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Google Agrees To $90m Settlement Click Fraud Suit
Brett_Tabke

WebmasterWorld Administrator brett_tabke us a WebmasterWorld Top Contributor of All Time 10+ Year Member



 
Msg#: 4459 posted 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.


 

walkman



 
Msg#: 4459 posted 11:29 pm on Mar 8, 2006 (gmt 0)

>> This agreement covers all advertisers who claim to have been charged but not reimbursed for invalid clicks dating from 2002 when we launched our “cost per click” advertising program through the date the settlement is approved by the judge.

How does this work? Suppose John Doe was overcharged but was not part of this lawsuit, will he be able to sue separately, or did he give the right to do so when he didn't join in this time? any lawyers out there?

nzmatt

10+ Year Member



 
Msg#: 4459 posted 11:41 pm on Mar 8, 2006 (gmt 0)

Google currently allows advertisers to apply for reimbursement for clicks they believe are invalid. They can do this for clicks that happen during the 60 days prior to notifying Google. Under the agreement with the plaintiffs, we are going to open up that window for all advertisers, regardless of when the questionable clicks occurred.

Does this mean for all advertisers, or all plaintif advertisers? I read it as all advertisers, full stop.

bostonseo



 
Msg#: 4459 posted 11:48 pm on Mar 8, 2006 (gmt 0)

1. I'm not suprised
2. Great (sarcasm) this means another algorithm change favoring max cpc
3. Stock will likely take another sizeable hit
4. Google's account managers will continue to be oh so cheery though :) Do they drug them to achieve that sickening level of faked enthusiam and positivity?

StupidScript

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 4459 posted 12:40 am on Mar 9, 2006 (gmt 0)

They did put a pretty shiny face on it.

Frankly, we've been very aggressive about fraud detection and developed several proprietary tools for that purpose in addition to working, both with our data and our expertise, with a number of Tier 1 fraud specialists around the country (USA), and we've seen very little click fraud coming from Google in the past year or so.

99% of our detected fraud comes from Yahoo.
When was the last time you saw a credit in your account with them?
We see credits every couple of months with Google.

They must be doing something right ...

bnhall

10+ Year Member



 
Msg#: 4459 posted 1:12 am on Mar 9, 2006 (gmt 0)

Reuters [today.reuters.com] is reporting it as a done deal.

msr986

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 4459 posted 1:19 am on Mar 9, 2006 (gmt 0)

to all advertisers who apply to be part of the class settlement

I see a flood of class action applications on the horizon.

once the judge certifies the agreement

Not quite a done deal though.

I see this settlement as opening the door for more similar suits. Does this mean a change to PPC?

fashezee

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 4459 posted 1:28 am on Mar 9, 2006 (gmt 0)

Finally!
I had filed a complaint with the FTC 3 years ago when we analyzed our stats and noticed 70% of visitors from Google remained less then 3 seconds on our home page. There are soo many companies that this effect, it's incredible. I just hope this encourages the big players to stop trying to expand their services while their core profit pipeline is flawed.

ispy



 
Msg#: 4459 posted 1:32 am on Mar 9, 2006 (gmt 0)

Too bad they agreed to settle. I would be interersted in knowing what safeguards are actually in place to prevent click fraud and how effective they are, along with any technical solutions which could be enforced upon companies running PPC advertising to prevent fraud. This info. could have come out in court proceedings. The settlement is an easy out to not have to divulge the vulnerabilities in online PPC advertising.

IanKelley

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 4459 posted 1:55 am on Mar 9, 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.

europeforvisitors



 
Msg#: 4459 posted 2:13 am on Mar 9, 2006 (gmt 0)

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

powerstar

10+ Year Member



 
Msg#: 4459 posted 2:33 am on Mar 9, 2006 (gmt 0)

<<<<I would be interersted in knowing what safeguards are actually in place to prevent click fraud>>>>

As low as possible

If that;s the case then Yahoo should pay $900m

If Google agree to pay that much so how big of a problem is it? must be much bigger

oldpro

5+ Year Member



 
Msg#: 4459 posted 3:33 am on Mar 9, 2006 (gmt 0)

$90 million?

