Search Companies Team Up Against Click Fraud

isabotage3 writes to tell us that the top three search companies, Google, Microsoft, and Yahoo, have teamed up to create an alliance to combat click fraud. The fact that these three bitter rivals can team up shows just how serious the industry has become about preserving the current online advertising boom that is currently underway. From the article: "Click fraud has attracted an increasing amount of attention amid class-action lawsuits and industry studies asserting advertisers have been collectively overcharged by more than $1 billion for bogus sales leads during the past four years. Google and Yahoo contend that those estimates are gross exaggerations generated by opportunistic lawyers and online advertising consultants hoping to cash in on the anxieties triggered by their calculations."

"True Intent"

"In some cases, the true intent of a click can be identified only after examining deep psychological processes, subtle nuances of human behavior and other considerations in the mind of the clicking person," wrote Alexander Tuzhilin in a 47-page report submitted last month to an Arkansas state court.

...or you could simply check if the visitor clicked a few times (and purchased the item or not), or clicked a billion times.

47 pages. Looks like someone is trying to justify his cultural studies degree.

Redundancy...

....gross exaggerations generated by opportunistic lawyers and online advertising consultants hoping to cash in on the anxieties triggered by their calculations"

I can't put my finger on it, but that sentence seems to have a lot of redundancy built into it.

...An obvious solution

Have users register before they can view ads.

The last line of TFA

...says it all:

The attorneys who filed the suit will share $30 million.

These companies

Can work together even though there's no love lost between them. Slashdot on the other hand has to persist with its juvenile logos.

Click fraud? errr...

Click fraud? What's clicking? I can't recall the last time I saw a banner ad worth clicking on.

Logging IP Addresses

Ok, I don't know exactly how the advertisers track their click throughs, but wouldn't they notice if someone got 10, 100,1,000, etc... click throughs from one or a few IP addresses? It would take some really sophisticated worm/malware to get that many machines these days to do that kind of fraud.

Yes? No? Someone who's in this business educate us, please.

Odd thing to measure anyhow

If you read the article, one of the things they say is how hard it is to determine the "intent" of the person clicking the ad. Are they serious shoppers, casual browsers, or even one of those teenagers who sign up for those click-for-profit type schemes. Well duh! Of course you can never know this. To me it's all quite silly. The point of online advertising is the same as the point of any other advertising medium - drive up sales (or, notoriety). And that information is readily available to the client companies. They know what their ad budget is and they know what their sales are (and polls tell them what their notioriety is). In the end they should have enough data to make their own determinations as to how valuable online ads are to them, and then they should pay accordingly. I know this is all easier said than done when the prefered pricing model seems to be click-based. But, at some point the numbers should tell the story, and if it means the online ads aren't worth what they are costing, then spend they should reallocate their ad dollars elsewhere. Eventually the pricing will align with value.

Re:Odd thing to measure anyhow

If you read the article, one of the things they say is how hard it is to determine the "intent" of the person clicking the ad. Are they serious shoppers, casual browsers, or even one of those teenagers who sign up for those click-for-profit type schemes. Well duh!

I often find myself clicking on many links for sites I dislike, knowing that each click is costing them money; just 'cause I feel like it :-/

Also, opening a page in a Firefox tab, and closing the tab (without viewing it), is also a pretty nice way to run up costs for some sites. And if thousands of people do this per day...

It's a silly business model these advertisers have.

Bogus leads?

advertisers have been collectively overcharged by more than $1 billion for bogus sales leads during the past four years.

Then maybe those advertisers should think before they agree to be advertised on those get a free ipod sites. I mean seriously who doesn't cancel those agreements as soon as you sign up for them. I wouldn't pay these people a nickle if I was an advertiser, yet they make enough to cover the cost of free ipods or free laptops even.

And again

And again, Ms will team up with google. The next step, I guess, will be that they'll get mad at each other again [slashdot.org]

Removing Click Fraud

The best way to stop click fraud is to stop using the system.

