Google, Others Face Click Fraud Charges

[Michigan Mortgage]

Here is an Article I found - I thought is was pretty interesting.

TEXARKANA, Ark. — After more than a year of rumor and speculation on message boards and in the online press, news broke Tuesday of a class action lawsuit accusing search engines Google and Yahoo as well as several other web companies of click fraud.
Led by retailer Lane’s Gifts & Collectibles, the plaintiffs allege that they have been overpaying for advertising due to illegitimate hits on their links and banners and that search sites were aware of the problem but continued to overcharge them.

The suit names as defendants Google, Yahoo, Ask Jeeves, Time Warner (AOL), Walt Disney, Ask Jeeves, Daum Communications (Lycos), LookSmart and FindWhat.

Online merchants have quietly complained for some time that bogus click stats cost them tens of thousands of dollars each year, but fear of blacklisting by major search engines have prevented them from going public about the issue or pursuing compensation.

In March, CNet News ran a story about a Search Engine Strategies conference in which audience members sheepishly admitted to losing as much as $300,000 paying for thousands of clicks with almost no conversions.

“This fraud is part of doing business, because if you start suing these search engines, they'll cut off your traffic,” one audience member said.

With sponsored link fees running anywhere from 50 cents to $10 per click, analysts say the industry is ripe for fraud.

John Squire, product marketing vice president at web analytics firm Coremetrics, estimated that his company's clients, which include online merchants such as Eddie Bauer, OfficeMax and CompUSA, were spending about $10 million a year on fraudulent clicks.

“It's a billion-dollar problem,” said Tom McGovern, president of search engine Snap.com.

Click stats can be inflated in several ways, from simply clicking on the same ad or link repeatedly to using sophisticated bots to automate the clicking. A Wall Street Journal article on the subject said industry experts estimate that fraud is responsible for as much as 20 percent of all clicks.

In cases that have been successfully traced back to the source of the fraudulent activity, perpetrators are most often found to be either companies seeking to eat into a competitor’s pay-per-click ad budget or, less frequently, search engine ad affiliates hoping to boost their payout.

Either way, merchants end up paying more than they should, with little return on their investment. And now, they want search companies to be held liable for the fraudulent charges.

However, most search engines claim to have antifraud mechanisms in place and to issue refunds whenever they find evidence of artificially exaggerated click results.

None of the companies named as defendants in the suit have issued public comments, but AskJeeves stated in a public filing last month that it intends to defend the lawsuit vigorously.

Also, in a recent quarterly report, Google admitted that click fraud is a problem on the site but said it reimburses victims for lost revenues.

[kensmith]

The charges should be pointed at those that click just to run up the bills of their competition.

Lawyers will sue for anything and they will be the ONLY ones that make any money from this suit.

[Blagger]

Thanks for showing the article.

I think it's pretty stupid to bring action against theses search engines, especially aol and ask jeeves who basically just show the ads past over from google.

Fraud is evident in most industries, and companies usually budget fraud into their costs, why should this be different? It is down to the people who do the fraudulent clicking, not the search engines.

[2savvy]

Hmmmmm
Google admitted that click fraud is a problem on the site but said it reimburses victims for lost revenues.

========== I would ASSume that the victims would have to be Savvy enough to know they are victims.. So would that cut the number by 50%?!? More like 80% wouldn't have a clue they are indeed victims======================

[SkiRE]

This is just reinforcement that google will never be able to use the click thru part of thier new patent :

15. The method of claim 1, wherein the one or more types of history data includes information relating to how often the document is selected when the document is included in a set of search results; and wherein the generating a score includes: determining an extent to which the document is selected over time when the document is included in a set of search results, and scoring the document based, at least in part, on the extent to which the document is selected over time when the document is included in the set of search results.

16. The method of claim 15, wherein the scoring the document includes assigning a higher score to the document when the document is selected more often than other documents in the set of search results over a time period.

This could be easily manipulated in the same way click fraud is. We noticed a huge increase in clicks to our adwords ads when we decided to be included in the adwords networks...appearing on other sites that sponsor adsense. These were all bogus clicks all from the same IP C block in the Netherlands. We have stopped the inclusion of our ads in the ad network and things have come back to normal. The worst thing about it was that we had to prove to google that the clicks were false....that meant pouring over logs and trying to find strange patterns...it took weeks!

[Robert]

This problem has been going on for over 3 years. Our company has received fradulent paybacks from Overture and FindWhat each of the last 3 years. I asked my boss how much the total was for the last 3 years and he wouldn't say, but he did mention that it was enough to buy a second home on the beach. So I'm guessing several hundred thousand.

[SanDiego]

I've got that beach home for him when ever he is ready to buy -25% referral for you! lol..

as for click fraud, i've been preaching it for a while now, glad to see something like this actually come out into public and wake a few people up.... (hopefully)

PS, With some fof the kids I've met (supa computer genius kids) they can re-spoof IPSs and click all day and night and google would never catch them...
which is exactly why I stoped PPC a long time ago...

[2savvy]

lol supa computer genius "kids" can you say wifi...

[Robert]

There is also an article in yesterday's Wall Street Journal that talks about those exact programs that spoof IP's and relentlessly hit PPC advertisers. Check it out if you have an online subscription.

[SanDiego]

lol supa computer genius "kids" can you say wifi...

I just meant they are supa computer genius kids cause of Everything they can do... not just Ip spoofs, but hey, we'll leave it at that...

So now with the wall street journal talking about it, I wonder if more people are going to commite it.