Wonder how many billions of dollars google made as a result of fraudulent clicks? Sweetheart deal for Google.

ispy



 
Msg#: 4459 posted 3:46 am on Mar 9, 2006 (gmt 0)

Divulging what the safeguards are is not the same as opening them up to fraudsters. For example, you can say you offer SSL encryption and we know more or less what that means and trust the service based on this rudimentary understanding. Opening it up to fraud would mean giving away the encryption codes or something to that effect. I have not seen anything on Google which explains what basic steps they take to prevent click fraud. From what I have seen they always just mention that there are safeguards in place without being specific.

bostonseo



 
Msg#: 4459 posted 4:13 am on Mar 9, 2006 (gmt 0)

How is it even legal for Google to use their CPC algorithm? What I mean is that you never know what you are actually going to pay per click...everything is hidden.

Sure you stipulate what you are willing to pay, but you never know what you actually paid. The next day they give you the average, but not the exact details of each purchase. I think their algorithm is challengeable in a court of law.

With Overture you know exactly what you will pay, your competitor prices are advertised up the second basically so there really aren't any 'hidden' variables.

I can't think of anything you purchase where the price is a mystery. Here is an analogy of what they are doing: Say you go to the store and buy a smoke detector (there is no price on it), when you get up to the check out counter the cashier swipes your credit card and gives you no indication of what the price was. If you ask the cashier he'll tell you, check your credit card tomorrow and you will see what we charged you.

I'm sure there is a law against selling something without advertising the price - I'm going to research this matter further.

Stark

10+ Year Member



 
Msg#: 4459 posted 4:45 am on Mar 9, 2006 (gmt 0)

As I'm sure other will chime in, you really don't have to deal with them on their terms if you don't want to.

In addition, consider that because you set a maximum price, in your dubious analogy, you are really approaching the checkout knowing the price, and then you get some level of discount against that price. I'm sure if you asked Google nicely, they would offer to charge you your maximum CPC regardless of whether it was necessary or not.

fiu88

10+ Year Member



 
Msg#: 4459 posted 4:50 am on Mar 9, 2006 (gmt 0)

90mmm....when our click tracking service was actually operational...we estimated 15% of clicks were garbage ( multi comp. clicks or 2 seconds and out)...
Looks like we need to dust off the logs!

NickCoons

10+ Year Member



 
Msg#: 4459 posted 6:11 am on Mar 9, 2006 (gmt 0)

fashezee,

<I had filed a complaint with the FTC 3 years ago when we analyzed our stats and noticed 70% of visitors from Google remained less then 3 seconds on our home page.>

How can you tell? If I visit your home page, I could sit there and read it for 10 minutes and leave, or I could sit there for three seconds and leave. Sure, if I leave after three seconds by clicking on one of the links on your site, then you can tell how long I was there.. but if I simply type in another URL, hit the back button, or close the browser; you have no way of knowing because my browser doesn't contact your server to tell you that I've left.

Am I missing something?

jonathanleger

10+ Year Member



 
Msg#: 4459 posted 6:29 am on Mar 9, 2006 (gmt 0)

NickCoons,

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

poster_boy

WebmasterWorld Senior Member 5+ Year Member



 
Msg#: 4459 posted 8:16 am on Mar 9, 2006 (gmt 0)

As an Adwords advertiser, I'm impacted much more dramatically by deadbeat search syndication partners than I am by fraudulent clicks.

I think Google does a faily good job of filtering out the latter. Now, the former I wish they'd spend more time on...

johnser

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 4459 posted 11:05 am on Mar 9, 2006 (gmt 0)

Click fraud was one of the key business flaws G stated pre-IPO. They've been expecting this for a while and were laughing when the opposition said cool to $90M

This saga has a long way to run yet.

Jordo needs a drink

5+ Year Member



 
Msg#: 4459 posted 2:26 pm on Mar 9, 2006 (gmt 0)

$90 million?

Wonder how many billions of dollars google made as a result of fraudulent clicks? Sweetheart deal for Google.

From the Yahoo AP story on it:
"Google executives have repeatedly said the level of click fraud on its ad network is minuscule — a contention that the proposed settlement amount seems to support.

The $90 million translates into less than 1 percent of Google's $11.2 billion in revenue during the past four years."

