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, said Ghosemajumder, Google's business product manager for trust & safety. 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.
To understand the significance of the "single-digit" and 0.02-percent figures Google revealed, it's important to look at how Google detects invalid clicks, including click fraud. Two proactive measures detect and remove clicks from an advertiser's account before they are billed: real-time filtering and offline analysis by Google's click quality team.
In the first case, proactive filters catch invalid clicks in real time. This method keeps the clicks from being billed or showing up in advertisers' metrics. This is the ideal situation, since these clicks in effect never occur, in advertisers' eyes. Not all of the clicks removed here are fraudulent; some are questionable, or have been deemed invalid by Google, such as the second click of a double-click. Filtered clicks make up a majority of the "less than 10 percent" figure that Ghosemajumder is talking about, a level which he says has been consistent since AdWords was launched.
As a result of removing these clicks, Google is purposely deciding to promote network quality over revenue, Ghosemajumder says.
"When we proactively remove these clicks, we forego a significant amount of revenue,' he says, noting that every 1 percent of clicks removed would equate to $100 million in annual revenue for Google. "We're providing hundreds of millions of dollars in proactive protection," he says.
The second proactive detection method, offline analysis, is done by Google's click quality team after the click has been recorded. These are the clicks that show up on advertisers' statements as click quality adjustments. Clicks that are detected at this stage are still not billed to the advertiser, but they do show up in click metrics, so they affect ROI measurements.
Most of Google's efforts here are focused on clicks from the AdSense network, since publisher partners have the most incentive to commit click fraud. Ghosemajumder did not share a specific breakdown of filtered clicks compared to ones that are found by Google's team, but he notes that the team finds a "much smaller" proportion of invalid clicks than those that are pre-filtered.
The amount of proactive filtering Google is claiming jibes with many advertisers' real world experience, Andrew E. Goodman, principal, Page Zero Media, told SEW. "As far as independent validation goes, all I have to go on directly is a swath of client account experiences. These numbers definitely square with what I've experienced," Goodman says. "The amount of proactive filtering is believable because, in a world where we are supposedly beset with click fraud, we somehow manage to maintain consistent or improving ROI numbers on most client accounts."
Invalid clicks that are not detected proactively can still be dealt with when an advertiser reports apparent fraud to Google. The number of invalid clicks that are found through these investigations has remained below the 0.02-percent threshold since AdWords began, Ghosemajumder says.
"We've appealed to advertisers to over-report anything suspicious, and we still haven't seen a spike," he says.
Some critics say the levels remain low because advertisers don't bother reporting invalid clicks, since they feel the complicated process is not worth the potential return, since they believe Google is unlikely to pay out. Others say advertisers are just not aware of the possibility of reporting invalid clicks.
Ghosemajumder counters these arguments with examples of Google's transparency efforts, such as the recent disclosure of invalid click rates. Google is also actively working with the IAB's Click Measurement Working Group, and is participating in Fair Isaac's research into click fraud.
He also points to other examples of Google attempting to provide advertisers with more information on the issue, such as last year's court-ordered third-party report, and the detailed rebuttals of higher fraud rates reported by third-party click fraud detection firms.
To those who say Google is being cheap and not paying advertisers for invalid clicks, Ghosemajumder reiterates that the company could be making ten times the amount of money it currently pays out just by charging for clicks that it currently marks invalid. Those clicks, which are not all fraudulent, are part of the price Google is paying to improve the quality of its ad network, he says.
Ghosemajumder admits that many advertisers have said they would like to see Google make the process of reporting easier. To satisfy them, Google is 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.
IP Filtering will allow advertisers to block an IP address or range of IP addresses from seeing that advertiser's ads. It can be used for users that are suspected of committing click fraud, or for any other reason the advertiser chooses. Ghosemajumder points out that if these users are committing fraud, there is a good chance that their clicks are already being filtered out proactively, but this tool will give advertisers more control as well as peace of mind.
Google already offers invalid click reporting that shows the number of clicks and percentage of overall clicks they represent. In the next few weeks, it will add metrics showing the dollar value these clicks represent as well.
Continuing educational and communications initiatives are planned, centering on a new resource center that will be a repository for all click fraud-related information going forward. The new site will answer questions of advertisers, technologists, and the media, and will be constantly updated with more information, Ghosemajumder said.
A longer-term initiative is underway to create a standardized interface for advertisers to report click fraud inquiries and share supporting data. Currently, advertisers have a Web form with a few fields in it, but the new interface will be more thorough, he said. This effort is expected to be a few months off.
These new revelations and tools offered by Google, along with other recent efforts, are meaningful to advertisers, according to Gord Hotchkiss, CEO and president, Enquiro Search Solutions.
"One of the problems with click fraud is that the scope of the actual problem is being overshadowed by the perception of the problem. I believe Google's new moves are more aimed at the perception issue," Hotchkiss told SEW. "They're saying the relative scope of click fraud is minimal, but they acknowledge the sensitivity is high."
While click fraud is just one factor that could be negatively impacting return on investment, many advertisers see it as the biggest issue, so it needs to be dealt with, he says.
"There are probably other factors that are having a much larger impact, but click fraud is a hot-button issue right now and it's eroding confidence in search as an advertising channel. Google's moves are aimed towards restoring the confidence and in that regard, I think they are needed and are meaningful," Hotchkiss says.
Hotchkiss cautions advertisers not to focus too much attention on click fraud, at the expense of other issues that could be having a larger impact. "If we accept the 0.02 percent number that Google is putting out there, then there are dozens of other factors that are having a more significant negative impact on advertising campaigns than click fraud. If we spend all our time worrying about click fraud we may never pay attention to those other factors," he says.
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