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A top Google official said that growing abuse of the company's lucrative pay-per-click advertising model threatens the popular Internet search engine's business.
"I think something has to be done about this really, really quickly, because I think, potentially, it threatens our business model," Google chief financial officer George Reyes said at a conference Wednesday.
We've never had any issues with traffic from Google search, clicks on the back end are almost always up to 20% higher than what is actually charged. In some markets anyway, it seems that they do very good job of filtering that search traffic.
Like in vehicles, on the phone or behind a computer screen people feel 10 feet tall and invulnerable...
SPAM is the worst thing so far, not getting any better either...
Back on-topic, click fraud hurts us all, every single one, even the one doing it. I personaly feel that if you are doing this at all you should be banned from ever using a computer again...
Tougher penalties is not the answer though technology is. The only thing that will stop folks with no morals is the knowledge that you WILL (not might) get caught.
I agree with google for trying there best to not only defeat this, but to keep the mechanics of it secret. Will will never convince people with no morals to become "moral". You can't even kill them lol because they are born daily today, yesterday and always.
The biggest threat to the internet economy is really not just click fraud, though I seldom disagree with google, but it is "black hat" in general anyone fitting the description of an internet outlaw is part of the problem, a piece of what hurts us all.
An ideal internet, people have sense enough to know that in the long haul crime does not pay, and the only way to do this is with technology. Make it so damn tough to pull off anything that only a select few would even dare to try. It won't end it, but it will reduce it to manageable levels.
I disagree--Adsense fraud is a much more serious problem for them, I would guess. Adwords fraud doesn't hurt them, it hurts advertisers who are forced to pay Google more than they should be. Google's revenues aren't hurt. Under Adsense, Google is possibly being forced to pay out far more than they should be due to so many bogus Adsense clicks, and this directly hurts their bottom line.
Don't forget that, if they're paying money to AdSense publishers, they're also keeping a share of the advertisers' payments for themselves. So the cost of fraudulent clicks isn't eating into Google's profits--it's being borne by advertisers.
Also, it's worth noting that the article stated:
"The main perpetrators appear to be competitors of advertisers and also scam sites set up for the sole purpose of hosting ad links provided by Google, through its AdSense unit, or Yahoo!, through its Overture service...."
In other words, "competitors of advertisers" got top billing as "main perpetrators." What's more, it's a lot harder to catch advertisers' competitors than it is "scam sites set up for the sole purpose of hosting ad links," because the latter are pretty obvious. (All Google needs to do is invest the time and money required to identify "made for AdSense" sites. The AdSense TOS prohibit such sites, and Google can disable the owners' accounts whether or not click fraud is taking place.)
Finally, leery advertisers might be a lot more comfortable with the content network if Google had stricter standards or--better yet--if advertisers didn't have to settle from the current "all or nothing" potluck approach. Some advertisers, for example, might want to buy only editorial sites or sites that had been hand-vetted for quality. Such advertiser control would go a long way toward attracting mainstream advertisers--but it still wouldn't solve the problem of click fraud by advertisers' competitors in certain industries that are rife with scammers, spammers, and fast-buck artists.
I'm an AdSense publisher and make ok money from the program and I'm a bit worried that if the program continues to allow all these crappy sites in, the number and quality of advertisers who select the content option will only continue to decrease.
And I should know, I'm a new Adwords buyer who has turned off the content option lest my ad end up shown on some of these scummy scraper sites. :)
"If we are unable to stop this fraudulent activity, these refunds may increase," Google said in one of the filings.
This is a biggie for Google. With sponsored links providing 98% of their income I would imagine that they are far more concerned about this than, for example, the sandbox. If this story gathers momentum and advertisers start doing real analysis on what they are getting for their money the Adsense scheme could be in real trouble.
If this story gathers momentum and advertisers start doing real analysis on what they are getting for their money the Adsense scheme could be in real trouble.
