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Google Agrees To $90m Settlement Click Fraud Suit
Brett_Tabke




msg:1233542
 10:48 pm on Mar 8, 2006 (gmt 0)

Google has privately settled is ongoing click fraud case. One expert witness for the plantifits have confirmed they are near a deal.

Reuters [today.reuters.com]

...it had agreed to pay up to $90 million to settle a class action lawsuit over advertising fraud by outside parties on its site, in a bid to put the controversy behind it.

The settlement stems from a lawsuit filed by Lane's Gifts earlier this year in an Arkansas state court and is designed to settle all outstanding claims against Google for fraud committed using its pay-per-click ad system back to 2002, it said.

The $90 million would involve legal fees and credits -- rather than any cash payments -- to all advertisers who apply to be part of the class settlement, once the judge certifies the agreement, Google spokesman Steve Langdon said.


 

gregbo




msg:1233572
 7:45 am on Mar 10, 2006 (gmt 0)

Maybe this is the first nail in the coffin of CPC pricing, and everything will be CPM in a few years.

I certainly hope CPC goes away. I think it's time we admitted that it is a bad business model because it is so susceptible to click fraud. CPM, unfortunately, is highly susceptible to click fraud also, depending upon how the impressions are determined.

gregbo




msg:1233573
 7:53 am on Mar 10, 2006 (gmt 0)

You can track when a visitor leaves using the onunload() function in the BODY tag, so yes, you can know.

Among other limitations, this requires that Javascript be enabled.

gregbo




msg:1233574
 7:58 am on Mar 10, 2006 (gmt 0)

Divulging the "vunerabilities" would accomplish nothing more than giving the people commiting the click fraud a list of countermeasures which they could then avoid.

It strikes me that these countermeasures are already widely known. Basically, anyone who has ever written a web client can figure them out, and the web is chock full of documentation on how to write web clients.

jpchrysler




msg:1233575
 4:29 pm on Mar 10, 2006 (gmt 0)

Maybe this is the first nail in the coffin of CPC pricing, and everything will be CPM in a few years.

CPM is maybe more open to click fraud because the SE's have less data about the impressions of the ads. Plus, there's a tendency to trust impression based data on the part of advertisers because they assume it is safe.

Trust me, it's not. Some of the worst click (impression) fraud I've seen has come from a CPM based ad network who shall not be named but of whom you have certainly heard.

You pay more for more traffic. Publishers inflate the traffic they produce with click fraud in order to charge more.

CPM would probably make it worse. CPA is a safer model, but depending on how it's done, it shifts fraud opportunities to advertisers.

The biggest knock on CPA is that it's only relevant for probably 20% of advertisers. Will a Dentist in Sandusky, Ohio be able to advertise using a confirmation page and such? Pretty unlikely, IMO.

CPC is here to stay. Automated Click fraud (the worst kind)can be marginalized. If the SE's use the right technology, it's just not that hard.

jeffmol




msg:1233576
 4:54 pm on Mar 10, 2006 (gmt 0)

As I see it, a large class of advertisers settling with Google for *credit* is the wrong answer to a very real problem. If advertisers want to offer Google an incentive (via a financial dis-incentive like an expensive lawsuit) to get its act together then they should urge the judge and/or leading plaintiff, Lane's Gifts (I'm not sure which) to reject the ad Goliath's offer.

Many have out the very simple plan of action for Google to take -- assuming it's genuinely interested in dinging its numbers and putting the burning fire that is cost-per-click fraud out. Then again, I tend to believe that the advertisers have all but accepted click fraud as a cost of doing business. I offer Google's soaring revenue as my evidence.

Why not take that settlement number up to $500 million? In my opinion, the $90 million number is absolutely meaningless aside from how the market would react to it. According to this settlement proposal, Google still gets to decide how much credit to issue, if it will issue credit, etc. to any given advertiser who might apply for it.

Jeff

[edited by: jatar_k at 5:01 pm (utc) on Mar. 10, 2006]
[edit reason] no urls thanks [/edit]

arnarn




msg:1233577
 4:11 am on Mar 11, 2006 (gmt 0)


If Google Agrees to $90m, can anyone imagine what Knoodle would settle for?

I gave up after complaining about click fraud for some unique key words that got hammered from different IP's scattered all over the world. Their analysis was that it was legit traffic.

Has anyone published a matrix of different vendors and their click-fraud (suspected) rates?

Maybe we can get a federal law passed for public disclosure of fraudulent activity where customers are charged and not notified!? (i mean, we have federal laws for everything else, why not?)

IanKelley




msg:1233578
 6:03 am on Mar 11, 2006 (gmt 0)

It strikes me that these countermeasures are already widely known. Basically, anyone who has ever written a web client can figure them out, and the web is chock full of documentation on how to write web clients.

This could not be further from the truth (no offense intended).

There are a vast number of ways to interpret the available data in order to find fraudulent traffic and a lot of them no one has come up with yet.

Then there are the large (and growing) number of novel ways people go about generating fradulent traffic, which adds an exponent to the above paragraph.

gregbo




msg:1233579
 6:23 am on Mar 11, 2006 (gmt 0)

Many have out the very simple plan of action for Google to take -- assuming it's genuinely interested in dinging its numbers and putting the burning fire that is cost-per-click fraud out. Then again, I tend to believe that the advertisers have all but accepted click fraud as a cost of doing business. I offer Google's soaring revenue as my evidence.

I think this is sad. Even assuming the low end of click fraud (say, 10%), it amazes me that people are willing to put up with this in exchange for advertising on the web. It makes me wonder what sorts of businesses these people were in before they advertised on the web. What sorts of businesses would desensitize people to (at least) 10% loss of profits?

gregbo




msg:1233580
 6:25 am on Mar 11, 2006 (gmt 0)

These countermeasures are widely known. For example, look at how anti-spam software operates.

jpchrysler




msg:1233581
 5:46 pm on Mar 11, 2006 (gmt 0)

Click fraud and spam are two completely different beasts.

Minimizing the number of false positives is a huge imperative of any spam filtering service/software, because false positives suck value directly from business and personal emails.

Not so with click fraud. Search engines who are monitoring both the client and the server side can act on suspicion without incurring negative consequences.

In cases of suspicious clicks, we pass the click onto advertisers without charging them. If the suspicious click is indeed fraudulent, then no harm is done.

If the click isn't fraudulent, so much the better, as the advertiser gets the click for free.

There's really only one bad outcome in the click fraud decision making process, and that's charging an advertiser for a fraudulent click.

Spam filters have to avoid two bad outcomes - allowing a spam email to make it to the user and preventing a real email from arriving at its intended destination.

Because spam filters must necessarily make distinctions at the grey margins between these two bad outcomes, spammers can continue to make spam look like real email, and it will continue to get through.

gregbo




msg:1233582
 2:57 am on Mar 13, 2006 (gmt 0)

In cases of suspicious clicks, we pass the click onto advertisers without charging them. If the suspicious click is indeed fraudulent, then no harm is done.

If the click isn't fraudulent, so much the better, as the advertiser gets the click for free.

Ah, but the ad publisher/SE loses out because they were unable to charge for a click that wasn't fraudulent.

This is one of the reasons why click fraud detection is difficult (and I am opposed to CPC in general). The ad publisher/SE bears the cost of the suspicious but non-fraudulent click.

This 41 message thread spans 2 pages: < < 41 ( 1 [2]
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