SES Chicago - December 7-11, 2009

November 6, 2009

Click Forensics Unveils Online Audience Verification Platform for Shopping Engines

At ad:tech New York this week, Click Forensics unveiled a new online audience verification platform for comparison shopping search engines. The technology evaluates traffic to determine its value to merchant partners.

"Comparison shopping engines and other content aggregators need a simple way to optimize the money they spend on search engine marketing, while improving the quality of leads they send on to merchant partners," said Paul Pellman, CEO of Click Forensics. "The solution we're delivering does just that. To our knowledge, it's the only system available that provides the ability for content aggregators to manage traffic acquisition and traffic monetization in a single interface."

Features include:

  • High-Volume Campaign Support - measures the quality of tens of millions of clicks, which supports the increase in demand during high traffic seasons.
  • Real-Time Quality-based Filtering - prevents fraudulent and low-quality traffic from reaching merchants, which aids in optimizing ad spend.
  • API Integration - allows integration of the platform directly with existing internal reporting and billing systems.
  • Browser-based Reporting - enables viewing of traffic and audience quality statistics in a browser-based dashboard.

Ultimately, Click Forensics hopes their new platform will help shopping search engines maintain and grow their merchant partner base.

Posted by Nathania Johnson at 12:45 AM | Permalink | Comments (1)

October 30, 2009

Anchor Intelligence Reports Decline in Click Fraud, Identifies New Hotspots

Anchor Intelligence has released its click fraud report for the third quarter of 2009. It paints a different picture than the Click Forensics report that was recently released. Where Click Forensics saw an increase, Anchor Intelligence saw a decline.

Overall, click fraud was 23.2% in Q3, down 14.3% from 27.1% in the second quarter. Anchor Intelligence breaks its click fraud rates into two categories: attempted click fraud, the kind with evil intentions, and innocuous click fraud, like an accidental click. Attempted click fraud was 18.6% in Q3 down from 22.9% in Q2. Innocuous rates increased from 4.2% in Q2 to 4.6% in Q3.

Anchor Intelligence's data reports attempted click fraud, not billed click fraud. Their ClearMark for Traffic system integrates with ad networks and search engines and identifies fraudulent clicks before the advertiser is affected.

Egypt and Indonesia have emerged as leaders in click fraud rates - percentage-wise. Volume is still highest in the United States:

Anchor Intelligence says it did observe more sophisticated click fraud schemes in the third quarter, such as browser hijacking. They also saw an increase in the threats of malicious advertisements in paid search and ads on publisher websites.

Posted by Nathania Johnson at 9:37 AM | Permalink | Comments (0)

October 26, 2009

Botnets Drive Up Click Fraud Rate in Third Quarter 2009

Click Forensics has released its click fraud report for the third quarter of 2009. Botnet activity caused the rate to rise and accounted for more click fraud activity.

The click fraud rate rose to 14.1% in the third quarter, up from 12.7% in the second quarter, but down from 16% in the third quarter of 2008.

Botnets accounted for 42.6% of click fraud in Q3 2009, more than double the 27.5% rate in Q3 2008.

"The significant rise in botnet-generated click fraud lines up with recent findings of several well-known malware and online fraud tracking experts," said Paul Pellman, CEO of Click Forensics. "Botnets perpetrating click fraud and other online schemes continue to grow in number and sophistication. Advertisers and ad providers need to be especially vigilant about such activity as we enter the competitive search marketing holiday season."

Outside of North America, the countries producing the most click fraud were United Kingdom, Vietnam and Germany.

One of the most significant findings in the third quarter was the discovery of the "Bahama botnet," which was redirecting traffic through 200,000 parked domains located in the Bahamas. Click Forensics detected a link between the Bahama botnet and the New York Times ad scareware incident.

Posted by Nathania Johnson at 12:47 PM | Permalink | Comments (1)

September 29, 2009

Click Forensics Adds Real-Time Capabilities to Audience Quality Measurement Platform

Click Forensics is enhancing their audience quality measurement platform with real-time capabilities. Now, online publishers and ad networks can identify good and bad advertising traffic in real-time.

"In its simplest form, our real-time audience quality tracking capabilities make it possible for publishers and ad networks to immediately block bad site visitors from seeing ads, and show the right ads to the real buyers," said Paul Pellman, CEO of Click Forensics. "This instantaneous audience quality determination is an important step in transforming the results that search, display and social ad providers deliver to their clients."

The new capabilities were built with a RESTful web service API that integrates into existing high-volume ad network infrastructures. As a result, it takes less than 10 milliseconds for Click Forensics' platform can score requests and process requests. This means traffic quality can be determined before an advertiser is charged for a click.

All of this is also the basis for a new real-time scoring engine in development at Click Forensics. The scoring engine will help advertisers and publishers making decisions about ad-serving based on traffic quality.

Posted by Nathania Johnson at 11:04 AM | Permalink | Comments (1)

September 18, 2009

Click Forensics Warns About New Botnet

Click Forensics has noticed a new spike in click fraud traffic coming from they've dubbed the "Bahama botnet." The codename came about because the botnet was first detected redirecting traffic through 200,000 parked domains located in the Bahamas. Click Forensics has tracked instances where the Bahama botnet has affected up to 30% of an advertiser's monthly search marketing budget.

"During the past four years we've monitored billions of clicks for top search engines, ad networks, publishers and advertisers. This scheme is one of the most sophisticated we've seen," said Paul Pellman, CEO of Click Forensics. "The botnet is effectively disguising the fraud it produces as 'good traffic' by altering the interval and breadth of the attacks across legions of infected machines."

Click Forensics has found malware associated with the botnet in search results on Google for "Facebook Fan Check virus." The malware behaves similarly to the advertising malware that the New York Times fell prey to last weekend. The Times inadvertently sold advertising to a "scareware" program that encouraged consumers to download malware-checking software. The software itself was actually malware.

Today, one of our Search Engine Watch experts, Marc Poirier (co-founder and CMO of Acquisio), wrote an extensive piece on click fraud. Be sure to check it out.

Posted by Nathania Johnson at 4:55 PM | Permalink | Comments (1)

July 27, 2009

PPC Click Fraud Rate Drops to 12.7% in Q2 2009

Click Forensics has released data regarding pay-per-click (PPC) fraud for the second quarter of 2009. The news is good. Not only is click fraud down from the first quarter of 2009, it's down year-over-year as well.

This year's second quarter click fraud rate came in at 12.7%, which is an almost 8% decrease from the first quarter, which was 13.8%

The second quarter of 2008 came in at 16.2.%, which means Q2 2009 came in 22% lower than the year prior.

Click fraud did increase from certain programs and sources.

"The increased diligence of online ad networks to detect and block invalid traffic sources has contributed to the decline in the overall click fraud rate this quarter," said Tom Cuthbert, president of Click Forensics. "However, increasingly sophisticated attacks, such as publisher collusion fraud, continue to be a concern. Ad networks should pay close attention to such threats in the coming months."

Publisher collusion fraud is when publishers use things like botnets to click on ads on their own sites to generate income. This happens to ads on unprotected networks.

What do you think of the click fraud data for Q2 2009? Drop us a comment and let us know.

Posted by Nathania Johnson at 1:16 AM | Permalink | Comments (1)

June 16, 2009

Microsoft Files Click Fraud Suit in Washington State

Microsoft has filed a click fraud suit against brothers Eric and Gordon Lam and their mother Melanie Suen. The suit was filed in the Western District Court of Washington and involves click fraud pertaining to a scheme involving auto insurance and the video game World of Warcraft.

The adCenter blog offered up a visual representation of what click fraud looks like. The image below maps IP sources and the clusters indicate automated traffic. Normal traffic would be more evenly spread with a variety of IP sources hailing from throughout the Internet.

Posted by Nathania Johnson at 10:39 AM | Permalink | Comments (1)

May 8, 2009

Click Forensics Launches New Traffic Quality Management Platform

Click Forensics today unveiled a newly-architected version of its traffic quality management platform. Here's what to expect:

  • Click Forensics Site Score - Sources of traffic are tagged with individual Click Forensics Site Scores that rank visitors based on their propensity to convert. This allows ad networks to more effectively filter and route traffic for highest monetization and provide the best ROI for online advertisers.
  • Adaptive Intelligence - Accommodates varying traffic profiles among different ad networks, advertisers, and publishers. The new engine provides the capability to adjust rules and thresholds to produce traffic quality scores that better reflect propensity to convert for each specific client.
  • Machine Learning - the traffic scoring engine also employs new machine learning capabilities that allow it to adapt and tune itself in real-time to detect new sources of good and bad traffic as they emerge. Filtering decisions can be made instantly based on traffic quality thresholds set by clients.
  • Enhanced Anomaly Detection - more granular click anomaly detection features can distinguish new complex click types - machine or human - even from the same computer. This includes increasingly popular malicious Javascript programs that execute upon a page view or site visit. In addition, volume and spike anomalies can be more easily identified to protect from stealth attacks, such as those resulting from botnet activation.

"Monitoring and processing billions of clicks across the industry's top ad networks, online publishers, search engines and advertiser web sites means we have one of the best vantage points for identifying what does and doesn't work in online advertising," said Paul Pellman, CEO of Click Forensics. "Our new platform helps customers pinpoint and increase the flow of highly-convertible traffic in real-time, which ultimately improves the results of their online campaigns."

Related Reading: Click Fraud Increased Slightly in Q4 2008 Click Forensics Releases New Trademark Tracking Tool Lycos Partners with Click Forensics to Improve PPC Quality

Posted by Nathania Johnson at 2:45 PM | Permalink | Comments (0)

January 30, 2009

SEW Experts: Battling Click Fraud is Important for All Involved

Every pay-per-click advertiser sees the presence of click fraud, as does every search engine. We're just disagreeing about the numbers. In today's SEM Crossfire column, "Battling Click Fraud is Important for All Involved," Frank Watson and Chris Boggs remind us that both sides need to acknowledge that a certain level of click fraud exists, and work together to diminish its impact.

» Full story

Posted by Kevin Newcomb at 12:00 AM | Permalink | Comments (0)

January 28, 2009

Click Fraud Increased Slightly in Q4 2008

Click Forensics has released click fraud data for the fourth quarter of 2008. The click fraud rate grew slightly year-over-year. Here are the primary findings:

  • The overall industry average click fraud rate grew to 17.1 percent for Q4 2008. That’s up from 16.0 percent in Q3 2008 and from the 16.6 percent rate reported for Q4 2007.
  • The average click fraud rate of PPC advertisements appearing on search engine content networks, including Google AdSense and the Yahoo Publisher Network, was 28.2 percent. That’s up from the 27.1 percent rate reported for Q3 2008 and down slightly from the 28.3 percent rate reported for Q4 2007.
  • Traffic from botnets was responsible for 31.4 percent of all click fraud traffic in Q4 2008. That’s up from the 27.6 percent rate reported for Q3 2008 and the 22.0 percent rate reported for Q4 2007.
  • In Q4 2008, the greatest percentage of click fraud originating from countries outside the U.S. came from Canada (7.4 percent), Germany (3.0 percent) and China (2.3 percent).

“Based on the data we tracked in Q4 2008, it seems that the online advertising industry is not immune to the growing tide of cybercrime during this recessionary period,” said Tom Cuthbert, president of Click Forensics. “Both the overall click fraud rate and the rate of click fraud originating from botnets were the highest ever in Q4 2008. In addition, we’ve started to see old schemes like click farms reemerge. Advertisers should pay close attention to these types of threats in their online campaigns throughout the year.”

Related Reading Click Fraud: What It Is, How to Fight It Rounding Up the Usual Click Fraud Suspects Click Fraud Declines Slightly in Q2 2008 Q1 2008 Click Fraud Down from Last Quarter, Up from Last Year Click Fraud: Somebody Is Cheating You

Posted by Nathania Johnson at 12:04 PM | Permalink | Comments (1)

January 12, 2009

Rounding Up the Usual Click Fraud Suspects

In a new report by entitled "Anatomy of a Fraudster," Anchor Intelligence has identified the top four types of click fraud perpetrators. Their research is based on a year of studying traffic patterns and gathering intelligence across their client base.

The four types are:

  • Click fraud farmers – members of click farms, which are outsourced by an organization and paid to generate clicks on behalf of a third party.
  • Pyramid schemers – individuals who are caught up in illegal schemes, in which they are “paid” to click on ads, visit Web sites and recruit other users.
  • Money launderers – fraudsters who recruit consumers to use their personal information to register various websites with ad networks with intent to generate false clicks on ads hosted by their Web sites.
  • Kit sophisticates – fraudsters who purchase kits online to commit fraud. These kits often serve as a one-stop shop for click fraud perpetrators and provide tools to create hundreds of Web sites, mass register accounts and generate thousands of fraudulent ad clicks.

“Pinpointing the bad guys can be extremely difficult,” said Ken Miller, CEO of Anchor Intelligence. “Much like spammers, click fraud perpetrators have their methods for staying under the radar. Understanding the ‘how' and ‘why' behind their actions is essential to preventing their fraudulent activity.”

What do you think about the four types of click fraud perpetrators? Let us know in the comments.

Related Reading: Click Fraud Declines Slightly in Q2 2008 Q1 2008 Click Fraud Down from Last Quarter, Up from Last Year New Yahoo Feature Reports Number of Discarded Clicks Google Sued for Ad Fraud; Another Class Action Settlement?

Posted by Nathania Johnson at 11:20 AM | Permalink | Comments (6)

October 23, 2008

Click Fraud Declines Slightly in Q2 2008

Click Forensics has released click fraud data for the third quarter of 2008. Overall, click fraud declined slightly. And by slightly, I mean barely noticeable.

  • The overall industry average click fraud rate was 16.0% for Q3 2008, down from 16.2% reported for both Q2 2008 and Q3 2007.
  • The average click fraud rate of PPC advertisements on search engine content networks was 27.1 percent, down from 27.6% in Q2 2008 and 28.1% in Q3 2007.
  • Traffic from botnets was responsible for 27.6% of all click fraud traffic in Q3 2008, up from 25.2% for Q2 2008.
  • In Q3 2008, the greatest percentage of click fraud originating from countries outside North America came from Russia (4.9%), France (4.8%) and the U.K. (3.5%).

Click Forensics president Tom Cuthbert had this to say about the data:

For the past two quarters the industry average click fraud rates seem to be hovering around the 16 percent level. Gains are being made by advertisers taking more action to proactively filter out fraud before it affects online campaigns. However, the growth in click fraud traffic from botnets continues to rise and it should be one of the top areas advertisers and the industry should monitor closely.

Related Reading: Q1 2008 Click Fraud Down from Last Quarter, Up from Last Year Lycos Partners with Click Forensics to Improve PPC Quality Google, Yahoo Launch Click Fraud Resource Centers

Posted by Nathania Johnson at 11:16 AM | Permalink | Comments (0)

April 25, 2008

Q1 2008 Click Fraud Down from Last Quarter, Up from Last Year

Click Forensics has released data showing a decline in click fraud rates in the first quarter of 2008. The overall industry number came in at 16.3%, which is down 16.6% quarter-over-quarter but up 14.8% year-over-year.

Search engine content networks saw a higher average click fraud rate at 27.8%, which is down 28.3% from last quarter but, again, up from last year by 21.9%.

Botnet click fraud traffic was up 8% year-over-year.

Search engines are addressing the click fraud problem head on. Yahoo recently announced the provision of Click Filter Reports, which show advertisers the number of discarded clicks in their PPC campaign. The Sunnyvale search engine also announced a partnership with Click Forensics to address their click fraud woes. Lycos has announced a similar deal with Click Forensics.

Posted by Nathania Johnson at 11:45 AM | Permalink

January 3, 2008

Ask and LookSmart Send Out Click Fraud Settlement Letters

Seems Lane's Gifts are not the only ones getting money back from LookSmart and Ask for click fraud, letters were sent out yesterday for the class action suit that both companies are trying to put behind them.

Both seem to be written by the same law firm and were from the suit lodged in the Circuit Court of Miller County, Arkansas. LookSmart is dealing with the period between January 1, 2002 and the present; while Ask is covering claims beginning August 1, 2005, when it began licensing LookSmart's technology for its Ask Sponsored Listings product.

Claims must be filed to LookSmart by February 11, 2008 and to Ask by February 2, 2008.

Payment seems to be in advertising credits as opposed to cash. Guess if you have gotten out of the online business you could sell the credits.

Copies of the two letters are below.

LookSmart's letter read:

"If you purchased online advertising from LookSmart between January 1, 2002 and the present, you may be a class member in a class-action lawsuit, Lane's Gifts and Collectibles et al. v. LookSmart, Ltd. et al., Case No. CV-2005-52-1, in the Circuit Court of Miller County, Arkansas. The Settlement Notice informs you of the Court's certification of a class for settlement purposes; the nature of the claims alleged; your right to participate in, or exclude yourself from, the class; a proposed settlement; and how you can claim an award of advertising credits under the settlement or object to the settlement.

- The proposed settlement will provide advertising credits to class members who certify that they were the victims of "click fraud" or other invalid or improper clicks on online advertisements purchased from LookSmart on or after January 1, 2002.

- The proposed settlement will resolve claims that LookSmart breached its contracts with advertisers and violated other laws by failing to adequately detect and stop "click fraud" or other invalid or improper clicks on online advertisements.

- If you are a member of the class, your legal rights are affected by whether you act or do not act.

For a copy of the Settlement Notice, click on the link, or visit the case website at LooksmartSettlement.com

To file a claim for your award of advertising credits under the settlement, click on the following link: LooksmartSettlement.com/claim

Note: You should review the Settlement Notice as soon as possible as there are several important deadlines that you must meet to take certain actions in connection with this proposed settlement. As indicated above, your legal rights are affected whether you act or do not act. The deadline for filing an objection or excluding yourself from the proposed settlement is January 29, 2008, and the last day to file a claim under the proposed settlement is February 11, 2008. For further information, please refer to the Settlement Notice." The Ask letter reads:

"If you purchased online advertising from IAC Search & Media, Inc. and/or Ask Jeeves, Inc. (collectively "Ask") between August 1, 2005 and the present, you may be a class member in a class-action lawsuit, Lane's Gifts and Collectibles et al. v. Ask Jeeves, Inc. et al., Case No. CV-2005-52-1, in the Circuit Court of Miller County, Arkansas. This notice advises you of your legal rights.

You should review the detailed Settlement Notice as soon as possible, as there are several important deadlines that you must meet to take certain actions in connection with a proposed settlement of the class action lawsuit. Your legal rights are affected whether you act or do not act. The deadline for filing an objection or excluding yourself from the proposed settlement is February 2, 2008, and the last day to file a claim under the proposed settlement is February 2, 2008. For further information, please refer to the Settlement Notice.

The Settlement Notice informs you of the Court's certification of a class for settlement purposes; the nature of the claims alleged; your right to participate in, or exclude yourself from, the class; a proposed settlement; and how you can claim an award of advertising credits under the settlement or object to the settlement.

The proposed settlement will provide advertising credits to class members who certify that they were the victims of "click fraud" or other invalid or improper clicks on online advertisements purchased from IAC Search & Media, Inc. and/or Ask Jeeves, Inc. on or after August 1, 2005.

The proposed settlement will resolve claims that IAC Search & Media, Inc. and/or Ask Jeeves, Inc. breached its contracts with advertisers and violated other laws by failing to adequately detect and stop "click fraud" or other invalid or improper clicks on online advertisements.

If you are a member of the class, your legal rights are affected by whether you act or do not act.

For a copy of the Settlement Notice, click on the link, or visit the case website at www.AskSettlement.com.

To file a claim for your award of advertising credits under the settlement, click on the following link: AskSettlement.com/claim. Each advertiser will be allowed one claim per account."

Posted by Frank Watson at 11:19 AM | Permalink

September 14, 2007

Forbes Looks at Click Fraud – and Doesn't Sensationalize It!

Most of the time, when a mainstream media publication writes a story about click fraud, it's filled with sensational attempts to instill FUD (fear, uncertainty and doubt) into the hearts of advertisers. That's not the case in a new story from Andy Greenberg at Forbes.com, "Counting Clicks."

Greenberg interviews Shuman Ghosemajumder, business product manager for trust & safety, and manages to tell Google's side of things and striking a reasonable tone to the story. Some will say the article leans toward Google propaganda, but it's not often that mass media take that tone instead of the "big, bad Google" tone.

I'm not saying click fraud isn't a problem, or that Google doesn't need to do more work on it, especially in areas of openness with advertisers. It's just nice to read about it in a general business publication and not come away shaking my head at the misrepresentations and errors.

Posted by Kevin Newcomb at 10:13 AM | Permalink

August 17, 2007

Google, Yahoo Launch Click Fraud Resource Centers

Google has launched a new Ad Traffic Quality Resource Center to educate AdWords advertisers about the dangers of click fraud and Google's efforts to prevent it. It provides information on click fraud and invalid clicks, links to technical articles and Google policies, and links to contact Google reps.

Yahoo launched its Traffic Quality Center last week, with similar resources, but a much more finished look.

Much of the content for both sites existed before in different parts of the companies' sites, but these resource centers bring the information together in a single point. Creating the center was a condition of the click fraud lawsuit settlement made by Yahoo last year, but not for Google.

Posted by Kevin Newcomb at 10:58 AM | Permalink

July 25, 2007

Click Quality Council Holds Steering Committee Meeting

Kevin Embree, of Click Forensics, headed a Click Quality Council Steering Committee meeting today. With over 20 people in attendance to this webinar meeting, Shuman Ghosemajumder, Business Product Manager for Trust and Safety at Google, and Erica DeLorenzo, Director of Industry Practices at IAB, spoke with the committee about elements of click fraud.

Google is always working on improving their filters, Ghosemajumder said. "We are always looking at why it is these clicks get through," he added.

Both companies watch click bots, people sitting at an AdSense site and clicking or "anything manipulated or not in the way of natural behavior."

DeLorenzo said the IAB's Click Measurement Working Group is finishing up a detail report on the subject that should be released in the near future.

The concept of advertisers getting a 'phone bill-like' document for what they are paying is something being discussed and worked on by Google, Ghosemajumder said.

Google is working with the IAB to come up with standards so that people are better aware of what is being addressed. "We are striving to have the most powerful system possible," he added.

Posted by Frank Watson at 4:52 PM | Permalink

July 19, 2007

Report: Click Fraud Up to 15.8% Last Quarter

According to the latest Click Fraud Index report from Click Forensics, the overall industry average pay-per-click fraud rate rose to 15.8 percent for the second quarter of 2007. This is an increase from 14.1 percent for the same quarter in 2006 and 14.8 percent for Q1 2007.

On content networks, such as Google AdSense and the Yahoo Publisher Network, the click fraud rate was 25.6 percent. That's up from 21.9 percent for Q1 2007.

"A significant percentage of today's click fraud traffic can be attributed to two growing areas of concern for search advertisers: traffic that comes from botnets and from parked domains or made-for-ad sites," Tom Cuthbert, president and CEO of Click Forensics, said in a statement. "Advertisers running campaigns on content networks are especially vulnerable as they are increasingly targets of this growing pool of savvy fraudsters."

Click Forensics' numbers come from the Click Fraud Network, a group of publishers organized by Click Forensics to share PPC data from both large and small companies.

Preliminary data from a study of click fraud by Fair Isaac Corp (FIC) showed that, in the limited cases it was able to study, 10 to 15 percent of billed pay-per-click traffic was deemed "pathological," indicating a likelihood of click fraud.

According to Google and Yahoo, the actual click fraud rate is much lower. In March, Google reported that "under 10-percent" of clicks could be categorized as "invalid clicks," which Google catches before advertisers are charged. The amount of invalid clicks that are not proactively detected and are caught by advertisers is less than 0.02 percent. Also in March, Yahoo reported its "network discard rate," representing the average number of clicks (in aggregate) that its clickthrough protection filters identify, tag and do not bill to advertisers, is between 12 and 15 percent.