Why focus on one small part of the picture (AdSense)? The bigger issue is how Google and other PPC advertising media will prevent click fraud by advertisers' competitors. That problem would remain even if the content network were shut down tomorrow. So don't think you're safe if you suspend content ads--you've still got to worry about who's clicking your ads on Google's SERPs.
Still, intelligent advertisers will keep the fraud issue in perspective. If leads from magazine ads or direct-mail campaigns cost $5 and leads from PPC ads cost $1, PPC will look cheap even when invalid clicks are taken into account. Click fraud may be annoying, but in the end, you've got to look at the bottom line. Is PPC working for you? If so, use it; if not, don't.
Is PPC working for you? If so, use it; if not, don't.
That's the bottom line isn't it.
One also has to consider the cost of monitoring every click. In our case there just aren't enough hours in the day as it is.
If the business flow is sufficent to justify the monthly nut of PPC then just roll with it and trust AdWords and Over to do enough click fraud prevention to keep us all in business.
We could not survive at the level we do without a combination of free listings and a PPC program.
We have to have a certain amount of trust that they are doing their job too. We also no longer use the 2nd tier PPC providers.
Perhaps Google, which could easily do this, doesn't do this because, if they did, many prospective advertisers would head for the hills when they saw some of the junkpiles their contextual ads would appear on?
OTOH, perhaps if they saw clickthrough and conversion rates for AdSense run on junkpiles they might change their minds and buy in? I mean, hasn't it been an urban legend that 'speedy exit, junkpile' sites get more clicks OR convert better?
I vote for giving prospective advertisers access to "AdSense member site lists" and letting them sort through them.
Seriously, how hard is it to gain better control of this problem?: Require publishers to submit lists of all of their domains, sorted by predefined Google categories. Configure a publisher's AdSense code to only run on those root domains This also avoids the 'they stole my code and put in on their sites to kill my sites - since it wouldn't run. Require that a publisher submit lists of new/added domains, without which ads won't be fed to those sites. Allow prospective advertisers OR PPC campaign management firms to examine the 'sites sorted by domain and topic lists'. 'Feedback by selecton/omission' in this fashion will privide clues about which sites are quality and which are suspect, which can trigger either a review or, by virtue of ads not ruuning, can trigger an account suspension.
Is it really that hard to get a handle on AdSense fraud? Is coding this really so hard? At least this handles one issue: the click farm junk site issue.
In itself that statement is true, but infortunately for many it is not that simple.
Google AdSense is the online equivalent of the SBC Yellow Pages. Bricks and mortar or service companies know they have to be listed in the yellow pages to protect their market share. That just the cost of doing business.
Google pratically owns the online search/ad business. If your competition is running a strong AdWord campaign and you're sitting back, you're going to lose a large market share to them, even though you both know that they are dealing with as much as 20% click fraud.
What it boils down to is that many advertisers are going to continue to use AdWords despite click fraud and accept that this is something that will have to learn to deal with to protect their market share.
I do realise that there is no fraud involved in yellow page ads, I am just making a comparison to the necessity of running ads to protect market share.
I think that's just a CFO talking. What else is he going to say in front of a group of investors? Fraud expenses are just another line item in his budget.
Am I naive in that I think there's a lot less click fraud than mass media like CNN and nytimes say there is? I question their objectivity when they trash a competing advertising model.
Not to mention, that when a Google executive orders lunch in public it generates 5000 links to the site that reports it.
What I would have told them, is that majority of click fraud now days comes from content match option, due to many affiliates clicking on their own Adsense ads or using tools to inflate their clicks. I have noticed that the ROI on content options on several sites that we track has on average 3 times higher cost. I recommend everybody to either turn of content match completely or to bid 1/3 or 1/4 of your regular bids.
Also, many spiders hit these Adsense ads and advertisers get charged for these.
I even heard of companies in India that have setup network of PC's just for the sole purpose of clicking on CPC ads all day for whoever hires them to defraud their competitors.
CPC fraud is huge. My guess is that 25% to 50% of all CPC clicks are either fruad, spider based or worthless views from competitors.
