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This 74 message thread spans 3 pages: < < 74 ( 1 2 [3]     
'Click Fraud' Threatens Foundation of Web Ads (Wash Post)
Google Faces Another Lawsuit by Businesses Claiming Overcharges
walkman




msg:3130747
 3:23 pm on Oct 22, 2006 (gmt 0)

"From her home surrounded by cornfields in Dow City, Iowa, Jackie Park spends hours each day on her computer, earning half a penny every time she clicks on an Internet advertisement.

By the end of the day, she usually tallies a few hundred clicks, yielding about $300 a year."

"Yankee Group estimated that fraudulent means are involved in 1 of every 10 clicks on text ads, which translated to a $500 million problem last year, when pay-per-click ads generated a total of $5 billion. Other consultants estimate that click fraud is much larger, perhaps a $1 billion problem affecting 12 percent to 30 percent of all ad clicks."

[washingtonpost.com...]

 

gregbo




msg:3134023
 6:16 am on Oct 25, 2006 (gmt 0)

but most of them earn just a minimal fraction online of what they can demand from offline advertisers.
compared to online pricing models, ad pricing for print is unjustifiable and exorbitant with hardly measurable performance. they can get away with it yet, but it's getting harder and harder as even loyal advertisers recognize the loss of readers and the unbeatable advantages of online campaigns.

Over time, they will move more of their operations online as print readership declines, or the cost of maintaining it becomes unjustifiable. This said, it's not in print media's best interests to cast stones at search engines or online ad networks because they will have increasing exposure to online ad fraud.

gregbo




msg:3134029
 6:22 am on Oct 25, 2006 (gmt 0)

MoTi. I agree that fraud can occur using the CPA model, however, wouldn't this fraud be harder to do and less widespread? I understand that someone with stolen credit cards, etc. could fake transactions and send them to bogus addresses. However, this would be much harder to pull off by the average current click fraudster.

I agree with you, actually. What makes CPC (and CPM) more problematic than CPA is the ease at which they can be done. One doesn't even need sophisticated technology; one only needs coordinated strategically placed clicking in (network topologically) distributed locations that can create clickstreams that look like ordinary clicking. These can't be rejected outright. If they are, other similar clickstreams would be rejected as well, causing the engines and networks to lose money.

I believe that the engines and networks should charge fixed fees to drastically reduce their exposure to ad fraud, but mine is a minority opinion in forums like this.

moTi




msg:3135017
 11:24 pm on Oct 25, 2006 (gmt 0)

wouldn't this fraud be harder to do and less widespread?

maybe the cpa supporters are a bit naive in what concerns the abilities of online fraudsters. they will certainly not shy away from taking every obstacle to defraud the system independent of cpc or cpa. even if less widespread (which lacks evidence), the amount of potential damage committed by a single cheater in a cpa model is in no case less frightening.

why would it be more difficult to cheat sales/leads/actions? imo the opposite is the case. whereas google has the resources to track clicks, and every click is actually tracked and analyzed, there is no way to properly retrace every sale which has occured through publisher referral. google would have to deploy even more sophisticated tracking mechanisms than as yet.
what's more, they would have to spread the tracking mechanism out to the complete online buying process, including cookies and monitoring each advertisers shopping system which offers a whole train of vulnerabilities (think of conversion reportings).
and even then, as has been said, some user actions are still impossible to be technically traced down to their root.

Affiliate programs today (at least the good one's) are able to deal with fraud in their programs, then why couldn't this be done with Google using a CPA advertising venue?

you think they are able to deal with it, but do you really believe fraud is not at least as big of an issue in their programs?

apart from that, this is a game with several parties. advertisers should broaden their mind, that they are not the only players in town. i know, it must be difficult for you, because you are used to be treated favorably by the affiliate programs.
but this is exactly the point why most of these programs are so weak compared to google. they do not recognize, that for a well working advertising market, it is essential to get the publishers into the boat. what's the use of an advertising program without advertising space?

as publisher, i naturally decide which program earns me the most money. just like advertisers, i want a steady and preferably secure income stream. most affiliate programs (which are ironically mostly cpa) don't offer me these qualities, in fact they usually earn ridiculously low money with fraud risk completely on my side. so characteristics are often a relatively respectable advertiser stock but most of them suffer from a serious lack of quality publishers who are willing to offer their ad space.

it's unbelievable that they still don't learn their lesson here in 2006 from googles overwhelming international success. google knows how to handle the parties and to distribute marketing risk equally so that every participant, be it advertiser or publisher has the chance to earn decent bucks.