Click Forensics' 15.8 percent rate would compare to Google's "under 10 percent" number. Click Forensics does not offer a corresponding number to Google's "less than 0.02 percent" figure of invalid clicks that are billed to advertisers. That's the number that Fair Isaac's numbers would correspond to.

Posted by Kevin Newcomb at 12:57 PM | Permalink

July 5, 2007

adCenter Gets Click Quality Reports

Microsoft adCenter has added click quality reports, according to a post on the adCenter blog by Brendan Kitts, program manager for click quality for Microsoft adCenter. Because all clicks don't necessarily carry the same value, adCenter categorizes them as either standard quality or low quality. Standard-quality clicks are the clicks that you want, that ordinarily result in conversions, and that you are billed for.

Low-quality clicks are clicks that adCenter classifies as non-billable, including those that adCenter has identified as:

  • Invalid clicks
  • Clicks that have characteristics of low or unclear commercial intent
  • Clicks that exhibit patterns of unusual activity
  • Clicks that originate from spiders, robots, questionable sources, or test servers
  • Clicks that should be filtered out for other reasons

Some traffic that adCenter has flagged as low quality might ultimately result in conversions for you, which is why the label “low quality,” rather than “invalid,” provides a more accurate description of this class of traffic.

Kitts also points to a few studies that show adCenter producing a higher conversion rate than other ad platforms, including research from Atlas, Nielsen/Netratings, Compete and WebSideStory (now Visual Sciences).

Posted by Kevin Newcomb at 12:29 PM | Permalink

May 19, 2007

Fair Isaac Click Fraud Report Spreads False Alarm

Media reports (including Search Engine Watch's) saying Fair Isaac Corp. (FIC) reported industry-wide click fraud at 10 to 15 percent are not accurate. FIC decided to put out a press release and speak at its user conference about data that was extremely preliminary, based on a small sample size, and not statistically significant.

While FIC's press release and public statements were carefully worded, the data was inevitably taken out of context, especially by mainstream media that may not understand the intricacies of click fraud, or of statistics and research. This is compounded by headline editors, who don't always go for nuance when they write headlines.

So that meant that much of the news coming out of Friday's announcement ended up being misleading, such as the reports from AP, Information Week. And industry and blog reports, based on these mainstream media articles, followed suit.

I spent a good portion of my day yesterday trying to get the facts, collected in yesterday's post, Fair Isaac Pegs Click Fraud at 10-15%. I've edited that to reflect the latest facts, but I feel that it needs even more clarification and explanation to put it in perspective, so I'll try to do that here.

OK, here's the situation: Fair Isaac Corp. (FIC) is in the early stages of applying its substantial fraud-detection skills and technology to the world of click fraud. It's been planning a study, with SEMPO's help, for the past year. FIC started collecting click fraud data in August.

The data has been hard to come by, with advertisers either interested but not able to convince their company to share all the data, or advertisers not having adequate data to meet FIC's strict quality standards. That means any preliminary findings are of limited value, which FIC did say in its press release, and in talks with journalists. But as I said, data and research are often misrepresented in news stories, not because of any malicious intent, but because it's not always easy for a reporter to dig that deeply on a deadline, and many reporters are not equipped to do much more than write down the findings as told to them by the researchers.

So was it really a good idea for FIC to go public with data, which they admit is not significant and should not be extrapolated to apply to the broader industry? I really don't think so. I can't say definitely what their motivations were, but I don't think they were malicious. It seems they wanted to have something to talk about at their InterACT conference. They may have been feeling pressure to produce some results, since this data collection phase has been dragging on much longer than they expected. They may also be trying to attract more advertisers to the study, so they can get more usable data. Good intentions, but this was misguided.

They're implying that 10-15 percent of advertisers' PPC budgets go to click fraud. That's a huge jump from what the search engines and other click fraud detection firms have said:

  • In March, Google reported that "under 10-percent" of clicks could be categorized as "invalid clicks," which Google catches before advertisers are charged. The amount of invalid clicks that are not proactively detected and are caught by advertisers is less than 0.02 percent.
  • Also in March, Yahoo reported its "network discard rate," representing the average number of clicks (in aggregate) that its clickthrough protection filters identify, tag and do not bill to advertisers, is between 12 and 15 percent.
  • In January, Click Forensics put overall click fraud at 14.2 percent, which would compare to Google's "under 10 percent" number. Click Forensics does not offer a corresponding number to Google's "less than 0.02 percent" figure of invalid clicks that are billed to advertisers. That's the number that Fair Isaac's numbers would correspond to.

The huge difference between FIC's findings and the previous findings should have given them enough pause to wait until they had better data to report. Technically, everything they said was correct, but they had to know, or suspect, that it would be taken out of context and applied as a broader figure about the entire market. So chalk this up to a media-relations mistake, an error in judgment, or a mis-played hand.

I think FIC can have a tremendous influence on the PPC space, if they can get enough data. They have years of experience in detecting fraud, first on credit and debit cards, and then on other fields, like insurance and provider fraud, and network assurance, which monitors signals over telephone networks. But until they get that data, and can perform a full investigation into click fraud across markets and across verticals, I wouldn't put much weight on these preliminary findings.

UPDATE: Google's Shuman Ghosemajumder spoke with FIC as well, and has more of his response on his blog

Posted by Kevin Newcomb at 8:21 AM | Permalink

May 18, 2007

Fair Isaac Pegs Billed Click Fraud at 10-15% – IN VERY LIMITED CASES

I've updated this post with several clarifications. I've also blogged separately about how these numbers should be looked at, in Fair Isaac Click Fraud Report Spreads False Alarm.

Preliminary data from a study of click fraud by Fair Isaac Corp (FIC) shows that, in the limited cases it was able to study, 10 to 15 percent of billed pay-per-click traffic was deemed "pathological," indicating a likelihood of click fraud, according to Joseph Milana, the company's chief scientist of research and development.

While many reports are extrapolating this data to say that this should be considered an industry-wide click fraud rate, Milana said this was not FIC's intent, and the data should not be used that way. It's press release was carefully worded, but inevitably taken out of context, as I explain here.

"A limited number of advertisers have been able to provide data of the quality that we're asking for," Milana told SEW. "We're not saying these results are definitive."

The click fraud was detected using a combination of Fair Isaac's profiling technology, similar to the kind it uses to detect credit card fraud, and its "anomaly detection engine," which it uses to detect medical insurance fraud.

In March, Google reported that "under 10-percent" of clicks could be categorized as "invalid clicks," which Google catches before advertisers are charged. The amount of invalid clicks that are not proactively detected and are caught by advertisers is less than 0.02 percent. Also in March, Yahoo reported its "network discard rate," representing the average number of clicks (in aggregate) that its clickthrough protection filters identify, tag and do not bill to advertisers, is between 12 and 15 percent.

In January, Click Forensics put click fraud at 14.2 percent, which would compare to Google's "under 10 percent" number. Click Forensics does not offer a corresponding number to Google's "less than 0.02 percent" figure of invalid clicks that are billed to advertisers. That's the number that Fair Isaac's numbers would correspond to.

The company has been working with SEMPO for the past year, and started collecting click fraud data in August.

I've gotten a statement from a SEMPO spokesperson: Click fraud continues to be a concern for SEMPO and our primary objective at this point is trying to establish credible scope of the problem. We supported Fair Isaac because of their excellent track record in financial fraud.

While we can't really comment on the initial findings announced by Fair Isaac because of the extremely limited scope of the study, we are actively encouraging others to get involved in the study to give Fair Isaac a large enough dataset to be able to accurately scope the incidence of both invalid clicks and pathological behavior.

If advertisers want to get involved to determine if there's pathological behavior in their dataset they can contact either SEMPO or Fair Isaac to learn the details of the type of data required. There is no cost to the advertiser for this participation.

From Google's Shuman Ghosemajumder: The amount we filter proactively is consistently less than 10% of all clicks but individual invalid click rates can vary by advertiser, campaign and even keyword. The relatively rare cases we find of advertisers being affected by undetected click fraud constitute less than 0.02% of all clicks. Without knowing more about Fair Isaac's data gathering and methodology it is difficult to comment on their study except to say that a handful is not a representative sample size for our hundreds of thousands of advertisers.

And from Yahoo's Reggie Davis: Yahoo is deeply committed to fighting click fraud, because our business is built on the high ROI we deliver to our advertisers. Click fraud erodes advertiser trust – trust that is key to the success of our business – which is why Yahoo employs an aggressive Clickthrough Protection System that identifies and does not bill advertisers for 12-15% of the clicks on our network.

We are focused on building the world's highest quality, most effective search and display advertising marketplace, and fighting click fraud is a significant part of that effort. Without having more information about their methodology, and given what seems to be a small sample size, it's difficult to comment on Fair Isaac's research.

While we welcome third-party viewpoints on how the industry can strengthen its fight against click fraud, we strongly believe that the industry needs a single set of definitions and standards around click measurement to ensure that we're all speaking to advertisers in the same language. Yahoo is working closely with the IAB as part of the IAB Click Measurement Working Group to help drive the development of industry definition and standards and looks forward to auditing our systems against those standards in the future.

I've spoken with Fair Isaac, and have more updates and some comments on this data in another post, Fair Isaac Click Fraud Report Spreads False Alarm.

Posted by Kevin Newcomb at 12:17 PM | Permalink

April 30, 2007

Google, Yahoo Respond to Click Quality Council Guidelines

Last week, the Click Quality Council issued a list of 8 Principles of Click Quality that its members feel are necessary to deliver adequate quality in pay-per-click advertising campaigns.

I spoke to Tom Cuthbert, CEO of Click Forensics, the anti-click-fraud firm that created the CQC, who said the list was less a list of the search engines' deficiencies, but rather was intended as a starting point that could be easily agreed upon. According to Cuthbert, many of the items on the list are either already being addressed by search engines, or are expected to be addressed by them soon.

The list was compiled by members of the CQC, which includes advertisers, SEM agencies, and tools providers, he said. The group came up with about 15 principles originally, but pared the list down to those things that could be immediately agreed upon, he said.

"We wanted to make it a reasonable list that we could all agree on," he said. "Some of the items were just not things that could be committed to today."

Google's Shuman Ghosemajumder, business product manager for trust and safety, said he agrees in theory on all of the issues, but has concerns with the possible definitions the CQC is using.

"Overall, depending on how they would define some of these items, it looks like we're already doing most of them. Although some of these requests are not defined in specific terms, we agree with their general spirit, and are always interested in hearing from advertisers. We will continue to work hard to listen and make sure that we're providing great service."

Ghosemajumder published his individual responses to each of the eight principles on his blog, in a post called Advertiser Requests on Invalid Clicks.

Yahoo's Reggie Davis, VP of marketplace quality, also said the principles seem reasonable: "We believe it's essential to listen to input from advertisers, and we think the principles outlined by the Click Quality Council today are an important step in furthering industry dialogue about traffic quality. Yahoo will consider these principles carefully as we develop new features and provide additional transparency to help advertisers better understand the value of their search marketing campaigns."

Posted by Kevin Newcomb at 9:46 AM | Permalink

April 26, 2007

Click Quality Council Outlines 8 Principles of Click Quality

The Click Quality Council, an anti-click fraud group created by PPC auditing firm Click Forensics, has issued a set of eight principles it feels are necessary to produce quality clicks. The list, issued today at Ad:Tech San Francisco, is the result of a six-month effort by CQC members to identify the key elements needed to deliver adequate quality in pay-per-click advertising campaigns:

  1. Advertisers should never pay for double clicks or repeat clicks from the same session.
  2. Advertisers should never pay for traffic from bots.
  3. Advertisers should have control over where, when and to whom ads are distributed.
  4. Domain and IP exclusion lists from search providers should be easy to use and maintain.
  5. Search providers should provide advertisers detailed referrer information on all traffic that is billed.
  6. Advertisers should never pay for traffic originating outside the specified geo-targeted settings.
  7. Search engines should adopt third-party validation for click quality as other media companies have done for their audience validation.
  8. Search providers should provide an easy mechanism to reconcile paid clicks on a monthly basis.

Posted by Kevin Newcomb at 12:16 PM | Permalink

March 27, 2007

Judge Approves Yahoo Click Fraud Settlement

A judge has approved the proposed settlement reached nine months ago in a class action case brought against Yahoo by Checkmate Strategic Group in June 2005.

"Judge Snyder's final approval of the settlement validates the strength of Yahoo's clickthrough protection systems and our commitment to delivering a quality experience to both our advertisers and our consumers," Reggie Davis, Yahoo's new VP of marketplace quality, said in a statement. "Our commitment does not stop here. Quality is a top priority for Yahoo and we have a clear roadmap for how we're going to create the highest quality search advertising network in the industry."

Posted by Kevin Newcomb at 1:15 AM | Permalink

March 22, 2007

Yahoo Renews Click Fraud Prevention Efforts

Yahoo today put a renewed focus on fighting click fraud by appointing Yahoo vet Reggie Davis as the new VP of marketplace quality. Davis has been in Yahoo's legal department for 7 years, with duties that included managing Yahoo's click fraud litigation. He has been tapped to lead a team of cross-functional groups focusing on click fraud and other quality issues.

John Slade, who had been Yahoo's most visible representative in its anti-click fraud efforts, will resume a product-focused role in building out future Yahoo ad products.

In discussing his new role, Davis also shared with SEW that Yahoo's "network discard rate," representing the average number of clicks (in aggregate) that its clickthrough protection filters identify, tag and do not bill to advertisers, is between 12 and 15 percent.

More details on Davis' role can be found in today's SearchDay, "Yahoo Steps Up Click Fraud Efforts."

Posted by Kevin Newcomb at 2:54 AM | Permalink

March 14, 2007

John Marshall and Eric Enge Talk About Click Fraud

Clicktracks is well known as a significant player in the analytics space, and is in particular well known for the click fraud analysis tools that they provide to their clients as part of that package. Recently the Clicktracks CEO, John Marshall, and I spoke about click fraud in a podcast we did together.

John provides an excellent overview of what click fraud really is, how pervasive it is, and what the search engines are doing about it. For example, John outlines that click fraud affects sites in a very random manner, where some sites are hit very hard by it, and others not at all. John also indicates that the problem is much worse in very competitive markets.

When I asked John if the search engines were doing enough to combat click fraud, he provided an answer that will surprise most people (the answer was "yes"). John is not minimizing click fraud when he says this. He is simply saying that it is incumbent on the advertiser to play an active role in combatting click fraud as well.

Posted by at 10:24 AM | Permalink

March 1, 2007

Google Shares More Click Fraud Numbers

Invalid clicks on Google AdWords ads have consistently remained under the 10-percent mark, and are generally in low single-digits, Google revealed today. In addition, the amount of invalid clicks that are not proactively detected and are caught by advertisers is less than 0.02 percent, according to Google's Shuman Ghosemajumder.

Google advertisers have been clamoring for a hard number to put on click fraud for years, but Google has been unwilling to share specifics. The company has often said that revealing too much would make it easier for fraudsters to take advantage of the system, which has frustrated advertisers who want to know where their money is going.

This revelation is the latest in a series of moves designed to offer more transparency to advertisers, Ghosemajumder said. Google has come under fire from lawsuits, click fraud reporting firms, and advertisers in recent months, all looking for more granular details on the level of invalid clicks occurring in the AdWords system.

Google is also undertaking several more click fraud-related initiatives in coming months. Among these are IP Filtering capabilities for advertisers, enhanced invalid click reports, educational initiatives, and an improved reporting format. The first three initiatives are expected to roll out this month, while the improved reporting format will come later this year, he said.

We have more details in today's SearchDay.

Posted by Kevin Newcomb at 6:54 AM | Permalink

February 2, 2007

Google Shares Tips on Addressing Click Quality Concerns

At the Inside AdWords blog, Google invites Click Quality team member Julian to put a kinder, gentler face on the team that many have complained is inaccessible by mortal advertisers. He shares a bit about what his job entails, and points out some of the more common concerns that usually turn out not to be click fraud, and steps to take to investigate suspicious clicks.

Posted by Kevin Newcomb at 10:32 PM | Permalink

February 1, 2007

Google Refutes Click Fraud Numbers, Once Again

In response to the latest click fraud report from Click Forensics, Google's Shuman Ghosemajumder has responded in a two part post on his personal blog.

"On a basic level, these numbers are much higher than what we see at Google, and are not at all representative of the actual statistics of our network," he writes.

He goes on to outline problems with the methodology behind the reports from Click Forensics and others, most seriously the practice of counting page views as clicks, and the fact that even fraudulent clicks that Google detects and removes before the advertiser is charged are counted in click fraud reports.

"The key point here is not that their numbers are 'too high.' The point is that their data collection methods are inherently flawed and any resemblance their numbers could have to reality would be coincidental," Ghosemajumder writes.

He brings up many of the same points he mentioned when he spoke with me about the "Sausage Manifesto" last month (more from Shuman here). It's mission to debunk click fraud reports stepped up in March 2006 after SES NY, and went into full force at SES San Jose in August, when it released a white paper called "How Fictitious Clicks Occur in Third-Party Click Fraud Audit Reports" to specifically address what it calls flaws in the methodology of click fraud auditors like Click Forensics.

Google's Matt Cutts adds his take, with pretty pictures, on his blog.

Posted by Kevin Newcomb at 10:31 AM | Permalink

January 30, 2007

Click Fraud Numbers Up, Content Networks Near 20%

A Click Forensics report found 2006 click fraud numbers reached 14.2% overall and 19.2 for clicks from search engine content networks.

While high spend terms (clicks of $2 or more) averaged 20.9% click fraud.

“The industry average click fraud rate climbed to its highest level in 2006 and ... the click fraud rate for affiliate sites was significantly higher than the overall industry average,” said Tom Cuthbert, president and CEO of Click Forensics, LLC. “The data confirms what other recent independent investigations have uncovered about click fraud. Click fraud remains a concern for online advertisers and affiliate sites represent a large and growing source of click fraud traffic. These are areas we and advertisers will continue to monitor closely in 2007.”

Posted by Frank Watson at 4:24 PM | Permalink

January 4, 2007

Google's Response to "The Sausage Manifesto"

Today's SearchDay, It's Time to See What's In the PPC Sausage, looks into Jeffrey Rohr's open letter to paid search networks about click fraud. There was not room enough to fully cover both Rohr's concerns and Google's responses (I've not heard back from other paid search networks yet), so I'll run through some of them here.

Please note that these statements from Shuman Ghosemajumder, who heads the click quality team at Google, were not all given directly in response to each statement in the manifesto, but pulled from different parts of our conversation. So if it seems that the response is incomplete, that is likely a shortcoming on my part rather than Ghosemajumder's.

Addressing some specific points in the document, Ghosemajumder said that (#1, #2) Google has been working to increase its education and transparency, and recognizes the need to continue to do so. Google is not only investing in proportion to the problem (#3) , but in excess of the problem.

He said that (#4) Google does not promote conversion tracking as a solution to click fraud, but just as a best practice for advertisers to follow and a way for advertisers to better show Google where the problem lies so it can be investigated. Undetected click fraud will manifest itself either as an unexplained drop in ROI, so it's important for advertisers to be monitoring their ROI in some way to show Google where to look when they think there's a problem, he said.

Customer service is a priority for Google (#5), and the company has metrics in place to measure its ability to deal with customer inquiries in a timely manner. Ghosemajumder said at SES in San Jose last August, he offered his personal help in escalating any click fraud issue that was not being adequately resolved, but did not get any e-mails from advertisers taking him up on the offer.

Google has added more educational materials to its site (#6), and is communicating the issue on blogs and in other public forums more than ever before, and plans to continue to do so, he said. With its participation in the IAB Click Measurement Working Group (#7), Google is hoping to explore opportunities for industry-wide cooperation, define a click from a technology standpoint, and define click fraud and invalid clicks. It is not creating a mechanism for detecting click fraud, but it will help put everyone on the same page, he said.

Google has expressed its concerns with methodologies of click fraud reporting tools (#8), and to date none of the providers has addressed what Ghosemajumder says is a fundamental flaw in the measurement stemming from the way a browser cache deals with multiple pageloads.

Prosecuting click fraud cases in court presents a challenge (#9), since it could force Google to reveal information that could be exploited by fraudsters, he said. The Bradley case was unique, since it involved extortion, and reports that he was earning $30,000 a month are inaccurate, since he would have had no need to attempt to extort $100,000 from Google if it was true. He said that Google does continue to work with law enforcement to refer click fraud cases to them. He also pointed out that Google did win a civil judgment against Auction Experts in a civil suit last summer.

The IAB working group is a good place to begin the discussion about industry-wide solutions like a third-party auditing system or "perp registry" (#10), though Ghosemajumder said the usefulness of such a registry would be limited, given the

Ghosemajumder acknowledged that there is room for improvement in Google's communications with advertisers (#11), but also noted that progress has been made, with increased education and transparency efforts like its invalid clicks reporting tools.

UPDATE: John Slade from Yahoo has added his voice to the discussion in a comment on the Sausage Manifesto blog.

Posted by Kevin Newcomb at 7:49 AM | Permalink

January 3, 2007

Rohrs Addresses Click Fraud Issues With "Sausage Manifesto"

In a "Jerry Maguire moment" during SES Chicago last month, Jeffrey Rohrs, long-time SES moderator on legal and click fraud issues, sat down at 4 a.m. on Day 4 of the show to pen "The Sausage Manifesto."

UPDATE: An in-depth look at the document can be found in this SearchDay article.

The 8-page document, billed by Rohrs as "an open letter to paid search networks on behalf of PPC advertisers," includes 11 specific requests to paid search networks, which Rohrs hopes will move the click fraud discussion forward:

  1. Talk, Don't Lecture
  2. Appreciate Our Unique Circumstances
  3. Invest in Proportion to the Problem
  4. Acknowledge that Tracking Alone Is Not the Answer
  5. Improve Click Quality Customer Service
  6. Build a Click Quality Education Resource Center
  7. Light a Fire Under the IAB
  8. Play Nice with Others
  9. Put Somebody in Jail
  10. Create a Cllck Fraud Perp Registry
  11. Put Your Data Where Your PR Is

"I've tried to formulate specific requests to the networks that are drawn from real advertiser concerns/complaints. Admittedly, some of the requests are based on advertiser perception more that marketplace realities," Rohrs told SEW. "My belief, however, is that the networks must accept the fact that much of this issue is now driven by factors that are out of their control and, as a result, they must focus on improving the things they can control -- data disclosure, collaborative solutions, and customer service."

Posted by Kevin Newcomb at 1:29 PM | Permalink

December 11, 2006

Google Says Click Fraud Makes Up Less Than 2% of Invalid Clicks

Google's click fraud guru Shuman Ghosemajumder says click fraud makes up less than 2% of all “invalid clicks”, which means the actual click fraud rate is more likely just a fraction of one percent. Andy Beal has the scoop over at Marketing Pilgrim.

postscript: The conversation around Google's assertion that its click fraud rate is below 2 percent, is continuing on the blogs of Google employees Shuman Ghosemajumder and Matt Cutts.

Shuman is backing away from the 2-percent figure, saying only that "the total number of invalid clicks we detect – whether for suspected malicious or non-malicious intent – is in the single digit percentages. So third-party estimates which say that click fraud is 15% or higher appear to clearly be substantial exaggerations."

In another comment, he says there's no way to determine an exact click fraud rate: "I did not provide a specific click fraud rate. We don't have such a metric to disclose, because there's no exact way to determine 'intent' and we certainly do cast the net wide in terms of throwing out many clicks which we know have nothing to do with fraud. The total percentage of all of those clicks that we don't charge advertisers for in this fashion is in the single digits."

Posted by Kevin Newcomb at 4:30 PM | Permalink

December 7, 2006

Botnets and Click Fraud and Terrorists, Oh My!

Webmaster Radio's Jim Hedger is causing quite a stir with his exposé on botnets, click fraud, and terrorists profiting from Google's AdWords program.

Hedger admitted in his post on Threadwatch that the terrorist part was sensational. The meat of the story is the prevalence of botnets. Hedger described some of his research into botnets in an article at SiteProNews.

