Seems everyone sees the presence of click fraud, but we're just disagreeing about the numbers.
Click Forensics published its numbers for click fraud during Q4 2008 and it appears the fraud numbers are climbing. They found that:
- 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 16.6 percent 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 27.1 percent reported for Q3 2008 and down slightly from 28.3 percent 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 27.6 percent reported for Q3 2008 and 22.0 percent 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).
Interestingly, Google quickly protested the numbers. Shuman Ghosemajumder, a well-known Google employee in the analytics area, has previously challenged the validity of Click Forensics' numbers in a personal blog. Well, I've been involved with the Click Quality Council and know the people at Click Forensics, and I have to think Google doesn't want to admit to click fraud.
The official AdWords blog suggests there is only .02 percent click fraud. Yeah, OK. But Shuman admits higher numbers when he states the numbers are inflated by 40 percent. That still leaves double-digit fraud, and not the double decimal place number pushed by the largest seller of clicks in the search space.
Shuman offers plenty of reasons for the inaccuracy: they don't count right, so numbers are inflated; they're counting wrong things, in the wrong places; and content is the largest place for click fraud.
This situation needs to be addressed. We hope that the search industry will do well in this poor economy, given its ability to measure ROI. If higher numbers of fraud are being published, maybe the change will take longer. People need to know that click fraud increases the cost of conversion. But so long as the CPA is acceptable, fighting it is just a way to make search even more profitable.
We need to understand click fraud exists and that it may have a bigger impact than Google suggests. Proactive actions, such as filtering and offline analysis, are definitely needed, and reactive investigations should be always done.
There's a market for people who analyze and argue to get money back for fraud and other issues from Google. Given the number Google suggests is that off, there's good money to be made in the double-digit discrepancy.
Shuman seems to use some conflicting logic to attack the click fraud industry:
Click fraud protection is something we take very seriously at Google, and it requires a high level of scientific rigor to do well. It's frustrating to see basic mistakes being made by firms selling "additional protection" to AdWords advertisers - in essence, charging them money for advice which can actually hurt their businesses.
I've spoken with many firms and a number of academics interested in this area, and the ones who are investing in serious R&D efforts recognize the limitations of their data and analysis and have not been focusing on publicizing unsupportable and flawed numbers such as the above. We're very supportive of those efforts (and in scientific research in this area in general) and we'll continue to work closely with them.
Google isn't alone in taking this situation seriously, and they're also not the only people able to bring the high level of scientific rigor to their examination. To suggest that people who monitor click fraud -- an added protection -- are deceptive by charging money is flawed. Google makes its money on the other end, and people are employed in the space, so they just write that expense against what is charged the advertisers.
I'd also like to know who are "the many" and how much is "a number." The "publicizing unsupportable and flawed numbers" comment is also questionable. The numbers are gathered and collated; obviously, they aren't as all-encompassing as Google's. But they're legitimately counted.
Google has a responsibility to be more transparent. The legal problems aren't likely to go away any time soon, and Google has to learn they aren't the final say -- they're a contributor to the conversation. As AdWords customers, people have the right to go to someone other than the Ad Quality Team.
Chris Boggs Fires Back
Search engines versus fraudsters is a long-raging battle. Click Forensics and Google is an interesting side story. Perhaps still the best panel I've ever attended at Search Engine Strategies pitted Tom vs. Shuman, perhaps the original "Rocky," to some who have followed this pertinent saga between Google and click fraud perps.
This situation is more like the "Terminator" series. Is Google, the largest and most important search engine, Skynet in this battle? Much like the series, the resistance (fraudsters) uses technology against its own inventor to a clip of over 30 percent. That's some serious firepower.
To many, Click Forensics and the Click Quality Council are a noble group of knights waging battle for transparency against the in-your-face "our-technology-works-and-your-basic-math-is-faulty" perspective that Google pushed out in the beginning and now seems to be angling toward again. The war definitely cooled for a while between Click Forensics and Google, as far as SES goes. The sessions lost a lot of pep.
It was refreshing to see Reggie Davis of Yahoo become the most Click Forensics-aligned "we'll work together" figure, however. They've painted themselves a little less evil in this story (again based on attending this topic's panel at SES over the years).
I respect Tom and other friends at Click Forensics and on the council. Using technology is the only way to ensure that advertisers have true protection from fraud.
The real step that needs to be taken is for Shuman and Tom to kiss and hug, and join forces against the "resistance," which isn't as romantic as it sounds. Fraud costs everyone.
The analytics and business intelligence being performed by top advertisers is a hedge, and the prevailing undetected fraud rate is probably closer to Google numbers for organizations able to better protect themselves. Remember also that many advertisers are willing to give up a small percentage of "shrinkage."
This battle won't be over any time soon. Hopefully the relationship between Click Forensics and Google warms to a serious affair sooner than later in order to save advertisers sooner than later.
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