Joe thinks he's getting his message out to lots of people.

Re:why do they care?

Fraud results in distrust by advertisers. Many advertisers ignore adsense because of the high level of fraud. They don't want to pay for something that brings no sales. With enough fraud this whole business model disappears.

Re:why do they care?

For the past few years we have had ads running on adsense... 2 weeks ago, we decided we would rather lose the sales that adsense was bringing in than continue to pay google for ads that weren't generating enough revenue.

For comparison, our conversion rates:

Google Search: 3.5%
Google adsense: 0.25%

I don't know what other companies are doing.. but I wouldn't be surprised companies are considering dropping adsense. There is just to much fraud.

Re:why do they care?

1.) Because their company's culture is geared towards providing the best user experiences it can and that whole "Don't be evil." bit.

2.) Even if you think all of that's a crock, Google will make more money selling online advertising if they aren't continually making ~$90 million or so click fraud settlements periodically . . .

Re:why do they care?

You obviously missed the part in the article about Google facing multiple lawsuits then.

Re:why do they care?

Because an advertiser won't pay if they think they aren't getting value for their money. They'll go someplace where they are getting value for their money.

Charge less works for a while, but the price per-click is already so low it's hardly worth mentioning in many cases. You need to charge for something that is of actual value to the advertisers.

Re:why do they care?

In response to my own post, I was so intent on getting FP that I didn't think through what I was typing. (How's that for an excuse?)

Re:why do they care?

Because it diminishes the value of their primary source of income - selling advertising. Everything else Google does is to provide them with more places for them to put up ads.

Google isn't the only game in town and they know this. If Google can provide some assurance that every click on an ad is a real person, advertising with Google suddenly becomes much more valuable than advertising with another company that can't provide that assurance.

Re:why do they care?

Are you kidding? My company has about 2MM in sales annually, and we spend almost $500,000 a year on Google Adwords. Over 90% 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 GOOG.

Re:why do they care?

Don't.
Be.
Evil.

Re:why do they care?

Because if they don't start cracking down at some point (customers have been complaining about click fraud for eons) then their customers will use competitors who do work on fighting these scams.

I hope this also applies to the "please click on my ads" blogs.

Re:But I like click fraud!

Here's a hint:

If Google loses advertisers, they lose advertising revenue. If Google loses advertising revenue, Google goes bye-bye.