I'm waiting to hear back from Google for their side of the story, and I expect to have more to share on this tomorrow.

UPDATE: Webmaster Radio has posted the audio file from Hedger's show, which is billed as the first in a series of shows on the topic. And I've posted a story with a response from Google over at ClickZ.

Posted by Kevin Newcomb at 6:03 PM | Permalink

November 1, 2006

Google Click Fraud Settlement Payments Received

I reported this morning that Google Advertisers Receiving Settlement Payouts for the refunds they were rewarded based on the Google Click Fraud Settlement. The amounts of those payments are making many advertisers feel like they were ripped off. For example, one advertiser informed us that they paid Google over $480,000 over the past three years and only received a credit of $280. You can check to see if you received a credit by viewing your "Billing Summary" under each campaign in your Google AdWords account.

Posted by Barry Schwartz at 8:45 AM | Permalink

October 19, 2006

Click Fraud Dropping Amongst Google & Yahoo

News.com reports on a new Click Fraud Index study that shows the click fraud rate dropping from 12.8 percent to 11.9 percent in the 3rd quarter amongst top-tier PPC engines. Second-tier engines have realized an increase in click fraud with 23.2 percent from 20.3 percent. Overall, click fraud is down at 13.8 percent from 14.1 percent, quarter to quarter.

Postscript: Google asked me if they can make a statement about this, so here it is:

The estimates of attempted click fraud provided by this report are considerably more than the numbers we see on our network. More importantly, even if the numbers in the report could be believed despite the serious flaws we have previously demonstrated in their methodology, advertisers should understand that they include clicks Google has filtered and not charged for. As a result, the statitistics in the report do not actually measure the impact of click fraud on advertisers but the amount of fraud that may have been attempted. Google advertisers can see exactly the amount clicks we filter by running a simple report in AdWords

Posted by Barry Schwartz at 9:13 AM | Permalink

October 6, 2006

Yahoo Messenger Worm Targets Google AdSense Click Fraud

The Register reports that a new malware worm has been discovered that targets Yahoo Messenger, sends those users to pages with Google AdSense ads and clicks on them. The Google ads are specifically high priced keywords such as mesothelioma, which is a cancer caused from exposure to asbestos. More details on this worm at the Spyware Guide.

Posted by Barry Schwartz at 3:40 PM | Permalink

September 28, 2006

The Click Quality Council Formed By ClickForensics

ClickZ reports that ClickForensics announced that they will be leading a new group named The Click Quality Council to "discuss Pay Per Click (PPC) quality issues and to ensure their interests are represented in the development of PPC measurement standards." The Click Quality Council has 20 advertisers including names such as VISA and LendingTree and agencies such as Carat Fusion and Agency.com. There were hints that this group would be formed in the BusinessWeek's Good Look At Click Fraud. It is important to note that the IAB seems to be setting up a similar organization, but the IAB will have both advertisers/agencies and search engines involved, whereas the Click Quality Council will only have advertisers and agencies.

Postscript: Some corrections were made to this article.

(1) The Click Quality Council has 20 advertisers. (2) The CQC wants to make it clear that they are not setting up a "similar or competing organization" to the IAB or to SEMPO.

Posted by Barry Schwartz at 9:26 AM | Permalink

September 22, 2006

BusinessWeek's Good Look At Click Fraud

Via Micropersuasion, Click Fraud is a BusinessWeek cover story on, well, click fraud. What's new from stories we've already read and read and read about click fraud before? Lots, ranging from a new advertiser pressure group, to an industry estimate that click fraud is 10 to 15 percent, along with a couple outing themselves as fraudsters. It's well worth a read. Here are some highlights:

BusinessWeek talks about its investigation coming up with "paid to read" rings, spread out in a way to presumably avoid detection. We get a named Minnesota couple talking about how they "dabbled" in click fraud to earn $5,000 over four months by setting up sites with Google and Yahoo ads, then paying other people to click. Ouch -- not a good thing for either company to have someone flat out admitting. Not sure the wisdom of that couple stepping forward, either!

Further down, BusinessWeek suggests clicks aren't a good measure of consumer interest:

Google and Yahoo are grabbing billions of dollars once collected by traditional print and broadcast outlets, based partly on the assumption that clicks are a reliable, quantifiable measure of consumer interest that the older media simply can't match.

Actually, it's still a fairly good assumption. That's because clicks can often be related to a conversion action -- a purchase. If you're getting a lot of clicks but no conversion, you might have a bad pitch, bad product or bad clicks due to click fraud. Unfortunately, many marketers won't know any of this due to the failure to measure conversion at all. Add in conversion tracking, and you have a one-two punch that makes these type of ads so powerful.

The story gives us a new estimate for click fraud, 10 to 15 percent:

Most academics and consultants who study online advertising estimate that 10% to 15% of ad clicks are fake, representing roughly $1 billion in annual billings.

Maybe. Maybe not. Those the reporters talked with aren't named. I've continued to hear ranges that go from practically nothing (what the search engines say, and they do have to be counted into the estimates) to as high as 50 percent. I've not heard anyone agreeing on a particular range.

BusinessWeek says some big brands will push on click fraud later this month:

In late September a coalition of such major brands as InterActive Corp.'s (IACI ) Expedia.com travel site and mortgage broker LendingTree is planning to go public with its mounting unease over click fraud, BusinessWeek has learned. The companies intend to form a group to share information and pressure Google and Yahoo to be more forthcoming.

Ironically, IAC's various units such as Ask sell pay-per-click ads themselves, nor have I see anyone suggest that Ask is somehow immune to click fraud. Frankly, people probably haven't looked at it much simply because the overall sales and volume are much less than at Google or Yahoo.

We've got a former anonymous Yahoo manager saying click fraud can't be stopped:

"Advertisers should be concerned," says a former Yahoo manager who requested anonymity. "A well-executed click-fraud attack is nearly impossible, if not impossible, to detect."

Google, which usually gets the brunt of click fraud criticism I'd say, gets a small reprieve from one advertiser:

Google, he says, does a better job than Yahoo of screening for fraud. But neither adequately protects marketers, he argues.

That advertiser does the drill down that often is so much better at illustrating click fraud than the general talk about it:

How, he wants to know, did he receive traffic this summer from PCs in South Korea which are clicking on insurance1472.com and insurance060.com? The only content on these identical sites -- and five other clones with similar names -- are lists of Yahoo ads, which occasionally have included MostChoice promotions.

The story then goes into the idea of "recycled" ads -- IE, contextual placements that can range from domain parking services to sites that simply scrape search results as if they are presenting "new" content.

We get a deeper look into an alleged pay-to-read ring:

He owns about 20 paid-to-read sites, he says, as well as 200 parked sites stuffed with Google and Yahoo advertisements. But he says he will take down healthinsurancebids.com to avoid discovery. He claims to take in $70,000 in ad revenue a month, but says that only 10% of that comes from PTRs.

BusinessWeek then joins some of these rings:

BusinessWeek reporters received a torrent of e-mail showcasing hundreds of parked sites filled with Google and Yahoo ads. The groups urged participants to click aggressively on ads.

And interviews a former pay-to-reader:

At one point, she says she belonged to as many as 50 such sites but earned only about $200 all told. More recently, she says, most PTR sites have dropped the pretense of caring whether members are interested in the sites they visit.

Google and Yahoo are cited as saying they filter this stuff out.

Of course, further down in the story, I want to scream at one of the advertisers to just stop advertising outside Google itself:

But as clicks from ZapMeta kept arriving, Fleischmann demanded in an Aug. 7 e-mail to Google: "You should be trusting us and doing something about [ZapMeta] as a partner, instead of finding more ways to refute our data or requests."

The advertiser could easily restrict ads to only show up on the Google search network, which would eliminate the domain and contextual driven traffic that can be so problematic. He'd get less traffic, but he'd also get less frustration.

Then again, his frustration is well understood and a big warning to the major ad networks. As they've gotten bigger, they're more vulnerable to this type of gaming. One way of combating it is the off heard cry to allow more exclusion of particular sites across the network. Google has done a lot here, but more could come. Yahoo seems to have much further to go.

Don't miss the extras that go with the story:

Posted by Danny Sullivan at 6:43 AM | Permalink

August 18, 2006

Third Click Fraud Lawsuit Filed Against Google, But Does It Even Have A Chance?

Third Time's a Charm? Google Sued for Click Fraud (Again) from eWeek covers Google being sued for click fraud again. This follows on the recent settlement in the Lane's Gifts class action click fraud case, a settlement that makes it questionable whether this new case will even succeed.

The Lane's Gifts settlement resolved all click fraud claims against Google in the United States excepted for parties that specifically opted out, which was all of 556 advertisers. I assume some of those parties are those taking part in a second unresolved click fraud case against Google, based out of Northern California. This third case, to my understanding, will only be able to cover those who were not parties to either the first resolved case or the second case already going -- which is going to be a small number, indeed.

Posted by Danny Sullivan at 8:35 AM | Permalink

August 16, 2006

Yahoo Class Action Settlement Information Released

Details of the Yahoo class action settlement have been posted at checkmatesettlement.com. What you need to know right now is:

(1) You have until October 14, 2006 to submit a written statement requesting exclusion from the Class (specific guidelines are enclosed in the notice), if you want to be excluded from the class.

(2) You have until November 20, 2006 to download the "Assertion of Right to Participate in Additional Claims Review Process Form" from this site and submit it by registered or certified mail, if you want to participate in the class and participate in the claims review process.

Posted by Barry Schwartz at 8:37 AM | Permalink

August 15, 2006

103 Links About SES San Jose 2006 (AKA The Big Recap)

Couldn't make it to last week's monster Search Engine Strategies show in San Jose? Well, maybe next time! In the meantime, I've compiled a list of coverage from across the web, even somewhat organized into topic areas.

Our San Jose show is always tough for me, as I arrive a week earlier to visit with the various major search engines out there. That means two weeks of news and email to dig out from, since you can never get it all done on the road. All that digging out means I know I don't have everything listed below. But you'll find plenty to keep you entertained.

General Recaps

Eric Schmidt Appearance

Eric Schmidt & Search Privacy

Click Fraud Panel & Related Coverage

Yahoo's Panama Ad Platform Preview

Social Search & Related Topics

Organic Listings Sessions

Search Advertising Sessions

Issues Sessions

News, Blogs & Public Relations

Big Sites/Budget Sessions

Small Sites/Budget Sessions

Conversion & Metrics

Other Sessions

Google Dance & Parties & Pictures

Posted by Danny Sullivan at 4:50 PM | Permalink

August 9, 2006

Yahoo & Google Commit To An Other Independent Click Fraud Audit At SES

Donna Bogatin snagged both John Slade, Yahoo Search Marketing, and Shuman Ghosemajumder, Google Trust & Safety into agreeing to an other clickfraud audit. This commitment is for an IAB "independent auditing against the complete guidelines." Donna grilled Yahoo & Google during the Q&A session of the Auditing Paid Listings and Click Fraud Issues, which I hear was pretty heated.

Posted by Barry Schwartz at 10:50 AM | Permalink

August 8, 2006

Google Fights Claims Of Some Third Party Click Fraud Studies

The Google Blog just posted a report on how they feel some of the independent third party click fraud reports published are exaggerating the clickfraud numbers. Google says they have seen some reports that show "1.5 times the number of clicks in our logs," the reason? Well, Google summarized the "two main points" of the larger paper they published on the issue as being; (1) "mischaracterizing events," i.e. clicking the back button and it being characterized as a click and (2) "conflation across advertisers and ad networks," where cookie issues confuse Yahoo clicks with Google clicks. For the full, 17-page report, click here.

Posted by Barry Schwartz at 1:06 PM | Permalink

August 3, 2006

Reminder: AdWords Claim in Click Fraud Settlement Due Tomorrow

The approved click fraud settlement requires that you submit your claim at https://www.clicksettlement.com/ before the end of the day tomorrow, August 4th, 2006. So this is your chance, if, I repeat, IF, you want to be a part of this settlement. I have reported on the discussion forum coverage of this settlement, where AdWords advertisers have questions about the settlement, but you can also get more details at the FAQs page.

Posted by Barry Schwartz at 9:10 AM | Permalink

August 2, 2006

Industry Groups, Search Engines To Develop Click Fraud Guidelines

Google, Yahoo and others team up against click fraud from News.com covers The Interactive Advertising Bureau and the Media Rating Council partnering with Ask, Google, Microsoft, Yahoo and others to form the @Click Measurement Working Group.@ Says News.com:

The group's mission is to establish guidelines for what constitutes valid clicks and invalid clicks on ads. Guidelines can help the industry measure how prevalent click fraud really is. Third-parties who sell click-fraud combating services to advertisers claim that click fraud rates are as high as 30 percent. Google and Yahoo counter that click fraud rates are minimal.

Postscript: Google has a short comment here

Posted by Danny Sullivan at 11:04 PM | Permalink

July 27, 2006

Google Click Fraud Settlement Approved

Just got word from Google that the settlement in the class action lawsuit over click fraud has been approved. I'm dashing out, so this is just a short post to give you a heads-up. So far, I haven't seen any news stories on it. Settlement is here (PDF file), the $30 million in attorney fees is approved, apparently around 500 companies choosing to opt-out. I'll postscript more tomorrow or do a fresh post when stories appear. Google statement:

We're pleased Judge Griffin has affirmed the settlement as appropriate and fair to advertisers. We look forward to continuing to manage invalid clicks effectively and provide our advertisers with an outstanding return on their investment. --Nicole Wong, Associate General Counsel, Google

Postscript: Short AP story here, MarketWatch here, Official Google Blog post here.

Posted by Danny Sullivan at 1:43 PM | Permalink

July 26, 2006

Google AdWords Now Reporting Invalid Click Rates

Google is now offering AdWords advertisers the ability to see how many invalid clicks that Google catches before they are billed. "Estimating invalid clicks" from the Official Google Blog has more about this good move, which should help to better educate advertisers.

Concern about click fraud has been rising over the years, though whether click fraud itself has risen remains a debatable point. In my The Abridged Version: Independent Report On Google's Click Fraud Detection Practices post yesterday, I highlighted one example of this -- of how Google is conducting more investigations into click fraud reports but not paying out more. The independent expert who compiled the report felt this was due to people having more concerns rather than more click fraud occurring.

Still, that same report highlighted what many search marketers already know. It's difficult to know what exactly is going on within the black box of Google's ads billing system. The reporting Google is doing will help shed a bit more light into that box.

Specifically, there are new reporting options to see "Invalid Clicks" and "Invalid Clicks Rate." Check these, and you'll see all the clicks that Google has filtered before you were billed, plus the percentage of those clicks versus the total clicks to your campaign. More help from Google is covered here.

It will be especially interesting to see what stats individual advertisers start to share publicly. Going back to that independent report I mentioned, it covered how Google catches far more invalid clicks through its filters compared to those found when investigations are done after billing. Some advertisers might find they have double-digit invalid click rates. That's not a reason to panic, in the sense that you aren't paying for those clicks. You should be reassured.

Then again, I suspect anyone seeing high levels of invalid clicks being caught might also want to take a harder look at what they are actually getting billed for beyond this, since the high rate might suggest they are in a click-fraud prone industry and perhaps stuff is still slipping past the Google filters. Of course, a low rate might warrant a further look since perhaps Google's not catching stuff it should.

Confused? Here's the overriding advice. Everyone should be auditing their click logs, watching for odd things, just as you would your credit card statement. Google and Yahoo both have long had systems in place to automatically catch fraud. The Google move significantly helps advertisers understand that this protection is already in place. But it doesn't relieve the advertiser of being prudent and doing their own review, as well.

Finally, isn't giving this data making it easier for those who want to conduct click fraud to test what can get through? What prevents someone from opening an account, then trying various things until they find a way to generate clicks that Google can't catch?

"If you want to invest a huge amount of time and resources, you could already run those type of experiments. It doesn't provide significantly more feedback to fraudsters," said Shuman Ghosemajumder, Google's business product manager for trust and safety.

By the way, though the reports are said to be "real-time," they actually give you a total for an entire day. You can't see minute-by-minute catches.

Posted by Danny Sullivan at 4:42 AM | Permalink

July 25, 2006

The Abridged Version: Independent Report On Google's Click Fraud Detection Practices

Last Friday, an independent report on how Google deals with click fraud was published as part of the ongoing Lane's Gifts v. Google class action lawsuit over click fraud. To my knowledge, it is the most comprehensive, detailed public look into how Google deals with click fraud that's ever come out. It finds that Google's efforts to combat the issue have been reasonable, though there are some eyebrow raising bits on how the author only finds the situation was in control by the end of 2005 and how it's impossible to fully know whether some clicks are invalid -- and thus, potentially -- impossible to prevent some types of fraud through purely automated means.

The report is long, a 47 page PDF file. Anyone interested in click fraud issues should give it a thorough read. But given how everyone's always busy, I thought I'd highlight below a number of sections that stood out in my review of the document.

The report is by Dr. Alexander Tuzhilin, Professor of Information Systems at New York University. To prepare it, he says in the Executive Summary at the beginning (page 1):

I have been asked to evaluate Google?s invalid click detection efforts and to conclude whether these efforts are reasonable or not. As a part of this evaluation, I have visited Google?s campus three times, examined various internal documents, interviewed several Google?s employees, have seen different demos of their invalid click inspection system, and examined internal reports and charts showing various aspects of performance of Google?s invalid click detection system. Based on all these studied materials and the information narrated to me by Google?s employees, I conclude that Google?s efforts to combat click fraud are reasonable. In the rest of this report, I elaborate on this point.

Immediately, the first thing that comes to mind is that he makes no mention of talking with individual advertisers, which could lead you to think that if he's only talking with Google, of course he's likely to come away with the idea that Google is doing everything just fine.

When you read the report, it's clear this isn't the case. Google does come under criticism. It's also important to realize Tuzhilin was not employed by Google to create this report. He's an independent expert appointed to my knowledge by the court. Exactly how he was selected is unclear, and I do think it would be a better report if advertiser data had been involved. But there's still plenty of good stuff here to digest.

Page 2 covers his background and materials reviewed from Google to prepare the report.

Page 3 and some of page 4 covers those he talked with at Google. Interesting details are that Google's click quality team consists of about 36 people, one-third engineers looking to design detection systems and the remaining two-thirds dedicated to doing manual investigations of suspected fraud.

Pages 4 through 6 cover the history of the internet, search engines and Google, most of which isn't that necessary for most experienced search marketers. Page 7 talks about three main ways of purchasing advertising:

  • CPM - cost per impression
  • CPC - cost per click
  • CPA - cost per action

Again, basic stuff. But it's worth touching on because of some of the current debate that Google and other search engines will be forced to go to CPA pricing to fully eliminate fraud.

On page 8, Tuzhilin lends some support of this, or at least the problems that others have raised with CPC:

Although currently popular, the CPC/PPC model has two fundamental problems:

  • Although correlated, good click-through rates (CTRs) are still not indicative of good conversion rates, since it is still not clear if a visitor would buy an advertised product once he or she clicked on the ad. In this respect, the CPA-based models provide better solutions for the advertisers (but not necessarily for the search engines), since they are more indicative that their ads are ?working.?  
  • It does not offer any ?built-in? fundamental protection mechanisms against the click fraud since it is very hard to specify which clicks are valid vs. invalid in general, as will be explained in Section 8 (it can be done relatively easily in some special cases, but not in general). For this reason, major search engines launched extensive invalid click detection programs and still face problems combating click fraud.

In response to these two problems and for various other business reasons, Google is currently testing a CPA payment model, according to some reports in the media. Some analysts believe that the conversion-based CPA model is more robust for the advertisers and also less prone to click fraud. Therefore, they believe that the future of the online advertising payments lies with the CPA model. Although this is only a belief that is not supported by strong evidence yet, Google is getting ready for the next stage of the online advertising ?marathon.?

What Will Replace Pay-Per-Click Advertising? over at Publishing 2.0 from Scott Karp is a good roundup and debate on some of the issues of CPA perhaps as the solution to CPC issues.

I've posted lots of comments in Karp's post, but my personal view is this. Currently, Google is offering all three major payment systems: CPC, CPM and CPA. It is offering all three not just because of fraud issues but because advertisers have different goals with advertising, where different payment models may be required.

Building brand? You want impressions perhaps more than clickthrough, and suddenly CPM makes sense. Really savvy with conversion tracking? CPA might make more sense for you, as a way for you to feel less likely to be exposed to fraud and more likely to really be paying only for key traffic. Fairly rudimentary with conversion tracking? Doing low-cost CPC ads might make a lot of sense, for your situation. And beyond the three big ones, I'm sure we'll see other options emerge. The unifying goal around all of them, from Google's perspective, will be figuring out a way to help advertisers track that the ads are working according to some type of metrics that the advertisers want.

Skipping down past background on how AdWords works and the AdSense program (AdSense For Domains doesn't get mentioned, though it's a major program), page 13 starts in on what Google can tell about clicking activities.

Google is apparently making use of conversion data that advertisers provide to determine if fraudulent clicks are happening. My understanding was that conversion data was supposed to be ringfenced and not used by Google for anything, not even in the aggregate. But perhaps the policy has changed or perhaps I misunderstood this. I'll check on that (and also note that confusingly, the report says on page 34 that "None of the filters uses the conversion information that Google collects"). Certainly Google made no such restrictions when it launched Google Checkout. But even with conversion data, the report notes using this info isn't perfect.

Google collects various types of information about querying and clicking activities, including certain types of ?post-clicking? data about conversion actions on the advertiser?s website where the visitor is taken following the click. All this data accumulated by Google is extracted from various sources and contains comprehensive information about visitor?s activities on the Google Network.

As stated before, the conversion data ? the ?post-clicking? data about conversion actions on the advertiser?s website ? constitutes an important piece of this collected data. In particular, if the advertiser formally agrees to provide this information, Google collects data on whether or not the user visited certain designated pages on the advertised website that the advertiser marked as ?conversion? pages, such as the checkout page and certain form filling pages. This conversion data is limited to what the advertiser decided to provide to Google and is not as rich as the clickstream data collected by advertisers themselves on their websites. Also, many advertisers decide to opt out from providing this conversion data. In this case, Google does not have any conversion information and therefore does not know what happened after a visitor clicked on the ad. Nevertheless, this post-clicking conversion data is important for Google even in its limited form because it conveys some intentions of the visitors on the advertised website and provides good insights into whether or not the visitor is seriously considering purchasing the advertised product or service....

This ?raw? clicking data described above is subsequently cleaned, preprocessed and stored in various internal logs by Google for different types of subsequent analysis conducted on this data.

One inherent weakness of Google?s (or any other search engine) data collection effort that is important for detecting invalid clicks, is inability to get full access to all the clicking activities of the visitors of the advertised website. In other words, the conversion data that Google collects provides only a partial picture of all the post-clicking activities of the visitor on the advertised website. This data is important for detecting invalid clicks since better invalid click detection methods can be developed using this data. Unfortunately, Google (and other search engines) does not have full access to this data, unless the advertised website decides to provide its clickstream data to Google, which many websites are reluctant to do. However, this is not Google?s fault ? this is an inherent limitation of the types of data available to Google.

While it might not be perfect, the report also notes at the end of this section that no one has the perfect collection of information:

However, this lack of full conversion data available to Google is compensated by various types of querying and clicking data that Google can collect, whereas advertisers and third-party vendors cannot. Therefore, there exists a tradeoff between the types of data relevant for detecting invalid clicks that is available to Google, advertisers and the thirdparty vendors. None of these three groups have the most comprehensive set of data pertinent to detecting invalid clicks, and each of them needs to settle for the invalid click detection methods possible only with the data that they have.

On page 14, the report addresses the frustration advertisers feel over the relatively non-granular nature of Google's reporting versus Google's need to keep some things carefully protected:

The smallest unit of analysis is one day. For example, the number of invalid clicks on an ad detected by Google (or any other related statistic) can only be reported on a daily basis (although there are certain alternative methods of obtaining aggregation granularity that is smaller than a day). In other words, advertisers cannot know if a particular click on a particular ad was marked as valid or invalid by Google, and Google refuses to provide this information to advertisers.