Spend Here, or Spend There.

The primary concern about "click-fraud" is that you're being charged for clicks that were meant to intentionally drive your costs up. In essence this means wasting money, since you can't really track who meant to click and who didn't. This adds up to tens of thousands of dollars very quickly.

The irony is that many of the companies that are uncomfortable with this medium for advertising is that they're perfectly willing to spend millions on TV and print advertising where they can't even reliably track anything. And worse, they have to hope the people that actually give a damn about their product or service are even in the market. I don't know about you, but I get my drink, go to the bathroom, and pop popcorn during commercials. With online advertising -- especially on search engines -- people only see your commercials [ads] because they were looking for something related. (I could go on a tangent here about how a clothing company will bid on keywords related to automobiles... maybe later.)

Having worked in the online advertising/marketing industry (tech sector) for over 2 years now, this problem is not easily solved. The fraudsters know all about proxies, onion routing, and a host of other tricks to drive up the costs of competitors. Then, there are those that simply think it's clever to generate traffic (on IRC we called them spammers, floodbots, etc.).

We provide our clients with click-fraud reporting using our algorithms. They're pretty accurate. But, this accuracy is based on a model, which is based on 50% hard data, and 50% conjecture. What's missing with our reporting is that Google, Yahoo!, and MSN don't give it any weight, and frankly dismiss it.

I'm hopeful that this "coming together" will help client confidence so they can move away from [nearly] untrackable advertising on TV, print, and radio. It all starts with "the big 3" -- if they're willing to assist, it's much better than a 3rd party trying to decipher 3rd party results and then have to prove it to "the big 3."

Pay-per-click isn't the only way

The irony is that many of the companies that are uncomfortable with this medium for advertising is that they're perfectly willing to spend millions on TV and print advertising where they can't even reliably track anything.

Woah there! You had it right in the first paragraph when you said that the problem was "being charged for clicks that were meant to intentionally drive your costs up". Now all of a sudden you're on a completely different subject: the question of whether you can measure viewer response to the ad. If you sign up for a traditional TV, print, or radio ad, you can only estimate your response rate based on market research, but you know exactly what your outgoing costs are. With pay-per-click web ads, the situation is pretty much the other way around: you get good data about user activity, but your costs can only be estimated, and are subject to escalation by fraud.

But pay-per-click isn't the only revenue model out there. Pay-per-impression is considerably less prone to fraud (it can't be easily targeted if ads are randomised), and pay-per-day returns costs to the known-in-advance state. Both of these still allow tracking of user activity.

As a small-time ad-space provider, I'd far rather be hosting this kind of fraud-proof ad. That way the ad-broker can't arbitrarily accuse me of click fraud and suspend my account. It hasn't happened to me, personally, but I'm acutely aware that it could happen at any time without notice, and this precludes me from even considering it as a reliable source of income.

Dedicated products/service to reduce click fraud

Came across this company pushing their "Clickrisk" solution to combat fraud of this type while reading the 360is Security Newsletter. here. Its under the Successful Operations section. Extract: Click fraud is expected to reach $1.1B for 2005. By 2008, this is estimated to grow to $1.6B, an increase of over 45%. (Source: Clickrisk).

Not So Difficult

Click fraud detection is not so difficult. You don't have to examine "...deep psychological processes, subtle nuances of human behavior and other considerations in the mind of the clicking person..." That's just a bunch of academic navel-gazing.

All you have to do is focus on the publishers who are profiting from click fraud. If a no-name site is getting a disproportionate amount of click traffic, then you know something is wrong. And it's only the no-name sites that commit click fraud. Large, well established websites have nothing to gain by click fraud.

Google's problem is that they do not screen their publishers. Screening would actually cost money, and would also limit their click revenue. So they let any sleazebag with a website sign up for their pay-per-click programs. That's why they have so much click fraud.