[edited by: moTi at 11:39 pm (utc) on Oct. 25, 2006]

cwnet




msg:3135038
 11:42 pm on Oct 25, 2006 (gmt 0)

50% of advertising budgets are wasted. Everybody in the advertising world knows and accepts it.

If that happens by click fraud, inflated circulation numbers, dead addresses in purchased lists, peolpe going to the bathroom during tv commercials or whatever does not make a diffenrence.

Move on...nothing to see here.

gregbo




msg:3135198
 3:21 am on Oct 26, 2006 (gmt 0)

maybe the cpa supporters are a bit naive in what concerns the abilities of online fraudsters. they will certainly not shy away from taking every obstacle to defraud the system independent of cpc or cpa. even if less widespread (which lacks evidence), the amount of potential damage committed by a single cheater in a cpa model is in no case less frightening.

Rather than get into a long argument, I'll just provide a link to click fraud commentary [interesting-people.org] from an expert from the Internet technical community, Lauren Weinstein. He is not the only person who has made such commentary; others, such as Bruce Schneier [schneier.com], who made an argument based on security principles in favor of CPA over CPC. The more these lawsuits and news reports hit the press, the more the technical Internet community will become aware of the issues, and will offer expert commentary. If nothing I've written will change your mind, you can take it up with them. But note that they have analyzed all types of systems in their professional lives; they are quite capable of providing an accurate (and credible) analysis of AdWords/AdSense flaws.

apart from that, this is a game with several parties. advertisers should broaden their mind, that they are not the only players in town.

In the long term, no one who is losing money will be convinced that they should continue to lose money.

gregbo




msg:3135203
 3:28 am on Oct 26, 2006 (gmt 0)

50% of advertising budgets are wasted. Everybody in the advertising world knows and accepts it.

If that happens by click fraud, inflated circulation numbers, dead addresses in purchased lists, peolpe going to the bathroom during tv commercials or whatever does not make a diffenrence.

Except the engines and networks that are fraud-ridden would rather have us believe that they have the situation under control.

aeiouy




msg:3135227
 4:30 am on Oct 26, 2006 (gmt 0)

Yeah but as mentioned, traditional advertising had very little actual tracking in many cases. You had issues in the past where commercials were not even run by tv and radio stations that were paid for, and unless you actually had someone monitoring them, you might have just paid for nothing.

Not to mention you had no idea if anyone saw the commercial or acted upon it or cared.

At least with PPC advertising you can measure the result of the ad campaign and correlate it to some further action. This means regardless of any or all fraud you can fairly accurately measure your ROI. Much, much better than has ever been possible with media in the past.

So even if the fraud is there, and even if it is out-of-control, people are not going to care if they are making money. The problem really does fall on the feet of google. Short term it can make them money. Long-term if the medium becomes less viable, advertisers will not use it and they will lose money.

moTi




msg:3135415
 10:27 am on Oct 26, 2006 (gmt 0)

gregbo, i don't know how you earn your money, but do you want to focus on eliminating fraud (which ain't gonna happen anyhow) or can we agree to rather take care of our bottom line?

i know you like throwing around with expert opinions, that's fine with me. but you don't get my point here. the point is, that google won't change its payout method, because as an affiliate in a cpa world, it would suffer from sales fraud just like its publishers.
publishers would flee because of lousy cpa income streams, google would have to increase prices in order to absorb the higher marketing risk, that's less advertising space at a higher rate. boom, your bottom line goes down. you get the situation that maybe fraud is less but advertiser earnings down the drain, because you have transferred your share of default rate completely to the providers of ad space, that is google and publishers.

the point is not fighting a worthless fight against fraud. the point is retaining an efficient advertising marketplace with acceptable risk distribution for every party. but i know you won't get the clue, it's hopeless..

oldpro




msg:3135456
 11:39 am on Oct 26, 2006 (gmt 0)

This reminds me of when I decide to opt out of the content match option. Somebody in Ohio was clicking on my ad on another particular website 20 or 30 times a day for a few weeks. Lightened my wallet a bit.

gregbo




msg:3136038
 9:00 pm on Oct 26, 2006 (gmt 0)

gregbo, i don't know how you earn your money, but do you want to focus on eliminating fraud (which ain't gonna happen anyhow) or can we agree to rather take care of our bottom line?