This is a source of contention and dispute between Google and the advertisers, and one can understand both parties in this dispute. On one hand, the advertiser has the right to know why a particular click was marked as valid by Google (when the advertiser thinks that it is invalid) because the advertiser pays for this click. On the other hand, if Google discloses this information, it opens itself to click fraud on a massive scale because, by doing so, it provides certain hints about how its invalid click detection methods work. This means that unethical users will immediately take advantage of this information to conduct more sophisticated fraudulent activities undetectable by Google?s methods.

This conflicting dilemma between advertisers? right to know and Google?s inability to provide the appropriate information to advertisers because of the security concerns is part of the Fundamental Problem of the PPC advertising model to be discussed in the next section. More recently, Google tried to bridge this gap between Google and the advertisers.

Page 15 spends time looking at various definitions of click fraud, bringing us to page 16 which raises the bigger issue that it is impossible to know the intent of ALL clicks, which is crucial to understand what chunk of them might be fraudulent:

Unfortunately, in several cases it is hard or even impossible to determine the true intent of a click using any technological means. For example, a person might have clicked on an ad, looked at it, went somewhere else but then decided to have another look at the ad shortly thereafter to make sure that he/she got all the necessary information from the ad. Is this second click invalid? To make things even more complicated, the second click may not be strictly necessary since the person remembers the content of the ad reasonably well (hence there is no real need for the second click). However, the person may not really like or care about the advertiser and decides to make this second click anyway (to make sure that he/she did not miss anything in the ad and his/her information is indeed correct) without any concerns that the advertiser may end up paying for this second click (since the person really does not care about the advertiser and his/her own interests of not missing anything in the ad overweigh the concerns of hurting the advertiser). Therefore, 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.

Soon after this, on page 17, comes the first real bombshell to me. As said above, you can't detect the intent of all clicks. Given this, there's no reasonable way to be certain that technological fixes for click fraud detection are working:

In summary, between the obviously clear cases of valid and invalid clicks, lies the whole spectrum of highly complicated cases when the clicking intent is far from clear and depends on a whole range of complicated factors, including the parameter values of the click. Therefore, this intent (and thus the validity of a click based on the above definitions) cannot be operationalized and detected by technological means with any reasonable measure of certainty.

What? Didn't the report find Google was acting reasonably? Yes, and I think this is is because as the report goes on, it's because Google's not relying solely on automated means to stop click fraud, which might allow some clicks to get through, if that were only the case.

Page 18 picks of the issue even more strongly, and I've bolded this section because it deserves special attention. Note that the italics were originally included:

The last statement has one important implication: given a particular click in a log file, it is impossible to say with certainty if this click is valid or not in all the cases. This means that

  • It is impossible to measure the true rates of invalid clicking activities, and all the reports published in the business press are only guesstimates at best.  
  • The invalid click detection methods need to be developed without a proper operationalizable conceptual definition of invalid clicks.

The important word above is all the cases since in some cases it can be stated with certainty if a particular click is valid or not. For example, it is easy to detect a doubleclick using relatively simple technological means, assuming that the doubleclick is invalid.

Again, it seems to be a case that automation can catch some, perhaps lots of click fraud, but it can't catch all of it because the intent problem. Also crucial in the above is the stressing that rates we've been given from various sources are simply guesses, since the intent of clicks aren't know to some of these other sources.

Indeed, in the case of the recent Outsell report, you don't even have to worry about figuring out the intent of particular clicks. Click fraud stats from that report come from half the panel entirely guessing about what click fraud rates they might have -- guessing, because that half does not auditing of clicks at all.

Page 19 deals with ways of identifying invalid clicks, at least according to operational approaches -- IE, automated criteria. Do the clicks show some type of:

  1. Anomaly from past clicking patterns for a site or ad?
  2. Violate certain predefined rules?
  3. Fall into certain classes of behavior that make them deemed invalid?

Page 20 explains that Google primarily depends on the first two approaches -- looking for anomalies and using rules -- but then gets into what it stresses as the "Fundamental Problem" of fraudulent clicks:

We conclude that there is a fundamental problem associated with the definition of invalid clicks for the Pay-per-Click model. This problem can be summarized as follows:

  • There is no conceptual definition of invalid clicks that can be operationalized in the sense defined above.  
  • An operational definition cannot be fully disclosed to the general public because of the concerns that unethical users will take advantage of it, which may lead to a massive click fraud. However, if it is not disclosed, advertisers cannot verify or even dispute why they have been charged for certain clicks.

This problem lies at the heart of the click fraud debate and constitutes the main problem of the CPC model: it is inherently vulnerable to click fraud.

Page 21 poses solutions to the problem:

  • The ?trust us? approach of the search engines. The search engines can assure advertisers that they are doing everything possible to protect them against the click fraud. This is not easy because of the inherent conflict of interest between the two parties: the money from invalid clicks directly contribute to the bottom lines of the search engines. Nevertheless, it may be possible for the search engines to solve this trust problem by developing lasting relationships with the advertisers. However, the discussion of how this can be done lies outside of the scope of this report.  
  • Third-party auditors. Independent third-party vendors, who have no financial conflicts of interest, can work with advertisers and audit their clickstream files to detect invalid clicks.

These two approaches would still constitute only a partial solution to the Fundamental Problem because there is no conceptual definition of invalid clicks that can be operationalized.

Page 21 continues on looking at how Google does click fraud detection, covering a range of general preventative measure and more active things done when clicks actually happen.

On page 23, a look at filtering systems begins, ending with this summary that's positive for Google, at the moment. It also stresses that filtering will always come under new challenges:

The current set of Google filters is fairly stable and only requires periodic ?tuning? and ?maintenance? rather than a radical re-engineering, even when major fraudulent attacks are launched against the Google Network. It also demonstrates that various recent efforts of the Click Quality team to improve performance of their filters produce only incremental improvements. Thus, the Click Quality team currently reached a stability point since additional efforts to enhance filters produce only marginal improvements.

Having said this, the Click Quality team also realizes that this is only a local stability point in the sense that major future modifications in clicking patterns of online users and new types of fraudulent attacks against Google can lead to radically new types of invalid clicks that the current set of filters can miss. Therefore, the Click Quality team is working on the next generation of more powerful filters that will monitor a broader set of signals and more complex monitoring conditions. These new filters will require a more powerful computing infrastructure than is currently available, and the Click Quality team also participates in developing this infrastructure. Their overall goal is to make click spam hard and unrewarding for the unethical users thus making it uneconomical for them and turning many of them away from Google and the Google Network.

At page 28, the expert notes that Google's filters are relatively simple in nature, yet they work:

The structure of most of Google?s filters, with a few exceptions, is surprisingly simple. I was initially puzzled and thought that Google did not do a reasonable job in developing better and more sophisticated filters. I was initially certain that these simple filters should miss many types of more complicated attacks. However, the evidence reported in the previous two sections indicates that these simple filters perform reasonably well.

Why? A variety of reasons, such unsophisticated attacks:

Although some of the coordinated attacks can be quite sophisticated, the majority of the invalid clicks usually come from relatively simple sources and less experienced perpetrators....Still, there are certain types of attacks that Google filters will miss; but these attacks should be quite sophisticated and would require significant ingenuity to launch. Therefore, there cannot be too many of these, unless perpetrators become much more imaginative....

The Long Tail / Search Tail even gets a mention, with the idea being that -- if I understand correctly -- most activity focuses around the same type of things that the filters work well to detect. IE, the filters do well at cutting off the head of click fraud -- and if tail activity gets through, it's relatively little in comparison:

Despite its current reasonable performance, this situation may change significantly in the future if new attacks will shift towards the Long Tail of the Zipf distribution by becoming more sophisticated and diverse.

At the bottom of page 29, the report starts examining whether Google is letting stuff slide to earn more money:

Since Google does not charge advertisers for invalid clicks, this means that it loses money by filtering out these clicks. Thus, there is a financial incentive for Google not to forgo some of these revenues and simply be ?easy? Long Tail Left Part Frequency Rank 30 on filtering out invalid clicks. Therefore, it is important to know if any business considerations entered into the filter specification process or is it entirely determined by Google?s engineers in an objective manner with a single purpose to protect the advertiser base. This is one of the important issues that I investigated as a part of my studies of how Google manages detection of invalid clicks....

The conclusion is that Google isn't trying to favor itself:

I have spent a significant amount of time trying to understand who sets these threshold parameters, how, and what are the procedures and processes for setting them. In particular, I tried to understand if it is an entirely engineering decision that tries to protect the advertisers from invalid clicks or any of the business groups at Google are involved in this decision process with the purpose of influencing it towards generating extra revenues for Google.

As a result of these investigations, I realized that it constitutes exclusively an engineering decision with no inputs from the finance department or the business units, except the following two cases:

  • The first one was a special case when one particular IP address was disabled because of inappropriate clicking activities, and a business unit requested the Click Quality team to conduct an additional investigation since it was an important customer associated with that IP address, and restore it if the investigation results were negative. When I was explained what had happened, I felt that Google?s actions were reasonable in this particular situation.  
  • The change in the doubleclick policy that was considered in Winter 2005 and implemented in March 2005. It turned out that the change in the doubleclick policy (i.e., not to charge advertisers for the immediate second click in a doubleclick) had non-trivial financial implications for Google. Being a publicly traded company at that time, this change would have had a noticeable effect on Google?s total revenues with corresponding implications for the financial performance of the company. Therefore, this policy change had legitimate concerns for Google?s management, and these financial implications have been discussed in the company. Still, despite its noticeable negative effects on its financial performance, Google decided to abandon the old doubleclick policy and not to charge advertisers for the second click, which was an appropriate action to take.

In conclusion, with the exception of the doubleclick, I found Google?s processes for specifying filters and setting parameters in these filters driven exclusively by the consideration to protect the advertiser base, and, therefore, being reasonable.

Doubleclick constitutes a special case. For me, the second click in the doubleclick is invalid, as I argued in Section 8, and the advertisers should not be charged for it. It is not clear to me why it took Google so long to revise the policy of charging for doubleclicks. Nevertheless, this policy was revised in March 2005 despite the fact that the company lost ?noticeable? revenues by taking this action.

I find the conclusion that Google wasn't trying to benefit itself doesn't mesh well with the expert's own concern/confusion/uncertainty about why Google took so long to change its policy on doubleclicks. Moreover, that entire policy isn't well explained. Way back up on page 20, there's this very brief mention:

It turns out that Google had a history associated with the definition of a doubleclick: at some point doubleclick was considered to be a valid click and advertisers were charged for it, while subsequently Google reconsidered and treated doubleclick as invalid.

And that's it until the section later in the report, where Google's effectively accused of footdragging on changing its policy, where business discussions about the change were made, but Google then seems to be given the all clear because eventually it did the right thing.

The entire matter is something that feels like it should have been explored more, but page 31 sheds light as to why this might have been difficult. Google's apparently had a complete staff change in relation to click fraud detection since it began charging by the click:

In this subsection, I will describe the history of development of Google filters. First of all, I would like to point out that most of the descriptions in this subsection are not based on documents provided to me by Google but rather on the verbal descriptions by the members of the Click Quality team based on their recollections of the past events and on the ?folklore? evidence since none of the team members I interviewed were even around or involved in the click fraud effort when the AdWords program was introduced in February 2002.

The section continues with detection divided into these groupings -- and I've bolded a key part:

  • The Early Days (February 2002 ? Summer 2003). These were the early days of the PPC model and of the click fraud characterized by extensive learning about the problem and determining ways to deal with it.  
  • The Formation Stage (Summer 2003 ? Fall 2005). This stage started with the introduction of the AdSense program in March 2003, formation of the Google Click Quality team in the Spring/Summer 2003, launch of new filters and the intent to take the invalid click detection efforts to the ?next level.? It ended with the development of the whole infrastructure for combating invalid clicks and the consolidation of Google?s invalid click detection efforts. This stage was characterized by significant progress in combating invalid clicking activities and developing mature systems and processes for accomplishing this task. Although the Click Quality team?s solutions were still not perfect, based on the information provided to me by Google, I reached the conclusion that the invalid clicking problem at Google was ?under control? by the end of 2005.  
  • The Consolidation Stage (Fall 2005 ? present). By this time, Google had enough filters and perfected them to the level when they would detect most of the invalid clicking activities in the Left Part of the Zipf distribution (see Figure 1) and some of the attacks in the Long Tail. They would still miss more sophisticated attacks 32 in the Long Tail, and the Click Quality team continued working on the neverending process of improving their filters to detect and prevent new attacks. The Click Quality team has also been working on enhancing their infrastructure and improving their processes....

What? Click fraud wasn't under control until the end of 2005, yet Google is said to have acted reasonably by the report? How does this make sense? The best explanation seems to be that as the report goes on, the author feels click fraud was an evolving problem, and that Google was reasonably reacting to prevent it even though it wasn't "under control" until the end of last year. In contrast, had Google been doing nothing, then it might have been deemed not to have been taking reasonable steps to gain control.

Page 32 looks at the early days and notes that for a year and a half, no new filters were added other than the three original ones that CPC-based AdWords started with. Why? Maybe click fraud was less understood at that time since it was so new (though Search Engine Watch was citing articles on the problem like this one from Wired as far back as 2001). That's one suggestion, along with Google having fewer resources, lacking the right infrastructure or click fraud being on a smaller scale. But these are all guesses, since as the author notes (again, I've bolded a key part):

Not a single person on the Click Quality team was either around or involved in the click fraud detection back in 2002. The only person from this era who is still at Google is on an extended leave and was not available for comments during my visits to Google.

It is hard to judge reasonableness of Google?s invalid click detection efforts between 2002 and summer 2003 because there is simply not enough information available for this time period for me to form an informed judgment about this matter. One exception is the doubleclick policy that I have described before. As I have already stated, the second click in the doubleclick is invalid in my opinion, and Google should have identified it as such well before March 2005 (however, the detection and filtering out the third, fourth and other subsequent clicks was there since the introduction of the PPC model, and advertisers were not charged for these extra clicks).

Again, I get confused by the report declaring that Google operated reasonably when it also states that it can't judge if it indeed acted reasonably for part of the claim period.

The middle period finds progress with far more confidence, as covered on page 33:

The Formation Stage (Summer 2003 ? Fall 2005). This stage started with the introduction of the AdSense program in March 2003 and the formation of the Google Click Quality team in the Spring/Summer 2003 (the first person was hired in April 2003 with the mandate to form the Click Quality team; several people joined the team during the summer of 2003, and the initial ?core? team consisting of Operations and Engineering groups was consolidated by Fall 2003).

During this time period, two new filters were introduced in Summer 2003 and one more in January 2004. These three new filters remedied several problems that existed since the launch of the first three filters and significantly advanced Google?s invalid click detection efforts. Besides the development of new and better filters, there was a separate effort launched to develop the whole infrastructure for doing the offline analysis of invalid clicks and managing customer inquiries about invalid clicks and billing charges.

Despite all these efforts, the new filters and the offline analysis methods still failed to detect some of the more sophisticated attacks (presumably from the Long Tail of the Figure 1) launched against the Google Network in 2004 and the first half of 2005. In response to these activities and as a part of the overall invalid click detection effort, Google engineers introduced some additional filters around Winter and Spring 2005, including the filter identifying the second immediate click in a doubleclick as invalid.

As a result of all of these efforts by the Click Quality team, a significant progress has been made in combating invalid clicking activities and developing mature systems and processes to accomplish this task. Although the Click Quality team?s solutions were still not perfect, based on the information provided to me by Google, I reached the conclusion that the invalid clicking problem at Google was ?under control? by the end of 2005.

And overall filtering is given this conclusion at the top of page 35:

Google put much effort in developing infrastructure, methods and processes for detecting invalid clicks since the Click Quality team was established in 2003. These efforts were not perfect since Google missed certain amounts of invalid clicks over these years and it adhered to the doubleclicking policy for too long in my opinion. However, click fraud is a very difficult problem to solve, Google put a significant effort to solve it, and I find their efforts to filter out invalid clicks as being reasonable, especially after the doubleclick policy was reversed in March 2005.

Page 35 then begins looking at "offline" or non-automated ways to find click fraud that's gotten past filters. By page 37, it gets into systems applied to review what happens on some AdSense sites:

Auto-Termination System is an automated offline system for detecting the AdSense publishers who are engaged in inappropriate behavior violating the Terms and Conditions of the AdSense program. It examines online behavior of various publishers and either immediately terminates or warns the publishers who are engaged in the activities that the system finds to be inappropriate.

Interestingly, the system is still relatively new, only about a year old, as explained on page 38:

The first prototype of the auto-termination system was built in the early 2005 and the system was launched in the summer 2005. Recently, Google has developed major enhancements to the current version of the auto-termination system deploying an alternative set of technologies.

Page 38 also starts a look at the manual review that the click fraud team does, with this positive summary coming on page 40:

I have personally observed several such inspections and can attest to how successfully they have been conducted by Google?s investigators. This success can be attributed to (a) the quality of the inspection tools, (b) the extensive experience and high levels of professionalism of the Click Quality inspectors, and (c) the existence of certain investigation processes, guidelines and procedures assisting the investigators in the inspection process.

However, using humans also poses a bottleneck, as covered on page 41:

My only concern with these manual inspections is about scalability of the inspection process. Since the number of inquiries grows rapidly, so does the number of inspections required to investigate these inquiries. As stated before, Google tries to automate this process by letting software systems do a sizable number of inspections. Still, the number of manual inspections keeps growing significantly over time, based on the numbers that I have seen. This means that Google has a challenging task of expanding and properly training its team of inspectors to assure rapid high-quality inspections of inquiries in the future.

Page 41 also revisits the tug-of-war between advertisers wanting more transparency and Google trying to protect against click fraud by giving too much information away:

One of the complaints about Google?s investigation system that I keep hearing is that Google is quite secretive and does not provide meaningful explanations of the inspection results neither to the advertisers nor to the publishers. After examining how their inspection systems work, I can understand this secrecy. If Google provides such explanations, then the unethical users can gain additional insights into how Google invalid click detection methods work and would be able to ?game? their detection methods much better, thus creating a possibility of massive click fraud. To avoid these problems, Google prefers to be secretive rather than to risk compromising their detection systems and the advertiser base.

And this interesting tidbit on how when someone gets kicked out of AdSense, advertisers apparently get refunds:

Finally, I would like to point out that when Google terminates an AdSense publisher, all the clicks generated at that publisher?s site over a certain time period (valid and invalid) are credited to the advertisers whose ads were clicked on that site....

How well are things going? That begins to be addressed at the bottom of page 41, and here's a key statement from page 42:

The number of inquiries about invalid clicks for the Click Quality team increased drastically since late 2004. However, the number of refunds for invalid clicks provided by Google did not change significantly over the same time period. Therefore, the number of refunds per inquiry decreased drastically since late 2004. Since each inquiry about invalid clicks leads to an investigation, this means that significantly fewer investigations result in refunds. This statistic can be interpreted in several ways. First, it can be an indication that Google?s invalid click detection methods have significantly improved over this time period and that reactive investigations do not find any problems when searching for invalid clicks. Second, this statistic can mean that Google tightened its refund policies and is less generous with its refunds than it used to be. Third, this statistic can mean that more advertisers are looking more carefully into their logs and are more suspicious about invalid clicks since this problem received wide attention in the media and the public discourse in general. Therefore, they may request Google to investigate suspicious clicking activities even if nothing really happened. I examined investigative activities of the Google Click Quality team and can attest that it consists of a group of highly professional employees who do their investigations carefully and professionally. Therefore, I do not believe in the second reason stated above. The third reason is quite possible since advertisers are indeed concerned about invalid clicks and request Google to investigate suspicious clicking activities more frequently than before. However, the number of inquiries increased so significantly that I would expect that the number of refunds would also increase somewhat. Since this did not happen, I attribute this effect to the fact that Google?s invalid click detection methods work reasonably well by now.

I've bolded the most important parts to me. The expert is saying that more advertisers are raising inquiries, probably because of increased concerns (which we know is the case from various surveys over the past two years) but that Google isn't refunding more. Nor is that Google just protecting itself, the expert says. To him, it's a case that the concerns aren't matching the reality. Click fraud -- bad clicks getting past Google -- do not appear to be on the rise.

Nor is click fraud getting past filters a major problem compared to the amount Google is proactively catching, the expert says:

The total amount of reactive refunds that Google provides to advertisers as a result of their inquiries is miniscule in comparison to the potential revenues that Google foregoes due to the removal of invalid clicks (and not charging advertisers for them).

Another interesting part is how Google is comparing traffic across its network to that from within Google.com, which is said to be a "gold standard" of a pure site. The network is said to compare well:

Another indirect piece of evidence provided to me by Google is that Conversions-Per- Dollar (CPD) rates on various partner sites of Google Network are not significantly lower than on their ?flagship? Google.com site. CPD is the statistic determining the number of conversions that occurred divided by the dollar amount spent on advertising. This statistic shows how effective advertising campaigns are for the advertisers. Since Google spent much effort over the past 4.5 years to make sure that Google?s AdWords program works reasonably well, it now serves as the ?golden standard? against which other programs are compared at Google. Since CPD numbers for other parts of the Google Network approach that of at Google.com, this is an indication that other advertising programs work as well as AdWords works on Google.com. Since other parts of the Google Network are affected by invalid clicking activities significantly more than Google.com, this is an indication to the Click Quality team that their efforts to combat fraud on other parts of the Google Network are as effective as on Google.com.

At the bottom of page 43 is an overall conclusion about that Google's doing a reasonable job with detection, as best as this scientist can tell. It also takes some slams at general reports of click fraud being widespread in the press as not being proven true or false yet. I've bolded the key paragraph for all this below:

As a scientist, I am accustomed to seeing more direct, objective and conclusive evidence that certain methods and approaches ?work.? Having said this, I fully understand the difficulties of obtaining such measures for invalid clicks by Google, as previously discussed in this report. Moreover, one can challenge most of the reports pertaining to invalid clicking rates published in the business press by questioning their methodologies and assumptions used for calculating these rates. Most of these reports would not stand hard scientific scrutiny.

Still, as a scientist, it is hard for me to arrive at any definitive conclusions beyond any reasonable doubt based on Points (1) ? (6) above that Google?s invalid click detection methods ?work well? and remove ?most? of the invalid clicks ? the provided evidence is simply not hard enough for me, and I am used to dealing with much more conclusive evidence in my scientific work.

Having said this, the indirect evidence (1) ? (6) specified above, nevertheless, provides a sufficient degree of comfort for me to conclude that these filters work reasonably well. Finally, this statement should not be interpreted as if I find Google?s effort to detect invalid clicks (a) unreasonable, or (b) not working reasonably well. It only states that Google did not provide a compelling amount of conclusive evidence demonstrating the effectiveness of their approach that would satisfy me as a scientist.

Finally, the measures (1) ? (6) above are only statistical measures providing some evidence that Google?s filters work reasonably well. This does not mean, however, that any particular advertiser cannot be hurt badly by fraudulent attacks, given the evidence that Google filters ?work.? Since Google has a very large number of advertisers, one particular bad incident will be lost in the overall statistics. Good performance measures indicative that filters work well only mean that there will be ?relatively few? such bad cases. Therefore, any reports published in the business press about particular advertisers being hurt by particular fraudulent attacks do not mean that the phenomenon is widespread. One simply should not generalize such incidents to other cases and draw premature conclusions ? we simply do not have evidence for or against this.