Don't forget their other approach

It's impressive that these rivals have banded together to address click-fraud, but don't forget that Google has other tricks up its corporate sleeves. As seen here a little while back, they are also looking into "cost per action" ads [betanews.com], which would eliminate the fraud unless the action itself could be performed in a fraudulent manner. (Bruce Schneier mentioned it in a commentary [schneier.com] about click fraud.)

Pardon the idiotically obvious answer...

...but someone please explain why these marketing genuises are complaining about the tribulations of their "pay per click" commission structure?

That just sounds like a moronic compensation paradigm to me. Here's a novel idea: how about you implement a "pay per transaction" model? Instead of paying chump change for each (probably) meaningless click, offer nothing for them but provide a more sustantial payout for clicks that actually result in a purchase! Yes, I'm aware there are technological issues around associating referral identifiers that far through the transaction cycle...but surely these would be cheaper/easier to address than the legal bullshit involved in attempting to devise some codifiable standard for ascertaining "clicker intent."


Just don't be surprised when you get sued by the RSAA [Retail Sales Associates Association] for infringing on their trademarked commission model.

Gotta love laywers...

...they always have their client's best interest at heart. For example from TFA:

"Tuzhilin was hired to do the study as part of just-approved class-action settlement requiring Google to offer advertisers up to $60 million in refunds. That amount translates into less than 40 cents for every $100 that advertisers have paid Google since 2001. The attorneys who filed the suit will share $30 million."

So if I spent a whopping $100,000 of my annual advertising budget on Google over the last 6 years, I could expect to see a whole $2,400 back. Of course, I don't mind that the people who made my windfall possible made $30 Million... I got $2,400 of my $600,000 I paid Google!

What is this click fraud???

What are these ads that people are clicking on? I haven't seen one for a very long time now...

Thank you adblock and adblock filterset.g and me blocking that google script. Life is much better without that crap anyway.

^_^

Search Engine Companies remind me of addicts ..

Vigorously defending their irrational actions and behavior while loudly denegrating and disparaging their critics over evidence any sane, straight, clean and sober observer would immediately recognize.

Owning up to the issue honestly would be the better approach than demonstrating your desparation by denying it.

Is profit an addictve substance for corporations?
If so, maybe it sould be outlawed. Like herion is.

Oh boo fucking hoo

You mean the people who are constantly looking for ways to ruin my browsing experience with a never-ending parade of Flash ads, pop-up windows and gigantic CSS floating DIVs might be getting overcharged? Excuse me for not feeling sorry for them. Now where's that World's Smallest Violin?

Google gives you click fraud stats

I haven't seen this posted yet, but recently Google started displaying the number of clicks that they consider fraudulent. You can read more about it in the Adwords blog here https://adwords.google.com/support/bin/answer.py?a nswer=44008 [google.com]

As a potential advertiser, this is keeping me out

After decades building small growth companies in the software industry, I'm now building another start-up in a different high-technology area. Search based advertising would be IDEAL for our market, and our start-up company size. But the threat of click-fraud keeps us out. Here's why.

Google's CEO Eric Schmidt said about click fraud is that "there is a perfect economic solution which is to let it happen.". The idea is that the price of advertising would eventually settle to an equilibirum, discounting the average rate of click fraud. E.g., if half the clicks were fraudlent, advertisers would be willing to pay half the rate, etc.

This is a good argument, but it is fatally flawed, because there is not a steady average rate of click fraud. It might be true if the only kind of click fraud was scammers trying to drive up their own ad display revenue. This type of fraud could even out to some average, which is easily accounted for by an average discount.

However, the bigger threat is targeted click fraud -- a competitor trying to drive up my costs, or a click-farmer just happening to post ad pages focusing on my market.

These targeted attacks could easily kill us overnight, by turning 10K budget into a $100K bill, or by depleting a capped budget and taking my ads 'off the air'. Either way, it is a complete waste. Worse, this waste is completely unpredictable, I might enjoy low rates and good business, or I might be shot; it is really like Russian Roulette.