What I do for a living is irrelevant to the discussion. This is about the claims a technology company has made about its technology. Experts are refuting these claims.

i know you like throwing around with expert opinions, that's fine with me. but you don't get my point here. the point is, that google won't change its payout method, because as an affiliate in a cpa world, it would suffer from sales fraud just like its publishers.

Expert opinion says that CPA is less risky than CPC, and G is offering CPA in addition to its other options. Those who agree with the experts, especially if they've lost money, will switch to CPA.

publishers would flee because of lousy cpa income streams, google would have to increase prices in order to absorb the higher marketing risk, that's less advertising space at a higher rate. boom, your bottom line goes down.

We'll see. So far, I haven't seen any mass exodus of publishers. OTOH, there has been an exodus of advertisers from the content network. I'll note that expert opinion said that it was more risky than the search network as well.

the point is not fighting a worthless fight against fraud. the point is retaining an efficient advertising marketplace with acceptable risk distribution for every party. but i know you won't get the clue, it's hopeless..

If it is so efficient, advertisers would not feel the need to file lawsuits, seek the expert opinion of security technologists, etc. But you'll have to take it up with them. You'll have to convince them that they should want to continue to support the marketplace you claim is so efficient.

europeforvisitors




msg:3136058
 9:08 pm on Oct 26, 2006 (gmt 0)

We'll see. So far, I haven't seen any mass exodus of publishers.

Probably because nearly all revenues for publishers is CPC.

OTOH, there has been an exodus of advertisers from the content network.

Really? Google's 3Q 2006 earnings report showed a substantial increase in AdSense revenues. If advertisers were fleeing the content network, a whole bunch of new advertisers were coming in to take their place--or the remaining clueless or fearless advertisers upped their budgets by a tremendous amount.

gregbo




msg:3136078
 9:23 pm on Oct 26, 2006 (gmt 0)

If advertisers were fleeing the content network, a whole bunch of new advertisers were coming in to take their place--or the remaining clueless or fearless advertisers upped their budgets by a tremendous amount.

I have noted that there are people who spend on CPC according to their budget, regardless of fraud. I have no problem with this; these people can do whatever they want. But at least those people who want to understand in what ways fraud could cause them to lose money can seek the advice of security experts and get it. Openness and freedom of information is good. Choice is good. People should have (and exercise) the right to be fully informed.

josebrwn




msg:3136120
 10:15 pm on Oct 26, 2006 (gmt 0)

Click fraud is the cash cow of AdSense, and AdSense is the cash cow of Google. Google will do nothing substantial to halt click fraud because it will harm their revenues, and currently click fraud drives a significant percentage of their net profits. It is time for all advertisers to openly call on Google to do the following

1. Allow customers to opt out of Seach Network partners.
2. Alow customers to opt *in* to selected Search and Content partners, instead of having to opt out.
3. Shut down AdSense for parked domains.

oldpro




msg:3136201
 11:37 pm on Oct 26, 2006 (gmt 0)

jose,

AdSense is the cash cow of Google. Google will do nothing substantial to halt click fraud because it will harm their revenues

I agree with most of your premise, however the above is based on a faulty supposition.

Adwords advertisers are the cash cows of Google and Adsense Publishers. Advertisers like me supply the primary source of cash inflow into the Googleplex. Then google shares part of this revenue with adsense publishers.

The primary benefit of adsense for google is that it pulls traffic from competitiors. For instance, joe/jane searches for widget on Yahoo...clicks on an interesting website ...an even more interesting website listed under "ads by google" and clicks on it. Instantly cash is taken from the cow (the adwords advertiser) and split between google and the publisher.

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