Page 44 has a section that restates conclusions in terms of economic aspects -- IE, any economic motivation for Google to hide or ignore click fraud:

First of all, most of the revenue that Google foregoes due to discarding invalid clicks comes from the filters since they identify most of the invalid clicks. The second source of the forgone revenues comes from the terminated AdSense publishers (as stated before, all the clicks made on the terminated publisher?s website generated over a certain time period are credited back to the advertisers regardless of whether they are valid or invalid). However, this second type of revenue is relatively small in comparison to the foregone revenues due to filters. The third source of the foregone revenues comes from the AdWords credits. However, these AdWord credits are miniscule in comparison to the other sources of foregone revenues. In summary, the most significant source of foregone revenues, by far, are Google filters. Hence their performance is the most crucial factor for the whole invalid click detection program (note that this observation does not mean that Google focuses mainly on this part of the invalid click detection program since other parts are also important)....

It makes no business sense for Google to go after these extra revenues and that the best long-term business policy for Google is to protect advertisers against invalid clicks. Policy reversal on the doubleclick is a good example of this. By not charging advertisers for the doubleclick since March 2005, Google lost a ?noticeable? amount of revenues. However, the revenues lost as a result of this action are insignificant in comparison to the revenues that Google risks to lose if it loses trust of the advertisers. Therefore, reversing the doubleclick policy makes sense not only from the legal, ethical and public relations point of view, but it is also a sound economic decision.

Finally, the beginning of page 46 gives this overall conclusion:

Google has built the following four ?lines of defense? against invalid clicks: pre-filtering, online filtering, automated offline detection and manual offline detection, in that order. Google deploys different detection methods in each of these stages: the rule-based and anomaly-based approaches in the pre-filtering and the filtering stages, the combination of all the three approaches in the automated offline detection stage, and the anomaly-based approach in the offline manual inspection stage. This deployment of different methods in different stages gives Google an opportunity to detect invalid clicks using alternative techniques and thus increases their chances of detecting more invalid clicks in one of these stages, preferably proactively in the early stages.

Since its establishment in the Spring and Summer of 2003 the Click Quality team has been developing an infrastructure for detecting and removing invalid clicks and implementing various methods in the four detection stages described above. Currently, they reached a consolidation phase in their efforts, when their methods work reasonably well, the invalid click detection problem is ?under control,? and the Click Quality team is fine-tuning these methods. There is no hard data that can actually prove this statement. However, indirect evidence provided in this report supports this conclusion with a moderate degree of certainty. The Click Quality team also realizes that battling click fraud is an arms race, and it wants to stay ?ahead of the curve? and get ready for more advanced forms of click fraud by developing the next generation of online filters.

In summary, I have been asked to evaluate Google?s invalid click detection efforts and to conclude whether these efforts are reasonable or not. Based on my evaluation, I conclude that Google?s efforts to combat click fraud are reasonable.

Posted by Danny Sullivan at 1:58 PM | Permalink

July 24, 2006

Judge Hears Objections To Google's Click Fraud Settlement

The Associated Press reports that now that the independent report is out, a judge will consider the fifty-plus objections to the Lane's Gifts v. Google settlement. The judge will hear out advertisers today and tomorrow before finalizing that settlement.

Posted by Barry Schwartz at 9:15 AM | Permalink

July 21, 2006

Independent Report: Google Click Fraud Detection Practices Are "Reasonable"

The Google Blog just posted the independent study on their click fraud detection practices that shows Google makes reasonable efforts to detect click fraud. The report was part of an agreement of the Lane's Gifts v. Google settlement and was performed by Dr. Alexander Tuzhilin, Professor of Information Systems at NYU. Obviously Google is pretty happy about this report and I didn't have time to go through the full 47 page report, but if you have time, I bet you as Search Engine Marketer can learn a ton about the AdWords system. Possibly, Danny will dig into this deeper next week.

Posted by Barry Schwartz at 2:34 PM | Permalink

July 18, 2006

Click Pirates Making A Mockery Of The Text Ad Space

Peter Da Vanzo uncovers a disturbing practice where there are people out there clicking on ads, with the sole desire to hurt advertisers and enrich themselves.

It is not simply a competitive thing or something large scale with normal cases of click fraud that we have reported in the past. There are people out there that I want to call "Click Pirates" who click on ads, knowingly and proudly, stealing from advertisers, plus they encourage others to join with them in this quest.

Peter pulled out remarks from these people in a thread (site seems to be down now) that include remarks such as,

Let's steal from the people with a lot of money, not ourselves?

?If it were illegal, they would be at my door to arrest me?

?The most of the persons who are clicking are there to get any money because they need, not only to made a hobbie from this. Most of the "policers" here forgotted it and are breaking hope for a lot of people when they do their witch hunt. I am so sad about that.?

The worse part is that this is becoming more organized, like underground click fraud gangs. They come together, steal from advertisers and split the loot.

Posted by Barry Schwartz at 9:03 AM | Permalink

July 17, 2006

Report: Click Fraud Rises in Q2 & High-Priced Keywords Click Fraud Rate At 20.2%

The Click Fraud Index issued an updated report on the state of click fraud. In the second quarter click fraud rose four points to 14.1 percent, compared with the Q1 results of 13.7 percent. In addition, this time they broke out click fraud rates in terms of high-prices keywords versus low-price keywords. For terms that cost over $2.00 per click, high-priced keywords, the click fraud rate is higher than the average, at 20.2 percent. Click fraud is less of an issue at Google and Yahoo, tier one providers at 12.8 percent but did rise from 12.1 percent in Q1. Tier 2 search providers was 20.3 percent vs. 21.3 percent in Q1 and Tier 3 search providers was 27.1 percent vs. 29.8 percent in Q1. Full release posted below...

FOR IMMEDIATE RELEASE Industry Average Click Fraud Rate Climbs in Second Quarter 2006 Click Fraud Rate for High-Priced Search Terms Tops 20.2 Percent SAN ANTONIO, Texas ? July 17, 2006 ? Click ForensicsÔ, LLC today released the latest industry Pay Per Click fraud figures for the second quarter 2006 from the search advertising industry?s leading independent click fraud reporting service ? the Click Fraud IndexÔ (www.ClickFraudIndex.com). The Click Fraud Index monitors and reports on data gathered from the Click Fraud NetworkÔ, which more than 1,300 online advertisers and their agencies have joined. Network members can track their online campaigns for click fraud free of charge. Key findings from data reported for Q2 2006 include: - The overall industry average click fraud rate was 14.1 percent, slightly higher than the average of 13.7 percent for Q1 - The industry average click fraud rate for high-priced search terms was 20.2 percent. High-priced terms are defined as terms that cost over $2.00. These high-priced terms often make up the majority of an advertiser?s total spend. - The industry average click fraud rate for companies running online advertising campaigns through: o Tier 1 search providers, such as Yahoo! and Google, was 12.8 percent vs. 12.1 percent in Q1 o Tier 2 search providers was 20.3 percent vs. 21.3 percent in Q1 o Tier 3 search providers was 27.1 percent vs. 29.8 percent in Q1 - The average pay per click term cost for the top key terms across the five biggest search advertising industries ? Retail, Financial Services, Health & Fitness, Technology, and Entertainment ? for Q2 was $4.51. This compares to $4.75 from Q1. - The greatest percentage of click fraud, over 88 percent, originated from within the U.S. and Canada. Outside North America, the greatest amount of click fraud originated from within India. Unwanted click activity originating from India increased 26 percent during Q2. ?One of the most interesting findings from our Q2 data was the difference between the overall average industry click fraud rate and the click fraud rate for the most expensive search terms,? said Tom Cuthbert, president and CEO of Click Forensics, LLC. ?For the first time, we have industry data that clearly shows what many have expected ? organizations purchasing higher-priced search terms are significantly more vulnerable to click fraud.? The Click Fraud Index publishes data collected from the Click Fraud Network (www.ClickFraudNetwork.com), the industry?s first independent third-party click fraud detection service dedicated to helping companies more accurately monitor their online advertising campaigns for Pay Per Click (PPC) fraud. Using CF Analytics?, a patent-pending click fraud detection technology, the Click Fraud Network allows advertisers to track their online campaigns for potential click fraud. The service is unique in that it monitors online campaigns for click fraud by correlating data collected from search provider campaigns and the advertisers own web sites ? providing the industry?s most accurate view of click fraud to date. The Click Fraud Index tracks and publishes industry click fraud data on a weekly and quarterly basis for specific search providers, industries and trends. Industries covered include Retail, Financial Services, Health & Fitness, Technology, and Entertainment. Individuals can access information from the Click Fraud Index at www.ClickFraudIndex.com. Advertisers can join the Click Fraud Network at www.JoinTheNetwork.com and monitor their individual pay per click campaigns for up to 100,000 clicks per month free of charge. About The Click Fraud Network More than 1,300 advertisers and agencies are currently members of the Click Fraud Network, which is the industry?s first and largest independent third-party service dedicated to helping advertisers, agencies and search providers monitor online advertising campaigns for click fraud free of charge. The network is comprised of a representative cross-section of online advertisers and interactive advertising agencies, including Fortune 500 companies and some of the world?s largest retailers, travel sites, financial services firms and pharmaceutical companies. Advertisers and agencies who wish to monitor online Pay Per Click advertising campaigns with up to 100,000 clicks per month free of charge, can sign up for the Click Fraud Network at www.JoinTheNetwork.com. About Click Forensics, LLC Click Forensics, LLC is the leading provider of third-party technology and services that help online advertisers, agencies and search providers to better identify and stop Pay Per Click fraud. The company runs the top independent click fraud detection service in the industry, the Click Fraud Network (www.ClickFraudNetwork.com), which monitors online advertising campaigns for click fraud free of charge. Click Forensics also provides and enterprise-class solutions to help advertisers with campaigns of 100,000 clicks or more per month track click fraud. More information on Click Forensics and its offerings are available at www.ClickForensics.com.

Posted by Barry Schwartz at 9:22 AM | Permalink

July 14, 2006

Google: No, We Don't Let Click Fraud Happen

We posted earlier about Google CEO Eric Schmidt quoted as saying click fraud was "self correcting" with an economic solution of "let it happen." Those quotes got the blogosphere buzzing. Google's now responded on its official blog in "Let click fraud happen"? Uh, no., to say that Schmidt was talking about hypothetical approaches to click fraud rather than what Google itself does. The post also links to the entire presentation, so people can watch and judge for themselves.

Postscript: I've had a chance to listen to the key part now (it begins at 31 minutes, 11 seconds into the video), and the context is important. Schmidt was specifically asked if there was an economic solution to click fraud, as opposed to a technological one.

The "great fun" comment he makes about click fraud for Google's engineers comes at 32:39 and is part of him saying immediately before this that Google "worries about [click fraud] a lot" and the fun is trying to say ahead of the challenge.

Then at 32:45, he says:

Let's imagine for purposes of argument that click fraud were not policed by Google, and it were rampant. Eventually, the price that the advertiser is willing to pay for the conversion will decline, because the advertiser will realize that these are bad clicks. In other words, the value of the ad declines. So over some amount of time, the system is in fact self correcting. In fact, that there is a perfect economic solution which is to let it happen. But because it is a bad thing, and because we don't like it and because it does, at least for the short term, create some problems before the advertiser sees it, we go ahead and try and detect it and eliminate it.

Postscript 2: Donna Bogatin in Challenge to Google's Eric and Shuman: Be real men, don't selectively hide the 'world's information' pushes back at Google suggesting things weren't in context in her original post.

Postscript 3 by Barry: Google has added a link back to Donna's original article this weekend. See the link at the top of Google's blog post in blue underlined, "quoting."

Posted by Danny Sullivan at 11:13 AM | Permalink

July 10, 2006

Eric Schmidt Claims The PPC Model is "Self-Correcting" In Terms Of Click Fraud

Donna Bogatin reports that Google's CEO Eric Schmidt claims that click fraud is "self-correcting." Meaning,

Eventually, the price that the advertiser is willing to pay for the conversion will decline, because the advertiser will realize that these are bad clicks, in other words, the value of the ad declines, so over some amount of time, the system is in-fact, self-correcting. In fact, there is a perfect economic solution which is to let it happen.

So the "let it happen" quote, in terms of Eric Schmidt saying let click fraud happen, has been buzzing through the blogging community. Schmidt writes off click-fraud as the "cost of doing business." Maybe he is just very confident of the new AdWords quality scoring?

Posted by Barry Schwartz at 8:07 AM | Permalink

July 5, 2006

Report: Advertisers Lost $800 Million To Click Fraud Last Year

The San Francisco Chronicle reports on a click fraud study that claims 14.6 percent of all clicks and $800 million worth of fraudulent clicks were charged to advertisers.

The study conducted by Outsell Inc., a market researcher in Burlingame, seems to have been a survey of "407 online advertisers representing a cross-section of U.S. business."

I do not know if this data is based exclusively on reports from these advertisers, or if advertisers were asked to guess the figures. The study claims that 75 percent of all advertisers say they are a victim of click fraud, 37 percent have or will reduce their PPC spend, $500 million was lost directly due to Google or Yahoo and of the 407, seven percent asked for refunds averaging $9,507 each. The full report is available for purchase at OutSell.

Postscript From Danny. I've now reviewed a copy of the report. Note that:

  • The study involved 407 advertisers, all US-based, targeting mainly business and consumer markets, all working full-time. Together, they are said to control about $1 billion in ad spending.  
  • Outsell says the cross section can be extrapolated. However, some degree of advertising is done by individuals who might be doing things like arbitrage (buying search traffic at low prices to send clicks to other contextual ads worth more). People like these and others probably aren't included in the report, yet they have an impact on any estimates.  
  • 27 percent say click fraud has caused them to reduce online advertising spending (though whether this is search spending; dropping contextual campaigns or something else isn't covered, nor is it covered if they have dropped with particular search engines, such as second or third tier players). Another 10 percent say click fraud is such a concern that they intend to reduce spend. So click fraud is impacting spend on 37 percent of those surveyed.  
  • In contrast, 31 percent said click fraud was a secondary issue or not an issue to them; 33 percent said it was a serious issue they felts providers are controlling. Combined, that's 64 percent who aren't saying they are impacted.  
  • Of those 27 percent that have reduced funding, on average, it was cut by 33 percent. But again, whether that was to cut spending on contextual ads (often considered search by advertisers and others, even though it is not) or to cut with particular search engines isn't said other than "the results are relatively evenly split between Google, Yahoo and 'others,'" said the report.  
  • Advertisers were asked themselves to estimate fraudulent clicks, meaning the amount billed for AFTER and refunds they've received. On average, this was a rate of 14.6 percent.  
  • The $800 million cited in the San Francisco Chronicle article comes from the report taking that 14.6 percent average and applying it to the entire estimated $5.5 billion search ad spend from 2005. Some problems with this being an accurate stat are:  
    • Advertisers might be off in their estimates  
    • The average rate might not be applicable across the entire spend. In some industries, it might be much higher -- while spend in those industries might be a small percentage of overall search ads spend. Or it could be the reverse.  
  • The $1.3 billion in the reports "Click Fraud Reaches $1.3 Billion, Dictates End Of 'Don?t Ask, Don?t Tell' Era" title comes from taking the $800 million figure and adding to it $500 billion, which comes from taking the $5.5 billion spend times 27 percent of advertisers who said they've reduced spending times the 33 percent average cut they've reported. Again, with all these averages, the actual amount reduced could be more or less. And while that additional $500 million is related to click fraud and thus part of the click fraud "problem," lumping it in makes it sound like $1.3 billion in click fraud is estimated, rather than the $800 million figure.  
  • The report also reports on the rate people ask for refunds -- 5.4 percent have asked Google; 2.9 percent asked Yahoo and MSN comes next at 1.5 percent. The vast majority of advertisers -- 92.9 percent -- haven't ask for refunds. The report notes this big discrepancy between those who say they've cut budgets because of click fraud (27 percent) or those who have estimated click fraud to be 14.6 percent of spend. It's an important point, because if this much money really is believed to be fraudulently billed by advertisers, why aren't they pushing in larger numbers for repayment? And how come half of them report they do no systematic analysis of click logs. How can estimates of click fraud from this half even be included to make an industry stat, if they've done no analysis of their own?  
  • As for refunds, Google by far had the best satisfaction rate, with 63 percent saying they were extremely or somewhat satisfied with actions.

Overall, there are some nice stats from the advertisers in this fee-based report. I found those about refund amounts paid and experiences with the search engines more interesting and probably much more accurate than the extrapolation of the overall click fraud rate of 14.6 percent or a figure of $800 million. The report doesn't leave me feeling those two figures are any more accurate than others that have been put out there.

Posted by Barry Schwartz at 1:07 PM | Permalink

July 3, 2006

Ending Click Fraud with Pay-Per-Percentage

In Pay-Per-Percentage vs. PPC, Shimon Sandler points out an interesting new paper from the folks at Microsoft Research - Pay-Per-Percentage of Impressions: An Advertising Method that is Highly Robust to Fraud (pdf)

As Shimon notes, the idea is that this type of advertising approach would be "immune to both click fraud and impression fraud," and would use something called "pre-fix match" instead of broad match.

The author of the paper is Joshua Goodman, who is a Principal Researcher, and the head of the Microsoft Learning for Messaging and Adversarial Problems (LMAP) team, and who has an impressive page of other publications listed on the Microsoft domain, including a recent one on Finding Advertising Keywords on Web Pages (pdf).

What does pay-per-impressions mean? Simply, someone can can for a percentage of all impressions for certain keywords or keyword phrases over a period of time.

In this system, an advertiser picks a keyword, e.g. ?cameras? and purchases, perhaps through bidding, a certain percentage of all impressions for that keyword. For instance, an advertiser might pay $1.00 to MSN Search. In return, the advertiser might receive 10% of all impressions for ?camera? for 1 week. What does this mean? It means that for 1 week, one out of ten times that someone searches for the word ?camera?, they will see the ad.

The number of real impressions that an advertiser receives would not be affected by the number of fake impressions. The paper describes how this mechanism would need to work to avoid impression fraud, and how a broad match-type of system could function under a pay-per-percentage type system.

The paper points out that if an pay-per-percentage system is adopted, that it wouldn't replace pay-per-click or pay-per-impression, but would rather be another choice that an advertiser can make. A method is described in the paper that would allow these types of systems to function side-by-side.

It also looks at something that the author calls "misinformation fraud" which is when a competitor performs searches to boost the apparent rate of search volume that an advertising system might display as indicative of how popular a word or phrase is, and affiliate fraud.

It's an interesting and thoughful paper, well worth a read if you use paid search to attract visitors to you web site. Thanks for pointing it out, Shimon.

Postscript: Donna Bogatin, from Digital Micro-Market also pointed this paper out on July 1st, and has an interesting post from yesterday asking Google to show that they are taking a stand against click-fraud in Click fraud prevention: The next great search engine differentiator?.

The Microsoft paper was published as part of a workshop last year sponsored by Yahoo, but really doesn't seem to have received much attention at the time, though Dr. Garcia (Orion) wrote about it at the Search Engine Watch Forums, along with other papers from the same workshop in December, in a post titled Searcher Perceptions & Paid Links.

Posted by Bill Slawski at 12:49 PM | Permalink

June 28, 2006

Yahoo Settles Clickfraud Lawsuit

A California judge has approved Yahoo's proposed settlement of a class action click fraud case brought against the company by Checkmate Strategic Group in June 2005.

Yahoo believes the settlement will cover all click fraud claims that have been filed against Yahoo, including a suit filed by Lane's Gifts and Collectibles in Arkansas last year against both Yahoo and Google.

The terms of the settlement include a cash payment of $4.95 million to plaintiffs' counsel and a provision that will allow advertisers to file a claim for Yahoo to investigate potentially fraudulent clicks back through January 2004. Yahoo will pay refunds to advertisers who file claims if it discovers evidence of fraudulent clicks.

"We're very pleased with the terms of the settlement," said Reggie Davis, associate general counsel for Yahoo. "We believe it's a reasonable and fair settlement."

What does it mean for Yahoo advertisers?

The cash payment is far less than the $90 million settlement Google agreed to last March to resolve the Lane's Gifts class action click fraud case. In that case, up to $60 million was allocated for credit to advertisers, while plaintiffs' council received $30 million.

The Yahoo settlement differs from the Google settlement in other ways, as well. Google is offering credit to advertisers, rather than cash refunds, with a cap of $60 million. Yahoo, by contrast, is offering cash refunds, and there is no ceiling on the amount it will refund if it finds evidence of click fraud, though the company is optimistic that the refund amounts won't be onerous due to the safeguards it has had in place.

Yahoo says it believes the favorable terms are due to the strong position it took maintaining that its proprietary system does a good job at protecting advertisers from click fraud. To bolster its position, Yahoo invited the plaintiffs' attorneys and their experts to meet with Yahoo's clickthrough protection team, examine its systems, ask questions and attend presentations to better understand the controls the company has in place to filter out questionable or fraudulent clicks.

Yahoo says that its clickthrough protection system has identified and not billed advertisers for billions of clicks during the past eight years, all the way back to the early days before Yahoo purchased Overture and its sponsored listing technologies. Clicks not billed for included obvious click fraud, but also other clicks that the company believed shouldn't be billed to advertisers (for example, blocked IP addresses, double-clicks, back browser clicks and so on).

Yahoo said that as part of the settlement it is taking five specific steps to combat click fraud:

1. The company is extending the claims period for advertisers suspecting fraudulent activity from sixty days to two and a half years, or back through January 2004. Yahoo will investigate all claims filed under this one-time extension and offer cash refunds to advertisers if it finds questionable activity.

Judge Taylor, a retired federal judge, will be overseeing the extended claims process. His role will be to ensure that Yahoo sticks to the agreed-upon process, and he will also be available to review advertiser appeals if they are not satisfied with the results of Yahoo's investigation.

2. The company plans to appoint a dedicated traffic quality advocate to act as ombudsman for advertisers. 3. Once a year Yahoo plans to host a panel of individual advertisers to tour the company's clickthrough protection headquarters, allowing them to ask questions and provide feedback. The company will also seek advice from this panel.

4. Yahoo plans to work with reputable third parties to develop an industry wide definition of click fraud, a list of recognized click bots, and take other measures to garner awareness of the issue and what's being done to combat the problem.

5. Yahoo plans to build a "traffic quality resource center" for advertisers, providing much more information about traffic quality, including extensive FAQs about the company's click-through protection methodology.

In addition, Yahoo said it is taking steps beyond the terms of the settlement to respond to advertiser needs.

"Advertisers are interested in understanding more about click through protection and click fraud," said John Slade, senior director, Yahoo! clickthrough protection. He said the company plans to provide advertisers with better visibility in turnaround time on complaints on click fraud, responding within a specified time frame.

He said Yahoo will also offer more clarity around refunds on click fraud, including additional detail describing more specifically what the company has found in refunds or credit notices—especially in better documenting the differences between click fraud and other traffic variances that might be misinterpreted as click fraud.

More information on the settlement in Yahoo's official press release, Yahoo! and Click Fraud: Our Commitment to Protecting Advertisers.

Posted by Chris Sherman at 8:24 PM | Permalink

June 15, 2006

SEMPO & Fair Isaac Team Up To Study Click Fraud

ClickZ reports that SEMPO and Fair Isaac have teamed up to study PPC click fraud. Fair Isaac is the organization that developed FICO scores to measure of credit risk, a service used by most credit agencies. ClickZ explains that the study will use several "artificial intelligence methods to determine the extent of click fraud and to develop a solution for the search marketing industry," developed by Fair Isaac.

Posted by Barry Schwartz at 9:17 AM | Permalink

June 14, 2006

Clickbot.A Click Fraud Network Dismantled

ClickZ reports that the Clickbot.A virus that infected 34,000 machines (last report more than 50,000 PCs) and auto clicked on an unknown amount of PPC ads, has been shut down. Panda Software and RSA Security worked together to dismantle the virus. Read the full details over at Panda Software.

Posted by Barry Schwartz at 9:01 AM | Permalink

June 1, 2006

Google Click Fraud Settlement: Why One Online Merchant Is Opting Out

Radiator.com is a company spotlighted in a recent Associated Press article about the proposed settlement of a class action suit against Google over click fraud. Radiator.com Boiling over Bum Clicks from Multichannel Merchant takes a closer look at Radiator.com's experience with alleged click fraud and why the company plans to just say no to the settlement.