This tunable targeted ad model has awsome potential for small startup companies, where the broad image/impression advertising campaigns of major brands make no sense for them. Sadly, the click-fraud seriously poisons the well. You can see it in Google's ad revenues starting to flatten last quarter [google.com].

If Google actually solves the click-fraud problem, I'll not only use AdSense, I'll also buy their stock. I expect that many others will also start using it once it can be trusted, and their revenue will grow prodigiously. Until that, I'm using other methods.

Isn't the cost already established?

I don't support click fraud doers, but I think there are two things you should keep in mind:
1) Nobody is oblidged to advertise on the Internet, let alone AdWords.
2) You as an Internet user have not signed anything that prevents you from clicking on ads as long and as hard as you want to.

That said, don't you think that Google has already calculated in the price of the ads the click-fraud money. I mean, if you know that 1% of the money are going to be stolen this way, you just calculate it in the price. If the cost is too high - don't do it!

Moreover, I am sure they have contracts with the sites they can terminate when they feel a click-fraud is being commited.

I really believe these studies and alliances and stuff is just so the advertisers can get a warm fuzzy feeling of being listened to. That is ALL Google can do for them, take it or leave it. Yes, and to terminate a contract or two.

It seems that...

It seems that worrying about Click Fraud is a waste of time. Why don't the advertisers work fraud into their bids? Google could state that they only garuntee that 75% of all clicks are legit. Also, perhaps Google could switch to a more objective pricing scheme? For example, instead of paying on a per-click model, why not auction blocks of time?

emperors new revenue model

sadly I suspect that, once the numbers are done on ROI, the $ for click through model will wither. Probably end up being eyeballs and actions (I pay you to run my banner and/or I pay you when someone actually spends the money)

Too bad as clicks make lowend blogging a minimum wage job - almost.

mod redundant - I just felt like posting ...

No-Click Fraud is the opposite

Next time you see an ad for something you are interested in, instead of clicking on the ad to visit the site, just open a new window/tab and type the URL in. Now no one gets paid. Is that fraud, too? If intentional, it sure is.

This is also abusable by advertisers themselves. If they are trying to drive up web site visits, they make sure the site URL is in the ad so people will remember it and visit later (knowing that most people won't drop everything they are doing to visit right now). If they sell products away from the web (e.g. Pepsi and Coca-Cola selling drinks in stores and other places), all they need to do is build traditional impression based advertising. Almost no one will click (unless trying to do the fraud thing) and these advertisers get a free right, and the intermediary (Google, etc) and publisher (that might be you) get screwed putting up "click through" ads that are never going to be clicked on.

What we need is impression based advertising. And that's already exactly what they do on TV, radio, and bilboard advertising. Newspaper and magazine advertising is mostly like that, but cut-out coupons do some level of feedback. But such feedback doesn't pay the agency or publisher anything.

The price per impression would obviously be way less than the price per click. Impression is very much subject to the "no look fraud". And unlike TV, which assumes a viewership based on ratings that affect the advertising prices, at least the web can provide a means to measure how many impressions actually take place. What the proportion should be, I can't reliably say. But I've seen ads at various companies go for from 0.5 cent to 25 cents per click, and what little impression ads are available typically going for 1/20 to 1/50 of that, in the range of 1 cent down to 0.01 cent.

One big problem is it's all abusable on the web, whereas on places like TV it's just not always accurate (maybe no one watched all of a given episode of a show). Impression ads can be abused, too. Who reports how many impressions were made (by hosting the images)? The publisher who could inflate the logs? An intermediary that might get blocked easily? The advertiser who could deflate the logs?

Re:Google's Own Fraud

Are you a retard? There are countless numbers of people with the same or similar experiences.

Just a small sampling [google.com].

It seems that if you don't follow the Google Groupthink around here then you get flamed.