Also of note, Yahoo was named in the suit also. They didn't settle and are going to fight it.

Sztraik

5+ Year Member



 
Msg#: 4459 posted 3:12 pm on Mar 9, 2006 (gmt 0)

I just received spam linking to this site:
<removed>

Isn't this click fraud?

[edited by: jatar_k at 5:00 pm (utc) on Mar. 10, 2006]

crak_bot

5+ Year Member



 
Msg#: 4459 posted 6:12 pm on Mar 9, 2006 (gmt 0)

Google is afraid to go to court to defend itself. Not becuase it will have to disclose it's anti-click-fraud measures.

Google is scared because they will be forced to produce their own internal documents and research that shows the real amount of click fraud, which nobody outside of google knows.

The lawyers out there all smell blood and are going to move in like wolves now that they know google is afraid to defend itself.

girish

10+ Year Member



 
Msg#: 4459 posted 8:02 pm on Mar 9, 2006 (gmt 0)

How does one apply for this credit? How do substantiate click fraud?

StupidScript

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 4459 posted 10:04 pm on Mar 9, 2006 (gmt 0)

[url=https://adwords.google.com/support/bin/topic.py?topic=35]Here's Google's help info on click fraud[/url], including how to apply for refunds.

IMHO, Google is saying 'ok' because they are confident that the credits will be less than $90M. Yahoo is saying 'no way' because they are confident that they'll be on the hook for a lot more than that ...

EyeDesign

5+ Year Member



 
Msg#: 4459 posted 11:34 pm on Mar 9, 2006 (gmt 0)

From the Yahoo AP story on it:
"Google executives have repeatedly said the level of click fraud on its ad network is minuscule — a contention that the proposed settlement amount seems to support.

If click fraud is SO small, then why is Google so fast to jump the gun and kick out anyone they "think" was clicking their own ads? I got kicked off Adsense and it was because they think I was clicking my own ads, what if it was click fraud? Do I get re-instated then?

My point is this, it's hard to tell it's click fraud, they have the TOS in place, but just what if and if click fraud is small and minuscule why be so quick to kick every one out of the program and keep the money they earned them? Sending me a brief explanation about why they think I am clicking my own ads isn't going to cut it then. I want proof that it was done by me. They expect us to just sit back and take the blame for something that it may not have been.

Maybe I am missing something, but it all sounds cheesy to me. I liked Adsense and saw income from it, why would I mess that up?

oldpro

5+ Year Member



 
Msg#: 4459 posted 2:11 am on Mar 10, 2006 (gmt 0)

Google executives have repeatedly said the level of click fraud on its ad network is minuscule — a contention that the proposed settlement amount seems to support.

The $90 million translates into less than 1 percent of Google's $11.2 billion in revenue during the past four years."

With all do respect...I beg to differ with this premise.

For starters the word "miniscule" is a very subjective term. Based on authoritative reports and studies I have read click fraud ranges from 10% to as high as 25%...even this is somewhat subjective (only google knows, but reveals the problem in vague generalities such as "miniscule"). The is no objective conclusion as to the real percentage, but certainly 1% is a figure pulled out of the hat. Let's assume the low figure given by independent sources peg it at 10%...that comes to more like a billion in revenue for Google derived from worthless clicks for the advertisers.

With that said, I am a huge fan of adwords and very thankful for the growth it has precipitated for my business. At this point click fraud is just another cost of doing business and advertisers simply have to adjust bids downward to offset unproductive clicks.

JerryOdom

10+ Year Member



 
Msg#: 4459 posted 4:27 am on Mar 10, 2006 (gmt 0)

Its like the saying "Where there's gambling there's cheating". Just because we trust Google more than most places doesn't mean we can totally turn our back on them. Watch them like anyone else. I'm not calling Google a cheater I'm just saying that even in the most trusted places people try to take unfair advantages.

IanKelley

WebmasterWorld Senior Member 10+ Year Member



 
Msg#: 4459 posted 6:40 am on Mar 10, 2006 (gmt 0)

Based on authoritative reports and studies

Such a thing does not exist for click fraud. It is completely impossible to get an accurate figure, what you're reading are educated guesses.

Even Google doesn't know for sure.

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