The story details how Radiator.com didn't feel Google took seriously its claims, ironically despite also having used the company has a success story for AdWords. From the article:

The result, Thys says, was a boilerplate e-mail message from Google?s quality enforcement team informing him that the company had concluded, after examining his data, that it had caught those bogus clicks before he was charged for them and therefore that he had no fraud credits coming. The message contained no itemized details about the data Thys had found suspect. ?They simply said, ?Thanks for the data, and by the way, our algorithms are smarter than you, and we?ve determined these clicks were filtered out already.??

To add insult to injury, the e-mail was signed simply ?Ray?. ?No last name, no phone number, no e-mail address,? Thys says. ?To me that was insulting. We were spending upwards of $20,000 a month with Google almost since they started selling PPC ads. We followed their reporting procedure. Getting that kind of result didn?t sit too well with me.

While opting-out of the settlement, the company has no plans to join another lawsuit or start a new one. Instead, it hopes for an expanded pay-per-call system, something Google is testing:

What would make Thys feel better about running performance ads on the big search engines?

?Calls,? he says. ?I?m begging for Google to expand their distribution network with pay-per-call.? His company has run a small program on the network operated by pay-per-call provider Ingenio and seen some good results. The model makes perfect sense for radiator.com, which after all began life as 1-800-Radiator and operates its own CRM call center.

Posted by Detlev Johnson at 12:29 PM | Permalink

May 22, 2006

Google Sends Settlement Notices In Click Fraud Class Action Case

Google has now sent out notices to advertisers advising them of their rights in the proposed settlement in a class action case over click fraud filed against Google by Lane's Gifts. Information is available on the cicksettlement.com site that Google is directing people to. That's where people will go to make a claim beginning June 19. The site also explains how to opt-out of a claim or object to the proposed settlement.

From the announcement by Google in the Inside AdWords blog:

Now that the preliminary settlement has been approved by the Court, all members of the class are being notified about the settlement. On May 19 and 20, 2006 (PST), a settlement administration firm sent an email notification (from clicksettlement@xmr3.com and with the subject 'Important Legal Notice Regarding Your Google AdWords Account') to all advertisers who purchased online advertising from Google between January 1, 2002 and the present.

I recommend that you carefully review the information in the email and visit the site provided by the administration firm: www.clicksettlement.com. On the site, you will find links to the official settlement notice and settlement FAQs, both of which are in .PDF format. To view these documents, you will need Adobe Acrobat Reader.

As we have said in the past, we work hard to manage the issue of invalid clicks, and continue to be very effective in detecting and filtering them in order to deliver outstanding ROI to our advertisers. The vast majority of invalid clicks are detected and filtered out before they reach our advertisers' bills; if advertisers detect additional invalid clicks, our click quality team investigates and provides refunds as appropriate. You can read more information about invalid clicks and how we manage them here and in the AdWords Help Center here."

Advertiser Files Complaint To Block Google Click Fraud Settlement and Advertisers To Get Notices From Google In Click Fraud Settlement Later This Month from us earlier this month cover how not everyone is happy with the proposed settlement.

Want to comment or discuss? Visit our Search Engine Watch Forums thread, Google Sends Out Class Action Settlement Info -- Do It Or Not?

Posted by Barry Schwartz at 9:30 AM | Permalink

New Click Fraud Bot Exploiting 34,000 PCs & Hundreds Of Advertisers

Help Net Security reports that PandaLabs discovered a bot named Clickbot.A, which infected 34,000 computers. The Clickbot.A automatically clicks on search ads, costing advertises hundreds of dollars (or more) for invalid clicks. This clicks act as if they are real, in nature, since they are on 34,000 different machines, on different networks, and are being instructed to the style of search ad clicking they should take. So it may look as if the clicks are valid, when they may not be. Jen will be posting more details later about this case, for now you can get more information at Help Net Security.

Posted by Barry Schwartz at 9:15 AM | Permalink

May 15, 2006

Snap.com's New User Interface & Adds New Features

Snap.com has released a new user interface for its search results page. As you begin typing your query, it does the whole Google Suggest, LookAhead, AllTheWeb LiveSearch auto complete suggested query thing. Then you submit your query and the interface snaps (literally) into a two column view. On the left are the search results and on the right is a preview of the landing page of the result selected on the left. This is a more, in your face approach to Ask.com's Binoculars, that allows you to mouse over to see a site preview. For the full release, download the PDF document.

Postscript From Danny: See also Upstart search engine blurs the lines of advertising from the Associated Press, which covers issues raised over whether Snap is doing proper disclosure of paid listings. Meanwhile, Overture Founder Starts Pay-Per-Action System from the San Jose Mercury news covers the move to a cost-per-action payment system for ads.

Posted by Barry Schwartz at 10:27 AM | Permalink

May 11, 2006

Advertiser Files Complaint To Block Google Click Fraud Settlement

One Google advertiser is making a very formal rejection of the proposed Google click fraud settlement -- he's filed a complaint to try and block the agreement, and this before notifications from Google have even gone out.

Let's go back, then forward. It was announced last March, given preliminary approval by the judge in April, and now Google is supposed to notify advertisers about the settlement by May 20. To date, I've not seen or heard anything about notices going out.

Last week, I wrote in Advertisers To Get Notices From Google In Click Fraud Settlement Later This Month more about how advertisers will need to opt-out of the settlement, if they don't like it -- and how at least one was against it.

Ex-Google Advertiser Sues Over Settlement from the Associated Press today covers how a different advertiser is also against it, to the point of having filed a formal complaint asking that the case be blocked.

For its part, Google issued a statement saying the complaint is may be motivated "more by the quest for attorney fees." Of course, the same could be said about the case being settled for what many feel is a cheap price, $90 million -- 1/3 of which will go to attorney fees.

Want to know more about the proposed deal? The agreement is here (PDF), and the order giving preliminary agreement is here.

Meanwhile, the law firm pushing for advertisers to stay out sent this release to me today:

DON'T FEAR GOOGLE, SAY CLICK FRAUD ATTORNEYS; ADVERTISERS HAVE ONLY DAYS TO OPT OUT OF CLICK FRAUD CLASS ACTION SETTLEMENT

LOS ANGELES, CALIF.--Advertisers have only days to opt out of a click fraud settlement agreement negotiated between Google and attorneys representing Google advertisers (Lane?s Gifts and Collectibles LLC, et al., v. Yahoo! Inc., et al.). Of the $90 million proposed settlement, $30 million will go to plaintiffs' attorneys. Only a fraction of the remaining $60 million will be distributed to Google advertisers, says Dylan Pollard, a Los Angeles-based plaintiffs' click fraud attorney, giving advertisers less than a penny for every $100 they can prove is lost through future click fraud abuses while advertising with Google.

"Advertisers must decide: take the pennies offered by Google and be happy with the status quo or opt out and pursue legal restitution through a lawsuit," says Pollard. "Either way, they don't have much time to decide."

Pollard and attorney Shawn Khorrami have created a website, http://www.clickfraud-legal-center.com/ that includes a sample opt out letter for advertisers.

"Advertisers could very well decide to absorb their losses and hope Google cleans up its act. Google is so powerful, advertisers may be afraid to challenge the company," explains Khorrami. "But if advertisers want to try to get their lost dollars back, the current settlement proposal isn't for them; previous losses are not addressed in the settlement. To try to obtain compensation from past click fraud abuse with Google, advertisers need to be pro-active. To start the process, they must opt out of the proposed settlement."

For further information on the Google settlement and advertiser options, advertisers can go to http://www.clickfraud-legal-center.com/ or call 866-546-7266

Keep in mind that you don't have to opt-out through this site. In fact, it's difficult to opt-out when Google doesn't appear to have even sent settlement notifications yet. I'm checking on the situation with that and will postscript.

Posted by Danny Sullivan at 7:11 AM | Permalink

May 5, 2006

Advertisers To Get Notices From Google In Click Fraud Settlement Later This Month

Google Proposes $90M Settlement from the Associated Press is a general update on the status of the proposed click fraud settlement with Google. It was announced last March, given preliminary approval by the judge in April, and now Google is supposed to notify advertisers about the settlement by May 20. Then advertisers will have until late June to reject or protest the proposal. Final approval, if granted, will come in late July.

One company cited in the AP article has already decided to reject the offer, and attorney Brian Kabateck, whose firm Kabateck Brown Keller is involved in a separate potential class action suit involving Google, also objects to it.

Google Condemned For Click-Fraud Settlement from InformationWeek has a deeper drill-down on that. The separate case was filed in California, and a stay against it proceeding further is in place until the Arkansas-based case is resolved.

Kabateck also put out a press release (PDF) last month after the agreement was granted preliminary approval, alleging that click fraud victims would be getting only a half-cent for every $1 in fraud and that the $60 million in credits might be much less if the click fraud rate is determined to be lower, among other things.

Separately, I heard from another attorney in the case, from the firm of Chitwood Harley Harnes, who passed along this letter (PDF) that was sent on behalf of his plaintiff, Advanced Internet Technologies, by the firm of Mercy Carter Tidwell. It also asks that the judge not grant the approval, explaining in more detail the "pennies on the dollar" argument.

Postscript Barry: I was sent the official documents and agreements for the case. The agreement can be downloaded as a PDF document by clicking here and the order can be downloaded by clicking here.

Posted by Danny Sullivan at 9:38 AM | Permalink

May 3, 2006

Class Action Fraud Suit Filed Against Yahoo Over Adware & Domain Distribution

Via Threadwatch, Suit Levels Spyware, Typosquatting Allegations at Yahoo at the Washington Post covers a class action lawsuit filed against Yahoo and others claiming "syndication fraud" over how Yahoo ads are allegedly displayed through spyware, adware and domain parking programs that involve "typo domains."

Ben Edelman, who has authored a number of reports on this subject such as this recent one, now jumps from researcher mode to being one of the attorneys in the case.

A copy of the filing is here (PDF format).

Postscript Barry: Eric Goldman has a much more comprehensive write up from a legal perspective on this case at his blog.

Posted by Danny Sullivan at 9:13 AM | Permalink

April 28, 2006

Are You A Click-O-Phobic?

This morning I wrote about ad click-o-phobia, a new condition setting in with publishers. Basically, publishers that have contextual ads (AdSense, YPN, etc) on their pages are not allowed to click those ads. Hundreds of publishers have been banned from clicking on their own ads and this resonates with the publishers, so much so that some of them are afraid to click on any ad - not even their own. Heck, I'll be honest, I subconsciously do not click on contextual ads, because I am trained not to click on my own. I suffer from click-o-phobia!

Posted by Barry Schwartz at 9:53 AM | Permalink

April 21, 2006

Judge Approves Class Action Lawsuit Settlement of $90 Million

News.com reports that a judge from Arkansas has approved the $90 million settlement issued between Google and Google AdWords advertisers. Of the $90 million, $60 million will go to the advertisers and $30 million will go to the lawyers. Google said, "We are pleased that we were able to reach an agreement and are pleased the judge has granted preliminary approval." Of course they are pleased, this is a great outcome for Google.

Posted by Barry Schwartz at 11:10 AM | Permalink

April 18, 2006

New Click Fraud Index Aims To Quantify Click Fraud Rate

Elinor Mills points to a new Click Fraud Index service that reports click fraud rate among those monitoring through its network to be 13.7 percent. The big caveat to keep in mind is that this rate only takes into account data from those who are part of the Click Fraud Network, which is backed by click fraud auditing company Click Forensics. The company does say this one the Click Fraud Index page, but despite this, some might assume the figures represent an industry-wide estimate.

The company says it has hundreds of advertisers enrolled, but who exactly these are isn't listed. If many advertisers are in competitive, high risk areas, that could potentially drive click fraud rates higher than the industry norm (whatever that is -- no one really agrees on a figure). Or it could drive the figure lower, depending on the make-up. But without having a good breakdown of the network, it's hard to take this figure alone as proof of the state of the entire industry.

The rate is said to be less at top-tier search engines such as Google and Yahoo, accounting for 12.1 percent. As you step down the tiers, the click-fraud rate estimates increase, with 2nd tier PPC engines at 21.3 percent, and 3rd tier PPC engines realize a 29.8 percent click fraud rate.

Postscript: Tom Cuthbert, president and CEO of Click Forensics emailed:

I wanted to take a moment and answer some of your concerns. You first mention that the Click Fraud Index, "estimates the industry wide click-fraud rate". We make no claim that the data reflects an industry of over 400,000 advertisers. In fact, the text below the graph on the Click Fraud Index home page says, "Derived using average threat level across all industries and keywords monitored by the Click Fraud Network?. Threat Level is identified as having a high attribute rating score as measured by the Click Forensics? rating engine using data provided by members of the Click Fraud Network?".

Our network is only a few weeks old and the numbers are growing rapidly. We do not release information until we have reached statistical significance. For example, we will eventually be releasing threat level data by vertical markets and specific search provider statistics.

You are rightly concerned about who these advertisers are. You commented that, "...but who exactly these are isn't listed." We protect the privacy of the members of our Network. In fact, our privacy policy states that we will not release their names without permission. The Network members include some prominent advertisers and agencies. I am happy to speak to you personally about our member profile offline. Many are your readers and companies you will recognize.

I thought it might be helpful if I give you an overview of our approach. Click Forensics definition of click fraud is the combined scoring of three (3) sets of attributes; technical, behavioral and Market (economic). We add to that the collective intelligence provided by the Click Fraud Network member data. Each click is scored by our algorithm and flagged in a high, medium or low threat level. The total number of clicks falling into the high threat level is the number we report on the Click Fraud Index site.

To improve the accuracy of our rating engine, Click Forensics is working with Dr. Alexander Tuhzilin from NYU to further enhance our statistical modeling approach. The company has a goal of producing reports with the highest degree of accuracy in the industry. Dr. Tuhzilin said, ?Click Forensics has good data and this is a source of their advantage over the search engines. My role is to work with them to refine the scoring methodology to improve accuracy. Their approach is to incorporate as much data as possible to improve accuracy. The search providers simply don?t have enough data to have the most accurate approach.??

One other key point so that the CFN aggregate number is not misleading. We are counting number of high threat clicks. Bear in mind that the average cost per click for a high threat level click is three to four times higher than low threat level clicks. This should be obvious because of the economic factors involved? the more expensive the click and therefore more competitive the category? the greater likelihood for click fraud. Therefore even if only 10% of clicks fall into the high threat category, the dollar value could be well over 20% of the money spent.

I hope you would consider my feedback and invite your readers to take part in the Click Fraud Network. We are providing our CF Analytics tool for free, a point you failed to mention! This product scores up to 100,000 paid clicks per month and provides summary and detail reports. This is a great service for the thousands of advertisers trying to catch click fraud.

I agree with you, "...it's hard to take this figure alone as proof of the state of the entire industry." While that is clearly not what we are saying at this point, it is a goal. As I mentioned, the more the Network grows the more accurate the data will become. This is an industry problem and I invite you to join our efforts.

Thanks, Tom! Bad wording on my part, and my apologies. I didn't mean to say the the Click Fraud Index was offering up an industry wide statistics. I meant only to highlight that the data is specific to your particular network only, as you correctly point out.

Meanwhile, another reader who specializes in click fraud analysis writes:

These figures have to be vetted - how are they calculating the percentage, i.e. what does that represent?

For example, if 30% of the universe of all PPC clicks are fraudulent, and the publishers "catch" and don't bill for half of that 30%, then we would see 15% of advertiser traffic that is being billed for as fraudulent. Is that the figure they're talking about?

Or, is the percentage of fraudulent clicks 15% of the entire universe of clicks? And if so, then what percentage of those clicks are being billed for, and what aren't?

Also, how are they defining "click fraud"

So much methodology to vet.

What do readers think? Please come over and comment in our Search Engine Watch Forums thread, Thoughts On New Click Fraud Index & Network?

Posted by Danny Sullivan at 5:28 PM | Permalink

April 4, 2006

Adware Said To Generate Fake Clicks On Yahoo Search Marketing Ads

Ben Edelman lets us know about his latest study, The Spyware - Click-Fraud Connection -- and Yahoo's Role Revisited, which looks at how adware is said to be generating fraudulent clicks on Yahoo Search Marketing ads. Adware vendors are said to be placing Yahoo ads into their programs, which then generate clicks without the computer user being involved. Ben has documented several examples of this, including full packet logs, annotated screenshots, and videos.

Posted by Barry Schwartz at 10:28 AM | Permalink

April 3, 2006

Trust Me, I'm A Jedi Scientist -- Those Aren't The Fraudulent Clicks You Were Looking For

Nice catch by Threadwatch, Click fraud concerns bruise Google from Bloomberg, where Google CEO Eric Schmidt is quoted saying to trust him, as a computer scientist, Google can stop those bad clicks:

Believe me, as a computer scientist, we have the ability to detect the invalid clicks before they reach advertisers.

Then again, Google's about to settle a click fraud class action suit for $90 million. I'd agree with the Google view that the sum is much smaller than some would estimate click fraud to be. But it's still a large amount, and one that suggests Google's click fraud kryptonite isn't as foolproof at Schmidt suggests.

In fact, the quote needs a big heaping dose of perspective:

  • Google (and Yahoo and others) already have lots of click fraud detection in place and do indeed catch a lot of fraudulent clicks.  
  • Google (and Yahoo and others) don't catch everything, whether they have computer scientists on staff or one actually running the company.

Indeed, if Google's system was perfect, they wouldn't need to have any appeal or review period at all. They do. In fact, they flat out open the possibility they won't catch everything:

If we find that invalid clicks have escaped automatic detection, you'll receive a credit for those clicks.

Again, Google's view is only a small amount might escape their review process, as it blogged recently. But that same post -- unlike Schmidt's comment -- also admits that some invalid clicks do indeed reach advertisers:

When we believe those clicks are invalid, we reimburse advertisers for them. Some invalid clicks do make it through our filters, but we believe the amount is very small.

Schmidt might have had other comments going along with his quote, of course. He might have qualified it in some way that didn't make it to the story. But to me, the answer isn't that Google gets perfect in stopping all invalid clicks before billing. The answer is keeping the amount as low as possible and actively working with advertisers and third parties to ensure there's better defense and support for even that small amount that will inevitably get through.

Posted by Danny Sullivan at 11:40 AM | Permalink

March 28, 2006

The Latest Click Fraud Roundup

Google might be about to settle a click fraud case, but the issue remains very much in the minds of the major media. NPR aired a story on the issue last night providing a nice overview for the audio-inclined. Xeni Jardin who did the piece describes it a bit more here; I was one of the people she talked with. Beyond NPR, both BusinessWeek and the Washington Post have had long pieces as well. If you're a Search Engine Watch member (thank you), the longer version of this post goes into more depth to review both of those, along with some other click fraud articles out there.

Posted by Danny Sullivan at 10:00 AM | Permalink

March 16, 2006

Forbes Discusses Impression Fraud And Impact On Google's Outlook

I was a bit surprised to read an article at Forbes with the title Google Faces Potential Pressure From Impression Fraud. Impression fraud is different from click fraud, in that Google is measuring ad views and not ad clicks. Impression fraud is an issue at Google because Google uses a "Quality Score" to determine the ranking of the ad.

The quality score is made of your cost per click and your click through rate (plus some other criteria that is not 100% clear to me). The click through rate is based on the number of clicks you receive for an ad and the number of views. So the more ad views, impressions, your ad receives and the less clicks you get on that ad, the lower you quality score is, the lower your ad ranks in the AdWords system.

Bear Stearns, a worldwide investment banking and securities trading and brokerage firm, kept Google's stock at an "outperform" rating due to impression fraud and the impact it can have on lower the price of keywords. In reality, the keyword prices are not directly affected by impression fraud, it is however less expensive for some advertisers to our rank their competitors. How interesting is it that Wall Street knows about impression fraud?

Posted by Barry Schwartz at 8:37 AM | Permalink

March 9, 2006

Google Explains Invalid Clicks

Google has rarely spoken publicly about click fraud issues surrounding their Google AdWords program, even with the publicity it has received of late and today's $90 million class action settlement. So an Inside AdWords blog entry detailing many of the frequently asked questions advertisers have about click fraud and invalid clicks was a surprise, as was the Google Blog entry about the specific settlement details.

While there is nothing unexpected revealed in the two blog entries, there were some interesting quotes from them, namely one regarding percentages of click fraud and their look into an often-quoted figure that 30% of clicks are fraudulent.

So, the 30% figure comes from analysis of a *single* ad campaign, not a study of many. This means that the figure of 30% that is used to characterize click fraud for the whole search and advertising industry comes from the analysis of *one* ad campaign looked at for ten days.

However, this is not the only figure in the 30% neighborhood that has gotten publicity last year. A 38% figure was quoted by Click Defense in conjunction with their own lawsuit. However, that figure has also come under question since it was also used in promotion of the Click Defense click fraud detection software (and Click Defense has since withdrawn as lead plaintiff in the case).

Google also tries to make clear the differences between fruadulent clicks and invalid clicks.

The term "fraud" implies deliberate deception. Our aim in fighting invalid clicks is broader and includes clicks that we suspect may have been deceptive or malicious, as well as clicks that we deem invalid for other reasons, such as accidental double clicking on an ad. The usage of the word "fraud" in this context has caused a great deal of confusion, as it's practically impossible to "prove" that an impression or click was caused by deliberate deception. Our servers can accurately count clicks on ads, but we cannot know what the intent of a clicking user was when they made that click. When we identify a click as invalid, it simply means a click we won't charge for, in order to deliver the best ROI to advertisers.

It is also worth noting that Shuman Ghosemajumder, the Business Product Manager for Trust & Safety providing the answers for the Inside AdWords blog, spoke last week at Search Engine Strategies in New York City specifically on the issue of click fraud. He also discussed the fraudulent clicks versus invalid clicks quite clearly, since there definitely has been confusion in the mainsteam media with the two terms acting interchangeably. You can find the write-up of the "Auditing Paid Listings & Click Fraud Issues" session here, which both Google and Yahoo! participated in.

And for a more detailed look on all aspects of this click fraud settlement and its implications, click here.

Posted by Jennifer Slegg at 12:17 AM | Permalink

March 8, 2006

Google Click Fraud Settlement Story Updated

Just a quick note that my original post, Google Agrees To $90 Million Settlement In Class Action Lawsuit Over Click Fraud, has been substantially updated with comments from Google, an attorney on the case against Google, a Yahoo statement and more information. It's worth stressing a point I'm seeing lost in some other stories and comments. This settlement isn't $90 million for the lead plaintiff, if approved. It covers all parties in the class action, which are ALL Google advertisers in the US. For that price, Google looks to be effectively ridding itself of click fraud claims going back to when it started cost-per-click pricing in 2002. More in my previous story on that.

Posted by Danny Sullivan at 9:38 PM | Permalink

Google Agrees To $90 Million Settlement In Class Action Lawsuit Over Click Fraud

Search Engine Watch has learned that Google has agreed to a $90 million settlement fund in the class action lawsuit filed by Lane's Gifts & Collectibles that came to light last April (see also this for background). We're working on getting details about who will be considered eligible for payment as part of the class, exact details and other information, so expect more to come and be postscripted here.

Postscript 1: Google sent this statement:

We are proposing a settlement with the plaintiffs in this case. The proposal would allow advertisers to apply for credits for clicks they believe were not valid. Specific details of the settlement will remain confidential until it is presented to the judge. We do not know how many advertisers will apply and receive credits, but the total amount, including the legal fees determined by the judge, will not exceed $90 million.

Google's also posted a much longer statement on its blog here. It covers that the judge still needs to approve the settlement, which would allow any Google advertiser to apply for credit involving questionable clicks from 2002 through the official settlement date. Specifically, it would be credit to buy new advertising given, not a refund.

