I am not an attorney. I just want to point that out.
There’s big news today about Google settling their
Google Inc. has agreed to pay up to $90 million to settle a lawsuit alleging the online search engine leader overcharged thousands of advertisers who paid for bogus sales referrals generated through a ruse known as “click fraud.”
Rather than paying the parties involved in the class action suit, Google will be giving advertisers a credit that can be used in future ads.
The lawsuit alleges that Google conspired with its advertisers to downplay the percentage of
SearchEngineWatch has the PDF of the complaint.
From the complaint:
Among the questions of law and fact common to the Class are:
- the pervasiveness of advertising “click fraud”
- the construction of the agreement between Google and the Class
- Google’s acts and/or omissions as alleged herein
- whether Google’s promotional and advertising materials for its “AdWords” program misrepresented and/or omitted material facts with respects to the pervasiveness of “click fraud”
- whether Google has taken adequate measures to prevent “click fraud”
- whether Google has properly accounted and for and refunded fees it has wrongfully collected from identified victims of “click fraud”
So basically, here are the problems with click fraud:
1. Business rivals- competitors click on ads to drive up the cost of fees paid by their rivals. For example, if I run a web design company and a rival design firm advertises on Google, I could click on their ads, thereby costing them a few cents each click.
Since each advertiser has a daily maximum budget, a rival could click enough times that the advertiser’s daily limit would be reached. When that happens, the ad stops running for that day.
2. Placement Boost- Since the order in which an ad is positioned is determined by how popular that ad is, I could click on my own ad to move up in order. If my ad was in the fifth position for web design, I could click on my ad to boost its placement. Sure, clicking my own ad will cost me money, but it may be worth it to me if I can become the highest placed ad.
Placement Boost can also occur when a competitor (as in #1 above) runs through an advertiser’s daily budget. For example, let’s say my AdWords ad is in the #2 spot. I could keep clicking on the ad in the #1 spot until their daily budget is reached. When that happens, my ad would move up to the number one spot.
Example:
Before:
After
[By the way, I didn't actually do this. I just used Photoshop]
3. AdSense- This is the big one.
On my blog, I use Yahoo ads, but the idea is the same. When a reader clicks on one of the ads, I get a couple of cents, Yahoo ads gets a couple of sense, and the advertiser is charged. If I was evil, I could just click on these ads all day to make money for myself. Or, I could have someone else do it for me. Since Google/Yahoo can monitor this kind of activity, they could easily figure out my scheme and cancel my account. But if I were clever, I’m sure I could find a way to beat the system. And there are lots of people out there doing just that.
And this really gets advertisers angry. What good is it to have traffic to their site when the visitor couldn’t care less about what they’re trying to sell?
Some people code bots to click on the ads over and over. Bots definitely don’t buy what advertisers are trying to sell.
To me, the AdSense problem is the easiest problem to solve. First, advertisers can choose to have their ads only display on Google. That way, their ads won’t show up on blogs or other sites, eliminating the motivation for publishers to click ads to make money for themselves.
Secondly, Google can set click limits. For instance, if Google sees that an ad is being clicked every second, there’s a pretty good chance that a bot is hitting it.
Google could also identify the user clicking on the ad, and in doing so, could only charge the advertiser once regardless of how many times that user clicks on the ad. Sure, there are ways around this. The user could disable cookies, switch IP addresses, etc., but doing so at least reduces the amount of click fraud. More importantly, it makes it more difficult for an unscrupulous clicker to defraud advertisers.
Though I’m not sure how to implement it, I think that there’s at least a partial solution. Advertisers would put a piece of code (probably JavaScript) on their landing page. The code would either drop a cookie or initiate a session identifying the visitor. It would transmit this information back to Google. If the visitor is a bot, the code would not be executed, thereby nullifying the click conversion. If the visitor comes to the page multiple times, the advertiser is still only charged once.
This would make it very difficult and annoying for scammers. In the cookie example, the visitor would have to delete their cookies each time they wanted to click on the ad, then they would have to change their IP. If Google and the advertiser were using session variables, the visitor would have to shut down their browser and restart it each time. This would be a huge, time consuming hassle. And that’s the best way (for now) to combat this kind of fraud.
Though there’s no perfect way to programmatically end click fraud right now, it’s possible to make click fraud extremely cumbersome and annoying to accomplish. Since 99% of Google’s revenue comes from advertising, I think they should do as much as possible to make click fraud a process that just isn’t worth the effort.
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