Postscript 2: I've now talked with Steve Malouf, one of the lead attorneys on the case against the search engines. Here's a rundown on main points from him:

Why Settle? Given Google's overall revenue, along with some high estimates of click fraud, why not fight for more? "Within the context of the risk that each party faces of losing, it was a reasonable settlement,? Malouf said.

Protection From Click Fraud Going Forward: What's going to prevent future cases like this? Malouf said it was a combination of giving more data to advertisers along with more third-party assistance.

"They could all do a better job in terms of transparency and providing a more robust data set to perform analytics," Malouf said. "The solution going forward is going to be an industry solution, with transparency in the form of a third party or several third parties to help advertisers with auditing."

Postscript 3: I've now spoken with Nicole Wong, associate general counsel at Google with some follow-up questions. Here's a rundown on main points:

Other Engines Involved: Some of the other search engines named in the suit were involved because they carried Google's ads. Are they excused from it as part of the settlement? Wong said Google couldn't comment on this yet. I suspect this will likely be the case. Services named in the suit that are or were part of Google's network include AOL (and Netscape), Ask, Lycos and possibly LookSmart. Yahoo and Miva (formerly FindWhat) have never carried Google's ads, so they seem unlikely to be excused.

Protection From Other Suits: It's possible if not likely to my understanding that if this settlement is approved, it will resolve all click-fraud related claims now or being considered during the period from when Google began offering pay-per-click ads in February 2002 through when the settlement is approved (that will probably happen in the coming weeks). That would include another suit already underway in California. Google said it couldn't comment to confirm this however. I expect we'll see some more articles that will explore this aspect to appear in the next day or so.

Protection Going Forward: What prevents more claims happening going forward? Wong said Google believes the 60 day window it allows for claims to be reviewed, along with more proactive and responsive help for advertisers, will be a good preventative.

"What we will do going forward is to continue to fight click fraud or invalid clicks to ensure our advertisers are happy," Wong explained. "We're getting better at it and we are more proactive than we were when we launched the program. We take that responsibility seriously."

Issues With Non-US Advertisers Not Resolved: To date, Google's had no lawsuits over click fraud filed outside the US. However, it has a number of non-US advertisers. Will this cover those? Google said they couldn't comment on this, at the moment.

Why Settle? Google's explained what's involved with the settlement, but why do it at all? Afraid they might lose and face a bigger payout? Decide it was easier to pay and get the issue resolved?

"We believe the problem is small and well managed, and we think that the settlement is a very good and fair outcome for everyone," Wong said:

The why answer seems a no brainer for me. A $90 million settlement, compared to Google's revenues, is cheap to get this particular issue resolved. It seems likely to buy an out from all potential cases going back for years. Compared to the estimated $260 to $290 million Google spent to resolve a patent lawsuit with Yahoo, this deal seems an especially cheap, smart one to take.

Postscript 4: I asked Yahoo if it was seeking a similar settlement. It responded with this statement:

We cannot comment on Google?s reported settlement. That said, we stand firmly by our proprietary click protection system, and look forward to vigorously defending our position in this matter

Postscript 5: To my knowledge, the only other settled class action lawsuit we've had involving a search engine to date was that against LookSmart. As with Google, advertisers were given credits and a few a cash payment of up to $50.

Postscript 6: Legal expert Eric Goldman confirms what I understood to be likely and mentioned above, that this class action if settled will settle all potential actions by advertisers (in the US) unless they specfically opt-out. Meanwhile, News.com does the rounds to some Google partners and finds Ask expecting they'll be covered by the settlement, as I suggested would be the case above. Other search engines didn't comment.

Want to comment or discuss? Visit the Google To Issue Up To $90 Million In Credits For "Invalid Clicks" thread at our Search Engine Watch Forums.

Postscript 7: Google explains invalid clicks in their Google Blog and Inside AdWords blog.

Posted by Danny Sullivan at 3:20 PM | Permalink

January 4, 2006

YACFA: Yet Another Click Fraud Article & A New Click Fraud Test Underway

How Click Fraud Could Swallow the Internet  from Wired delivers unto us Yet Another Click Fraud Article (forthwith known as YACFA) with relatively little that most of you haven't read before. Far, far more interesting is The Truth About Click Fraud over at WebGuerrilla, which will hopefully take us beyond all the stuff we've heard before. More on the both, below.

The Wired article has a few more details from a "repentant" click frauder, sure. But it also has all the same click fraud stats that no one is sure whether to believe, including the article itself. Nice basic overview if you're coming up to speed; an easy skim for those who've read it before.

Greg Boser over at WebGuerilla was already about to vomit at the never-ending stream of articles on the problem of click fraud, and I know exactly how he feels. Yes, it's a problem -- we got it. But can we get at stats that might not be skewed for various reasons?

To get at the answer, he's conducting a test involving a click box he's built that's to hit (or already hitting) a set of sample sites. Then later this month, he's promising to publish the results. FYI, he's paying for the ads that will be tested, so no one will actually get hit with a bill -- other than Greg himself.

FYI, if you really haven't had enough articles about click fraud, the Search Ads: Clickfraud section of Search Engine Watch for SEW members will take you back among them for literally years. Click fraud sickness bags are not provided. Here's one of the earliest, from 2001 over at Wired.

Posted by Danny Sullivan at 2:43 PM | Permalink

January 3, 2006

Click Fraud Case Against Google Continues Its Way Through Federal Court

In doing some research over the holidays I discovered that back in July a lawsuit against Google was filed by Steve Mizera in the Northern District of California in San Jose.

The full text of the July complaint is posted here. It alleged: + Breach of Contract + Negligence + Unjust Enrichment + Unfair Business Practices

The complaint was amended in October, removing the negligence and unjust business practices portions. The amended complaint is posted here. The court docket, as of today, is also available and posted here.

Posted by Gary Price at 4:26 PM | Permalink

December 29, 2005

Malik Looks at Issues for Google AdSense and Other Ad Programs in 2006

Om Malik has compliled and written an excellent post that discusses what might be some big issues for AdSense and other programs in 2006. Om writes:

From scraper sites, to click fraud to trojan horses, looks like the most profitable money making mechanism, aka AdSense might be facing some tough times.

Malik's post includes links to articles from:

+ Paul Kedrosky Kedroksy predicts that click fraud will go "mainstream" in 2006.

Kedroksy writes: With some estimating that in certain categories click-fraud accounts for as much as 20% of fees, this is a stock-schwacking issue, one that threatens the core of Google's advertising business.

+ Charles Mann's new three page article in Wired titled: How Click Fraud Could Swallow the Internet

and a very interesting report from TechShout that's title says it all: A Trojan Horse program that targets Google ads has been detected by an Indian Web publisher.

Om adds that: TechShout folks say that Google AdSense team confirmed the existence of these problems.

As the 80's group Asia tells us, "only time will tell."

Posted by Gary Price at 3:15 PM | Permalink

December 27, 2005

Sharing The Search Wealth At A9, MSN & The Drawbacks

In my post-Christmas mailbox was a message from A9 reminding me of its A9 Instant Rewards program that effectively pays me a bit to search with them. That was a perfect hook to revisit the entire "pay to search" idea that Microsoft chairman Bill Gates kicked off earlier this month.

Let's dive in on Microsoft first. Microsoft May Give Consumers A Share in Advertising Revenue from the Wall Street Journal covers how Gates suggested the idea that it might share ad revenues with searchers as part of a presentation he gave in India. Said Gates:

The user essentially will get paid, either money or free content or software things that they wouldn't get if they didn't use that search engine.

The story recounts how similar ideas have been tried like this before. iWon gets mentioned for the giveaway model it pioneered, though as a long-term strategy, that hasn't kept the searchers at the service. To date, semi-copycat Blingo also shows that lightning does not strike twice.

Overture -- now part of Yahoo -- was another pioneer in building traffic through payment. In Overture's case, it paid publishers $0.03 cents per query they delivered. Others soon followed, though these programs later died off. They did get a boost when Google jumped in with its Google AdSense For WebSearch program last year.

That brings us to A9. It was also last year, in September, that the service started giving a 1.5 percent discount off Amazon purchases to those using A9. Well, 1.57 percent, which is pi divided by two, a joke on sharing the "pie" with searchers.

Over a year later, the program pretty much seems to have done nil to massively boost A9's popularity. But maybe the email sent out yesterday will reawaken folks. It said:

Dear A9.com user, As a regular user of A9.com, you get many benefits from the advanced search solutions and the personalization features we offer. In addition, you can receive 1.57%* off virtually everything you buy on Amazon.com. To take advantage of this benefit, join the A9 Instant Reward program and search on A9.com a few days per week. It's easy and it's free: go to http://a9.com/-/search/joinInstantReward.jsp and join with one click.

A9.com offers you results from over 300 sources with a single search including Web, images, blogs, and many more categories. You get the results all on one page that you can personalize for your needs. A9.com also shows you which sites you've already visited. With the A9 Toolbar you can access your bookmarks from any computer and even add your personal notes to every site you visit. Your search history is also available on the toolbar together with informative statistics on every Web site.

For more information on the A9 Instant Reward program, go to http://a9.com/-/company/instantRewards.jsp.

Thank you for using A9.com.

The A9.com Team

* Why 1.57%? Remember pi = 3.1415926535... from mathematics? With our pi/2% instant reward, we are sharing with you some of the revenue from the site. We're sharing the pi(e).

The downside to any pay-for-search plan are some of those other programs like this that long-time search marketers will remember, where those being paid to search were doing it for the money, rather than a side benefit. That was a negative to advertisers footing the bill. They want qualified leads, not work-from-home searchers.

Marketing Execs Lukewarm On Plan To Pay Searchers from MediaPost has two of search marketers sounding less than thrilled over any MSN plans to do pay-per-search because of these reasons.

Posted by Danny Sullivan at 12:14 PM | Permalink

December 14, 2005

Click Defense Out, AIT In as Lead Plaintiff in Click Fraud Case Against Google

At the end of June we posted a story (with several links) about a click fraud case filed by Click Defense against Google, we even have a copy of the complaint. Almost six months to the day later, the Reuters story, Google click fraud plaintiff gets 'cold feet' reports that Click Defense was "seeking to withdraw" as lead plaintiff in the case so they can focus on their Ft. Collins, Colorado based business.

The article goes on to say that the company, even though it doesn't want to be lead plaintiff, still wants to be part of the case.

"We are only withdrawing as a representative plaintiff," Click Defense Chief Executive Scott Boyenger said in a statement, adding that the company was doing so in order to focus on its business as a provider of technology used to detect "click fraud" in online-advertising campaigns.

Last week, AIT, an internet service provider has taken over as lead plaintiff. Their company web site is full of links to report click fraud. One link reads, "Click Fraud is Evil. Report Click Fraud Here."

"(Click Defense) started down the road and got cold feet, and we are jumping in their stead," Jay O'Dell, a sales executive at AIT, told Reuters by phone.

A hearing to certify the case is currently set for May, 2006.

The Fayetteville(NC) Observer has more on the case in the story, AIT sues Google. Fayetteville is where AIT is based.

Posted by Gary Price at 7:37 PM | Permalink

November 11, 2005

Murder, Love Gone Awry, Google Searches & Bogus Clicks

Google Blogoscoped and Andy Beal both point to a story about an accused murderer searching for "neck," "snap," "break" and "hold" on Google, evidence prosecutors say that the man murdered his wife. Meanwhile, Barry Schwartz at Search Engine Roundtable points to a WebmasterWorld thread where someone reports a jaded girlfriend clicking on his AdSense links and getting his account suspended.

Posted by Danny Sullivan at 9:44 AM | Permalink

September 20, 2005

CPA, Cost-Per-Action, As Click Fraud Solution?

Last month, Putting an End to Click Fraud at iMedia Connection had Ron Belanger pushing the idea that CPA -- cost per action -- pricing for ads might help solve click fraud issues. Why? You'd only pay for traffic that converts. This month, Why CPA is Not a Cure for Click Fraud has Isaac Scarborough at iMedia delivering the counterpoint. Actually, he sees a lot of positives but not a complete end to click fraud, plus difficulties in moving people used to CPC to CPA.

Posted by Danny Sullivan at 7:59 AM | Permalink

September 15, 2005

Class Action Suit On Click Fraud STILL To Stay In Arkansas

Google Suit Sent Back to State Court from the Associated Press notes that a class-action lawsuit against Google, Yahoo and other search engines over click fraud accusations will STILL not move to US federal court. If I understand right, a request for this move was denied back in July. Now it looks like an appeal of that decision was also denied. More about the case here.

Posted by Danny Sullivan at 7:23 AM | Permalink

September 7, 2005

SES San Jose 2005 Coverage Wrap-Up

There was a ton of news out of our Search Engine Strategies show held last month in San Jose. I've been collecting links of various stories, for the rundown below. There's probably stuff I'm missing -- I still have some catch-up reading for what came out during the week of the show itself. If I see more as I work through that, I'll do a second wrap-up.

  • New SEM Tools From SES San Jose from Pandia covers the many tools presented during our SEO/SEM Toolbox session. There's a great round-up, so check out the list here.  

  • The New World of Search from Kevin Lee at ClickZ gives highlights of what he found from the show, especially looking at changes in metrics used to measure the effectiveness and impact of search.  

  • SearchTHIS: SES Part Deux from Kevin Ryan at iMedia Connection is the second part of his coverage of the show, touching on things such as the keynote talk with Ask Jeeves CEO Steve Berkowitz, MSN's new paid ads program. There's a first part, I'm sure -- but I couldn't find a link when looking around!  

  • How Motley Crue Saved Search from Harrison Magun at MediaPost touches on "booth babes" at the show's exhibition. I don't run the expo side of thing, and my understanding is that the sales team that does recommends that exhibitors do things in good taste. Nevertheless, some think sex sells. That's too bad -- and in fact, it's downright stupid for an industry that's so heavily represented by women. The SES NYC expo center a joke? thread on our Search Engine Watch Forums looks at this issue in depth, a discussion that came up after booth babes were a feature of one exhibitors show there.  

  • Chris Pirillo was running around with his mike interviewing people for The Chris Pirillo Show. Interview with Ask CEO Steve Berkowitz (On Location), Rebecca Lieb on ClickZ (On Location), Brett Tabke on Webmaster World, Jill Whalen on Search Engine Optimization (On Location) and Search Marketing Experts (On Location) are some of them. Chris caught me at the New York show, if you're curious: Searching for Danny Sullivan (On Location). What cracked me up the most about talking to him was that I didn't even realize it was Chris until after it was over! Honestly -- I'd only seen his cartoon on the site and thought it was someone for his show interviewing me, not him. We had a good laugh when I asked him to please say 'hi' to Chris and he said, "I am Chris!" There's even more in his archives from SES San Jose and SES New York earlier this year. Thanks, Nick, over at Threadwatch, for spotting some of these.  

  • How many publishers are really being suspended from AdSense? over at JenSense looks at the Auditing Paid Listings & Click Fraud panel where -- through an unprecedented degree of cooperation between Yahoo and Google -- we finally had reps from both services on the panel. Thank you both, Google and Yahoo! As you can see from her review, she felt it made things much more balanced and useful.  

  • (Almost) Live from Search Engine Strategies: Beyond ROI at SearchViews reviews a panel on how to get things out of search beyond ROI, such as linking into offline sponsorships or creating brand association.  

  • Coverage of SES San Jose: Search Engine Q&A On Links, Coverage of SES San Jose: Earning from Search & Contextual Ads, Coverage of SES San Jose: Search Algorithms, The Patent Files and Coverage of SES San Jose: Favorite SEO Tools are all reports from Stephan Spencer, over at his blog.  
  • Quick SES San Jose 2005 Session Coverage Recap has Barry over at Search Engine Roundtable summarizing all the session that he and his team -- yes, he's got a team now -- covered live out of the show. While the regular Daily SearchCast took a break during the show, Gary was doing some live podcast coverage of his own on August 9 and 10, which you'll find listed here.  
  • Live SES San Jose 05 Session Coverage at our SEW Forums has links to the same coverage Barry and gang (thank you all!) did. They posted in both places, the forums and Search Engine Roundtable -- but the forum threads may have further discussion and information about the various sessions.  
  • WebmasterRadio.FM our official and much loved conference podcasting company was busy. I just did a show wrap-up with them. You'll find it here, along with the pre-show...ah...show!  
  • Google Dance, Yahoo Search Night Off & More Parties At SES San Jose 2005 and Ask Jeeves to Rock SES with The Dan Band provide an overview of some of the major parties that happened at the event. I went to them all and had an excellent time. The search wars have spilled over into the entertainment from, and from enjoying fast access to rollercoasters at Marriott's Great America thanks to Yahoo, an outstanding rocking performance by the Dan Band courtesy of Ask Jeeves, and good food and good times rockin' at Google, everyone including myself had a blast.  
  • Google Dance 2005 are pictures put up by Google of its annual Google Dance party.  
  • Google, webmasters dance to music of different drummers is an AP write-up of the event which I'm going to comment on more separately. I've seen this before -- the manipulators being invited to Google. Yeah, some -- and a lot of the people who are also powering the revenues behind search. Any way, more on that down the line.  

  • Posted by Danny Sullivan at 5:08 PM | Permalink

    August 18, 2005

    Small Business Owner Says He Lost $500,000 Due to Click Fraud

    Adam Penenberg's Wired article Click Fraud Claims Drive Lawsuits, provides another example of a small business owner who says his company lost big bucks ($500,000) due to click fraud. Penenberg also touches on the Lane's Gifts and Collectibles and Click Defense law suits and then comes down hard on search ad providers:

    Don't count on the search engines to confront the problem, though. Sure, they pay lip service to cleaning up click fraud, and issue credits -- not refunds -- to businesses they identify as having been victimized by false clicks. Usually, however, these refunds are a pittance compared to the revenue click fraud generates for them.

    Posted by Gary Price at 2:17 PM | Permalink

    July 19, 2005

    What's New at Snap.com

    Michael Liedtke's AP story: Snap.com Plans to Combat 'Click Fraud', offers a look at what Bill Gross and Snap.com are up to these days including news that the company has just secured more than $10 million in venture capital funding.

    Quick takes from the article:

    + ``We feel there is so much more innovation that can take place in search,'' Gross said Monday. ``It's hard to say that little Snap will ever beat Google, but I think we can become a viable alternative.''

    + Gross is among those who believe click fraud is a big problem. He aims to change things with a ``cost per action'' system that only charges ad commission when a purchase is actually completed. ``I believe the commercial side of search will evolve toward cost-per-action in the next five to 10 years,'' Gross said.

    Posted by Gary Price at 3:55 PM | Permalink

    July 13, 2005

    Click Fraud Case Will Stay In Arkansas

    Federal judge sends Internet-ad suit back to state court covers how an attempt to get a click fraud case filed against Google, Yahoo and others moved to the US federal court system has failed. It will remain within the Arkansas state court system. The case came up earlier this year and is notable as the first major one seeking class action status.

    Posted by Danny Sullivan at 8:58 AM | Permalink

    July 11, 2005

    New Click Fraud Calculator

    How much click fraud is there? When I'm asked, my answer is honest. Who knows? We've had a few stats and estimates, but depending on the industry and the terms involved, the stats could be completely off -- not to mention the source behind the stats being a factor. What are some factors that may put you at risk? Vinny Lingham at Clicks2Customers has just posted a Click Fraud Risk Calculator that by asking a few reasonable sounding questions gives you some idea of this. Some background from Vinny here.

    Posted by Danny Sullivan at 12:33 PM | Permalink

    July 6, 2005

    Testing For Click Fraud Rates

    Marketing Experiments decided to test how much click fraud Google might detect through an experiment (free registration required). Findings? An individual just clicking over and over on your ads in various ways (different computer, same IP; different IPs, other options) isn't likely to get you billed more than once. How about industrial-strength click fraud attempts. To determine that, Marketing Experiments reported on the findings of three different campaigns monitored by IncuBeta. A campaign involving bids of $1-$2 was found to have the highest rate of fraud, 30 percent, while two campaigns involving bids in the $0.20 to $0.30 and $0.05 to $0.15 ranges had fraud rates of 10 percent and 8 percent, respectively.

    Posted by Danny Sullivan at 8:02 AM | Permalink

    July 5, 2005

    Google Wins Click Fraud Case Against Auctions Expert

    Last year, news came out that Google was suing one of its own AdSense affiliates alleging click fraud. Google Wins $75,000 In Click Fraud Case from MediaPost covers how Google has won its case against Auctions Expert. The award happened in May but only seems to be coming to light now. Background on the case from when it broke via XBiz and Google gets gruff over click fraud from News.com.

    Posted by Danny Sullivan at 7:53 AM | Permalink

    June 30, 2005

    Google Targeted With Second Class Action Suit On Click Fraud

    Google sued over "click fraud" in Web ads from Reuters brings news that Click Defense has filed a lawsuit against Google involving click fraud a few days ago and seek to have it made into a class action. The click fraud detection company says it has found rates of fraud reach as high as 38 percent. Yahoo is not named in this suit. Click Fraud Suit Names Google, Yahoo & Other Search Companies covers the first widely known suit of this type which involves companies beyond Google. Thanks to SEW Forums moderator Nacho who spotted the story -- he's also already got a thread up for people who wish to comment or discuss: Google Sued In Second Click Fraud Lawsuit.

    Postscript: If you're interested in reading the complaint that Click Defense filed with the U.S. District Court, we've tracked down a copy. It's available here (PDF; 18 pages).

    Posted by Danny Sullivan at 6:12 AM | Permalink

    June 16, 2005

    Click Fraud Roundup Time for another clickfraud round-up. What have we got? Here we go, newest to oldest, all in one breath!

    Wired reports on search engine BlowSearch's technology that the company says will stop click fraud in its tracks. Click fraud (I prefer clickfraud as a single word, but I've lost that battle) is estimated from being a low percentage of clicks (say the major search engines) to 20 percent of clicks or higher (so split the difference, says John Battelle). Meanwhile, there's a boom in auditing firms underway, the Wall Street Journal tells us. There ought to be, what with people getting pitches about how someone will send them fake traffic for a cut of the take. Can't afford one of those fancy third-party firms? Frank Watson has some simple tips on looking for log oddities. Looking at logs like he suggests left one advertiser unimpressed by the "zero second" clicks they got from paid listings on Kanoodle -- the unimpressed again after giving it a second chance.

    You a Search Engine Watch member? Bless you! I bless you, my children bless you, Chris Sherman's family blesses you, as does Gary Price, Elisabeth Osmeloski our forums editor. Members, please click here for a more annotated rundown on the articles mentioned.

    Still want more. More! Yes, please, more. OK!

    Search Ads: Clickfraud categorizes stories on this topic for Search Engine Watch members going back for years. Dive in.

    Posted by Danny Sullivan at 11:41 AM | Permalink

    May 20, 2005

    Three Attorneys Launch a Click Fraud Clearinghouse

    Three of the attorneys involved in the click fraud class action lawsuit that Danny blogged about last month have started a web-based clearinghouse that will contain information about the case and links to articles about click fraud.

    The site is called LostClicks.com. Presently, the site is rather light on content but will hopefully contain more info as the case moves forward. Right now you'll find a list of recent click fraud articles and a brief backgrounder about why the case was filed.

    Posted by Gary Price at 10:13 AM | Permalink

    May 10, 2005

    A Legal Look at Click Fraud

    Click fraud has been getting a lot of press lately, and while the problem clearly exists, nobody's really certain how serious it is. In today's SearchDay article, Click Fraud: A Legal Look, guest writer Grant Crowell reports on a recent Search Engine Strategies panel that featured insights and advice from both legal experts and search marketers who have direct experience with the problem.

    A longer version of this story for Search Engine Watch members describes the legal options available to advertisers who suspect that they've been the victim of click fraud, and the steps required to gather evidence and supporting information to take action against it. Click here to learn more about becoming a member.

    Posted by Chris Sherman at 12:20 PM | Permalink

    April 19, 2005

    Google Is Responsive On Click Fraud -- How About Some Balance, Says Goodman

    The Search Advertising Story and the Quest for Balance from Andrew Goodman at Traffick has his take that on click fraud issues, Google's actually been responsive for him, in contrast to some press reports. He also takes an interesting look at whether we're getting to have "Google People" versus "Yahoo People" as the issue gets more popular press -- with the main point being that more balance is probably needed overall.

    Posted by Danny Sullivan at 2:01 PM | Permalink

    April 17, 2005

    Washington Post Looks at Click Fraud

    Yes, it's another mainstream press look at the click fraud issue. This time David Vise from the Washington Post writes,

    Google, Yahoo and other providers of online ads said they are increasingly being targeted by online fraudsters, who exploit weaknesses in the Internet ad system to generate revenue or hurt their competitors.

    The article also includes comments from Jessie Stricchiola, from Alchemistmedia.com who has some very strong words about how Google handles click fraud. He says that the company "flat out" is "ignoring advertisers." You'll also read comments from Andy B. and Dan Shapero from Net Applications.

    Salar Kamangar, a product manager at Google is also quoted. He tells the Washington Post,

    I would characterize the problems due to click fraud as small. We have a software system that filters out fraudulent clicks even before advertisers get billed for them..."This is not a significant problem," Google's Kamangar said. "Google's technology detects invalid clicks, including instances when publishers click on their own ads.

    However, five months ago Google CFO George Reyes had something much different to say,

    I think something has to be done about this [click fraud] really, really quickly, because I think, potentially, it threatens our business model.

    Much more in the Washington Post article: Online fraud artists click to steal.

    Also, Danny's post on Friday includes links to other articles on the topic.

    Posted by Gary Price at 4:52 PM | Permalink

    April 15, 2005

    Search Engine Rep Spills On Click Fraud

    Pay Per Click Advertising Fraud - The Inside Story from Joe Holcomb, senior vice president of marketing at the Blowfish search engine, comments on his personal blog about click fraud. His goal?

    My only concern is that someone from inside the pay per click industry finally address the issue of click fraud, head on, without skirting the truth.

    Holcomb then goes through a litany of complaints and concerns in his article. Some highlights below:

    Holcomb starts off with history, covering click fraud as having its origins with PPC-based banners on adult sites and says that despite trying, the adult industry couldn't stop fraud and the search industry isn't having much luck either.

    He breaks click fraud into two types: competitor and automated. Competitor click fraud is your competitor trying to cost you money -- or anyone who may have a beef and wants to hurt your budget.

    Automated click fraud is what he sees as the real concern -- something designed to click on PPC ads en masse. While he doesn't explain why, the intent I'm presuming is to help an affiliate make money by creating fake clicks that earn cash.

    Holcomb says that the search engines are pushing the competitor side of click fraud to downplay the seriousness of the automated side:

    That is what the search engines are telling the public because it is what they want you to believe. It?s PR spin folks. It masks the real problem of what is going on right now.

    Actually, I haven't heard them give any type of coordinated party line at all. We've had them say everything from click fraud of any type is a tiny problem to Google's CFO famously saying in December that it's a big threat, period.

    Holcomb's concerned that advertisers aren't speaking loud enough and "buying the garbage" that the search engines have things in control. Again, I'd counter that's an attitude that's been rapidly changing. Click fraud is an increasing issue among advertisers I've talked with.

    I don't think it's an issue that advertiser have been duped into believing there is no problem. Instead, I think it's more an issue that as costs have risen, they're taking a closer look at what exactly they are paying for and some are spotting irregularities.

    In addition, as more and more stories have come out, other advertisers have had their awareness raised. It's a process we'll continue to see all this year, especially given we have our first click fraud related lawsuit having been filed.

    One point he raises really resonated with me, because I just talked with someone at the SES Munich show last week about it. This was an affiliate who wasn't paid the full amount he was expecting because the search engine he worked for decided some of the traffic he sent wasn't targeted properly. Was a refund then given to those advertisers, since he wasn't being paid? He's still waiting to hear.

    Holcomb touches on this in explaining this is why refunds, when they come, often aren't detailed to show bad traffic sources. If it turned out one particular source was bad -- then rightfully, every advertiser should get a refund from that case, rather than the important ones or the ones who have investigated.

    In the end, he calls for two things. First, that search engines improve their technology to fight click fraud. Second, that this happens through advertisers forcing the search engines to "change their ways."

    I certainly agree. I've said before at our conference evening forums that I'm amazed that advertisers still haven't flexed their economic muscles and demanded, at the very least, the ability to pick and choose the sites that will carry their ads.

    Folks, you fund the search engines. You shouldn't have to be begging, hoping and pleading for source exclusion, as people are in this current thread on our forums: How To Get MY Ads Shown On Specific Content Network Pages. It's absurd. Demand that it be given to you or threaten to pull your ads. And if you don't get what you want, then get together and declare that you'll take a day off from ads, then two, then three and so on.

    Need more to read? BlowSearch Offers Source Exclusion; When Will The Majors Do The Same? is a recent blog post that looks at how BlowSearch and Mirago before it have managed to do what the majors will not. Pay Per Click Advertising Fraud - The Inside Story - Part II from Holcomb goes beyond source exclusion to talk about things BlowSearch is trying to do to prevent click fraud, including this promise:

    BlowSearch will catch the cheaters, ban them, and put their URLs on public display for everyone to see on a quarterly basis once last piece of our click fraud detection is in place.

    I'll be interested to see if that really happens. Interestingly, some "cheaters" might feel the public display is worth the publicity. Legal action might be a stronger deterrent.

    Here are some forum threads to visit, if you'd like to discuss more. Protest PPC Engine Content Partner Distribution from last year is still open, if you want to see comments from those who wish the majors would provide source exclusion. BlowSearch Blows Up Costs is a forum thread not on PPC problems with BlowSearch but with forum moderator AussieWebmaster's less than happy experience with a cost-per-view product.

    Also see More On Click Fraud, The Lawsuit & The Need For Third Party Auditors for a round-up of recent click fraud stories. Another one is in the works, as they're coming fast and furious.

    Posted by Danny Sullivan at 2:18 PM | Permalink

    April 6, 2005

    More On Click Fraud, The Lawsuit & The Need For Third Party Auditors

    After breaking the news yesterday of a potential class action lawsuit over click fraud against major search engines, the Wall Street Journal is back today with a look at the problem itself.

    In 'Click Fraud,' Web Outfits Have A Costly Problem (subscription required) covers familiar ground to many readers. It opens with an advertiser getting worried ironically when refund checks for small amounts arrived from Google and Yahoo for "unusual" or "invalid" clicks. It recounts that the industry does see click fraud as a challenge -- including Google's CFO having declared this a big issue last December. Of course, as the story points out, there are some safeguards already in place.

    More background on click fraud is covered, and then the article returns to the main anecdote of the advertiser who investigates further suspecting a rival and encounters what he felt was little help from Yahoo and Google. The Massachusetts attorney general's office declined to jump in, either.

    Ultimately, he cut his monthly ad spend on search from $20,000 to $1,000: "Am I willing to take the risk and stick my neck out there at maybe $15 or $20 a click? Not now."

    Meanwhile, the AP in Internet giants sued over click fraud has a few more details about the case, including that two initial plaintiffs have dropped out and that a move to try it in the US federal court system has been requested. FYI, we hope to have a copy of the case that we can post on the blog shortly.

    Can't read enough about click fraud? Here are some stories recent stories also worth reading:

    • Click Fraud: Problem and Paranoia from Adam Penenberg at Wired recounts his experiences in being on our click fraud panel at SES NY last month. He covers both issues raised by panelists and audience members who have experience fraud, as well as general background on the problem.  
    • Click Fraud In the Spotlight from ClickZ last month looks at the growing concern and attention that the issue of click fraud has been receiving.  
    • High Noon for Click Fraud from MediaPost last month covers for steps that search marketer Chris Bowler of Agency.com would like to see happen: search advertisers taking more responsibility; better monitoring on the part of search advertisers; insurance policies and an auditing and certification program.

    I especially agree with that last part. It one of the solutions I suggested on the click fraud panel we held, and I've heard other say the same. I'd love to see the major search engines certify third-party companies that would audit suspected clickfraud.

    For the typical advertiser, the difficulty is even knowing how to begin to read the fingerprints of clickfraud. Dedicated companies, on the other hand, aren't starting from scratch each time.

    The plus to the search engines is that this would give them people who are experienced in really ferreting out what is click fraud -- and what is not -- and presenting that in a way they can easily act upon.

    Still want more on click fraud? Search Engine Watch members can use the click fraud category link below for a compilation of stories about the problem and advice on spotting it that goes back for several years.

    Want to discuss? Visit our forum thread, Click Fraud Suit Filed Against Search Engines.

    Posted by Danny Sullivan at 8:28 AM | Permalink

    April 5, 2005

    Click Fraud Suit Names Google, Yahoo & Other Search Companies

    Rumors of a class action lawsuit over click fraud have been circulating for over a year. Now one may have finally arrived. Spotted via the SEO Book blog, Internet Firms Face Legal Test On Advertising Fees from the Wall Street Journal (try this link if registration has been put back on) briefly describes a case filed in February by a group of advertisers against Google, Yahoo, Ask Jeeves, AOL, Walt Disney, Lycos and FindWhat. They claim being improperly charged for fraudulent clicks. The lead plaintiff is Lane's Gifts & Collectibles, and the case filed in Arkansas seeks to be certified as a class action.

    Want to discuss? Join our forum thread: Click Fraud Suit Filed Against Search Engines.

    Posted by Danny Sullivan at 7:39 AM | Permalink

    March 4, 2005

    The NY Times Publishes Article About Clickfraud

    Time for another clickfraud article coming from major mainstream press organizations. This time around it's The New York Times/IHT with the story: Fears of fraud grow on pay-per-click ads. The article includes a couple of comments from Patrick Giordani, the head of loss prevention at Yahoo Search Marketing Services (aka Overture) and Salar Kamangar, director for product management at Google. In the past couple of months we've read clickfraud stories in Newsweek and from the AP.

    UPDATE: Stefanie Olsen from News.com reports from SES about how some companies are dealing with clickfraud.

    Posted by Gary Price at 9:41 AM | Permalink

    February 25, 2005

    Impression Spam A Problem For Google Ads?

    Earlier this month, our Disabling Google Ads With Bots? post looked at the idea in an article that automation might be used to help disable Google ads by generating lots of impressions but no clicks. Why bother with "impression spam" or "impression fraud?" The idea is that it could get your competitors kicked out for a short-period of time, letting you buy ads at a cut rate.

    Impression Spam Worries Google Advertisers from ClickZ picks up the idea anew with a few quotes, mainly focusing on one marketer seeing this a problem. Google says it really isn't much of one. I've never really heard it coming up as much of one either from marketers I've spoken with. Usually, the reverse is true -- they're upset ads get disabled for important terms simply because the terms aren't searched on much.

    Have you experienced it? Join our forum thread on the topic, Impression Spam Worries Google Advertisers.

    Posted by Danny Sullivan at 3:54 PM | Permalink

    February 23, 2005

    Combating Click Fraud, Trademark Infringement and other Search Engine Nasties

    Lurking in the shadowy regions of the web are all manner of scoundrels bent on promoting their web sites at the expense of others, not by aggressive search optimization but through outright theft or fraud. Stealing web site code, running a search advertising campaign using someone else's registered trademark and fraudulently clicking the paid links of competitors to illicitly drive up their costs are just a few of the dodgy methods favored by these unsavory charlatans.

    In today's SearchDay article, Search Engines and Legal Issues, guest writer Grant Crowell covers a recent Search Engine Strategies panel that examined a number questionable search marketing practices, as well as the tactics available to site owners and web marketers to combat these forms of online chicanery.

    Posted by Chris Sherman at 10:27 AM | Permalink

    SEMPO Stats On Click Fraud; Most Worried, Many Confirm A Problem

    SEMPO has released stats about click fraud drawn from the The State of Search Engine Marketing 2004 survey it released in December. For Search Engine Watch members, the Click Fraud A Worry For Most; Confirmed Problem For Many I've posted dissects the numbers in a series of charts.

    Overall, the stats show that concern over the issue far outweighs those who have seriously tracked it happening. However, a significant number have tracked and found it to be a problem. Key breakouts:

    • Most marketers -- between 36 to 58 percent -- said they're worried about click fraud but haven't really tracked it much.  
    • About one-third of SEM firms/agencies and small marketers report click fraud as a confirmed "moderate" or "significant" problem.  
    • Only 15 percent of big marketers report it as a confirmed problem, with my speculation in the article above being that this is because so far, they haven't found it worth the time to track more closely.  
    • Only a minority of search marketers, in the range of 23-33 percent, say they aren't concerned about click fraud.

    For more on this topic, see the Search Ads: Clickfraud area of Search Topics, available to Search Engine Watch members. If you're attending Search Engine Strategies New York next week, also be sure to check out the Click Fraud: A Legal Look session.

    Also check out this recent ClickZ article, Click Fraud: What It Is, How to Fight It, looking at some causes and confusion over click fraud.

    Posted by Danny Sullivan at 9:58 AM | Permalink

    February 11, 2005

    More Press Attention Given to Clickfraud

    Clickfraud continues to get mainstream press attention. This time around, the AP's Michael Liedtke has the story, Click fraud looms as threat to search engine advertising growth.

    Liedtke tells the story of online advertiser Tammy Harrison who says clickfraud cost her $100,000 in sales.

    "Click fraud has gotten out of control," said Harrison, who sells computer software to doctors. "It's stealing money from my pocket. It's just as bad as someone walking into a store and taking a television."

    The article also includes opinions from Chris Churchill at Fathom, Lisa Wehr at Oneupweb and many others. Churchill says that, "Click fraud exists, but it's mostly a big paranoia," while Wehr says, "Click fraud is like a big elephant standing in the middle of the living room. Everyone sees it and knows it's there, but no one is quite sure what to do about it."

    About a month ago, Newsweek published a story about clickfraud.

    Posted by Gary Price at 11:02 AM | Permalink

    January 17, 2005

    Mainstream Press Tells Clickfraud Story

    Looky here, we're now seeing the topic of clickfraud hit the mainstream press.

    An article in the new issue of Newsweek titled: When Mice Attack, tells the story of one ppc customer who claims to have, "lost $50,000 in potential business" due to clickfraud even after complaining to Google.

    Despite new efforts to stop click fraud, the temptation for scammers is growing. Advertisers once bid pennies to place their links prominently alongside searches for words like "refinance." With traffic to the search sites skyrocketing, last week's bid for that word was $12 a click. Fraudsters have to generate only a few fake clicks to make a day's pay.

    The story mentions that the search engines, through the IAB, have formed a "measurement task force" looking at the problem and trying to develop a standard of what's a "real" click. Both Google and Yahoo are asked -- and decline -- to state how much they have refunded due to clickfraud.

    Posted by Gary Price at 6:04 PM | Permalink

    January 12, 2005

    Tips On Protecting Against Clickfraud

    Click Fraud: Somebody Is Cheating You from ClickZ is another look at protecting yourself from clickfraud. Many of the tips and information may be familiar to our readers but refreshers never hurt. It also mentions to online tools you might tap into.

    For more on the subject of clickfraud, see also the Search Ads: Clickfraud of our Search Topics area available to Search Engine Watch members, which summarizes stories on the topic going back for years.

    Posted by Danny Sullivan at 9:06 AM | Permalink

    January 3, 2005

    Defining Click Fraud

    Sure, concerns are rising about clickfraud -- but do we even know how to define what a fraudulent click is? ClickZ gets Google and Overture to provide their own definitions in Google and Overture Define Click Fraud. Overture goes basically with calling it any click not done in "good faith," while Google leans towards clickfraud involving artificial or malicious clicks.

    And hey, is it "clickfraud" or "click fraud?" I'm sticking with the single word for now, while ClickZ goes with two words. I asked our regular presenter on the subject at our SES shows Jessie Stricchiola which she favored. Two words, she replied. Hmm -- maybe I'll have to change my mind!

    For more on the subject of clickfraud, see the Search Ads: Clickfraud of our Search Topics area available to Search Engine Watch members, which summarizes stories on the topic going back for years. FYI, here's one of the earliest we list, from Wired in 2001: Spam Scam Targets GoTo Listings.

    Posted by Danny Sullivan at 1:51 PM | Permalink

    December 21, 2004

    Clickfraud: Rampant or a Manageable Problem?

    Some believe that clickfraud is a huge problem. Others, say it's around but manageable. Brian Morrisey's article: Click-Fraud Threat: 'Staggering' Or 'Overblown'? offers comments from both sides.

    Stephen Messer, CEO of affiliate network provider LinkShare, on Dec. 13 told an investors conference in New York devoted to search marketing that click fraud is "rampant" and "staggering." He said it could wipe out ROI in search marketing in 2005. "It's probably the last big year for search before it blows open or people start looking for alternatives," he said.

    While Andy says, "I think it exists, but it is overblown."

    Posted by Gary Price at 11:45 AM | Permalink

    December 13, 2004

    Case Study On Clickfraud Refund

    Eight Months of Click Fraud in Oregon from ClickZ is a short case study on a merchant discovering $200-$300 in what he felt were fraudulent clicks over an eight month period. Overture issued a 95 percent refund after documentation was provided. Google contested some of the charge allegations and only refunded 50 percent. FYI, clickfraud detection and prevention is the topic of our Auditing Paid Listings & Clickfraud Issues panel at Search Engine Strategies Chicago this week. And for more on the topic, see also my past blog post Clickfraud: Whose Problem, FTC, Search Engines Or Advertisers?.

    Posted by Danny Sullivan at 1:26 PM | Permalink

    December 7, 2004

    Google CFO Say Clickfraud Needs Fast Fix

    Gary blogged earlier about a Financial Times article on clickfraud. Here's a related one from CNN, inspired by Google CFO George Reyes telling an investor conference recently, "I think something has to be done about this really, really quickly, because I think, potentially, it threatens our business model." For more, see Google CFO: Fraud a big threat.

    Reyes later comments accurately that clickfraud is not just a Google problem. Others such at Yahoo, eBay and Amazon also are impacted. But as for a solution, nothing was offered.

    Jessie Stricchiola, one of our regular speakers at Search Engine Strategies on the topic, is quoted saying the search engines aren't doing enough about the problem -- and she says despite the refunds Google issues, they are the most "stubborn" and "least willing" to work with advertisers.

    For more on the topic, see also my past blog post Clickfraud: Whose Problem, FTC, Search Engines Or Advertisers?. FYI, our Auditing Paid Listings & Clickfraud Issues panel returns to Search Engine Strategies next week in Chicago. Once again, both Google and Overture have declined to take part.

    Posted by Danny Sullivan at 11:26 AM | Permalink

    Financial Times on Click-Fraud

    MarketingVox points us to a Financial Times article about click-fraud.

    "We used to have a click-through rate of 1 to 2 per cent for each time one of our ads was shown," said Oscar Jenkins, chief executive of Dynmark, a company that sells bulk text messaging services.

    "Then suddenly in October it increased to around 60 to 70 per cent. We had exceeded our advertising budget by 10 in the morning."

    Google has advised the companies to increase their advertising spend to avoid burning through their budgets so quickly.

    But for some of the smaller companies, such as Dynmark, this is not an option. Instead Dynmark has temporarily halted much of its advertising campaign.

    The problem is not yet very widespread in the UK. Dave Harrison, founder and president of WSPS, one of the country's largest buyers of search advertising, says his company monitors millions of clicks each day across a number of sectors, and has only detected one serious click-fraud problem in the last three months.

    Posted by Gary Price at 10:49 AM | Permalink

    November 23, 2004

    More On Google Sues AdSense Affiliate For Clickfraud

    Stephanie Olsen has a nice News.com story out about Google taking on one of its own AdSense affiliates in a lawsuit over clickfraud that we posted about yesterday. Google gets gruff over click fraud has ample quotes from Google confirming the case and cites out of the court filing. For more background on clickfraud and tips to avoid it, see my past post, Clickfraud: Whose Problem, FTC, Search Engines Or Advertisers?

    Posted by Danny Sullivan at 10:21 AM | Permalink

    November 22, 2004

    Google Sues AdSense Affiliate Over Clickfraud

    Google has apparently filed suit against one of its AdSense affiliates, alleging clickfraud. More from xBiz (note, this is an industry site for porn/adult content, but the link with information has no such content in it). Thanks for the tip from InsideGoogle & Abakus.

    Posted by Danny Sullivan at 9:31 AM | Permalink

    October 21, 2004

    Goodman on Clickfraud

    There is an increasing amount of attention being given to clickfraud these days. Danny linked to a couple of articles in his post: Clickfraud: Whose Problem, FTC, Search Engines Or Advertisers? This article by Brian Livingstone from Datamation says that clickfraud is the "biggest threat" to online advertising.

    Yesterday, Traffick's Andrew Goodman shared his thoughts in a post titled, Fraud, Schmaud.

    He writes,

    It's official: click fraud is now a "scourge". Of course it exists, but the extent of the problem is being blown out of proportion.

    Posted by Gary Price at 7:01 PM | Permalink | Comments (0)

    October 13, 2004

    Clickfraud: Whose Problem, FTC, Search Engines Or Advertisers?

    Adam Penenberg takes the US Federal Trade Commission to task for not doing more to prevent clickfraud in his Wired commentary, Click Fraud Threatens Web. It's not clear whether the FTC has actually had many complaints about this. The agency itself does comment in the article that it is more concerned with actions that directly impact consumers, rather than advertisers.

    Clickfraud exists, no doubt about that. We've had panels discussing it at our SES shows since August 2002 and even started a dedicated session on the topic last year. Interest in that session has been growing. Here's a write-up of the most recent one held last August: Auditing Paid Listings & Click-fraud Issues.

    The major search engines already do things internally to combat clickfraud. However, they could likely do more. A good start might be to actually participate in panels discussing the issue.

    I've invited both Overture and Google each time we do one, and they always decline. Reason? They don't feel they can discuss the issue without giving away stuff that might help fraudsters. In reality, there's a lot they can and should say on the subject to better help advertisers protect themselves.

    Heck, Overture provides some of this information on its site already: Advertiser Security. So does Google: AdWords click quality. Interestingly, neither make use of the word "fraud" in relation to clickfraud activity, preferring the more euphemistic "invalid click," as far as I can tell.

    Penenberg's article makes mention of a recent report suggesting that 50 percent of paid clicks might be fraudulent. MediaPost has a write-up from last month about this: Pay-Per-Trick: Half Of All Ad Clicks Deemed Fraud.

    It's a scary stat, but that's also for certain industry categories, which remain unnamed by the source of the data, Clicklab. That firm also specializes in clickfraud detection, so it's obviously in its interest for the stats to sound as scary as possible. But despite those qualifiers, as said above, there's no doubt clickfraud happens.

    This issue is one that will only grow, as more money is spent on search and contextual advertising. If the FTC doesn't step in, if the search engines are unable to police better, rest assured the advertisers themselves will take action. Indeed, a rumor that I and others have heard over the past few months is that one or more advertisers may be considering filing a lawsuit against the search companies for failure to do more to stop clickfraud.

    Another good article on this topic came out from News.com in July: Exposing click fraud. Also in July, SearchDay ran Advertising & Click Fraud by Jessie Stricchiola, who's spoken on the topic at our SES shows since 2002. Jessie also provides further tips on her own site: Click Fraud - An Overview.

    Finally, complete your reading list with India's secret army of online ad 'clickers'. This article that came out in May is probably most responsible for raising new awareness of this preexisting problem.

    Want to discuss this post or topic? Visit our forum thread: Click-Fraud said to be 50% of clicks

    Posted by Danny Sullivan at 11:44 AM | Permalink | Comments (0)

    September 22, 2004

    Click-Fraud Worsening

    New Attacks and Defenses In Click-Fraud War Source: Datamation

    Brian Livingstone provides an overivew of the click-fraud problem and how some advertisers are fighting back. He believes that click-fraud is the to "biggest threat" to online advertising.

    Posted by Gary Price at 9:59 PM | Permalink | Comments (0)

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