Really? Yathink? Hmm, yes, stop theft. Theft is bad for bidness. Please, stop the theft. Write your congressman. Where did G find that throwback to the amoeba gene pool?
biggest threat" to the Internet economy
Biggest threat to the internet economy? Hardly. Chargebacks, fear of identity theft and poor search engines results are a much bigger threat to the internet economy. Oh, I'm sorry, he did mention G's business model... So which is it? A threat to G's wallet or a threat to the Internet economy?
Hmm, SEs that derive the majority of their income from PPC should worry about click fraud. SEs that want to "index all the world's information" should concern themselves with providing the most relevant results possible. Or at least learn to do what bricks and mortar shops do. Calculate shrinkage.
I think it's a bit more then annoying
It's like undelivered snail mail or CPM ads that don't get seen or heard. Not good, but if you're getting a positive ROI or a sufficient number of high-quality leads, it's merely a cost of doing business.
Mind you, we're talking only about click fraud that isn't detected. Click fraud that Google does detect shouldn't even be an annoyance to anyone but Google.
What really bites is when you have a new site (in the stupid sandbox), and one of the only ways to get noticed is through Adwords in an industry where fraud is rampant.
It was the Google CFO that said: click fraud the "biggest threat" to the Internet economy
Who's arguing with that?
You said: "Click fraud may be annoying"
Are you saying it isn't? :-)
The fact is, Google obviously is addressing that "biggest threat" through measures that range from fraud-detection algorithms to lawsuits. Click fraud will never be eliminated entirely, but it doesn't have to be: It merely needs to be kept at levels that are comparable to the percentage of bad addresses on a snail-mail list or shoplifting and pilferage losses in a retail store.
"The biggest threat."
Common' put it into perspective. The Google CFO words don't mean jack without something to back it up. I don't care if it is Google. Surely, we've learned what happens when 'following' the CFO's words without requiring proof here lately in the US. Where's the audited data?
"Perhaps Google, which could easily do this, doesn't do this because, if they did, many prospective advertisers would head for the hills when they saw some of the junkpiles their contextual ads would appear on?"
This is absolutely the case. If the advertisers in my areas saw the opportunistic crap that their ads appear on, they would, I have no doubt, turn the content option off faster than you can spit. And if I ever decide to delete the middleman (google), I will, most likely, point out this fact to them.
What could help torpedo adsense would be the appearance of more articles such as the one that's referenced in this thread. Enough of those and people who are considering becoming part of the greater advertiser cohort (adsense is banking on expanding its advertiser base to 400,000) may decide to say "uh uh".
So, click fraud is not just an acceptable cost of business. It's imperils google's growth and it imperils the ability to deliver shareholder value and dividends.
My only concern is that, as google finds more advertisers, they will consider themselves in a better financial position to...begin phasing adsense out. Think about it: if they manage to more than double their advertisers, they won't need the 25% of revenue that adsense currently contributes to their PPC earnings. Sometimes, a company will decide to take a short-term hit if it means ensuring future growth or eliminating a line of business that is too risky or has too many problems.
Of course, phasing out could mean "vetting" and kicking the flimflam sites to the curb, or cutting revenue percentages to publishers.
So, click fraud is not just an acceptable cost of business. It's imperils google's growth...
Click fraud may be less of a threat to Google's growth than declining quality in the content network--not just because of "made for AdSense" scraper sites and the like, but also because of gmail and DomainPark. Mainstream advertisers who are used to having control over where their ads appear aren't likely to be happy with a grab bag.
There's nothing wrong with the concept behind AdSense--indeed, the idea of placing targeted ads on niche or special-interest sites is a lot more appealing than placing the same ads on general-interest "premium partner" sites, if only because the audience is more likely to be interested in the product or service being offered. No; the problem is in the "toss it all in one big salad and hope that no one notices the rotten bits of lettuce" implementation.
My only concern is that, as google finds more advertisers, they will consider themselves in a better financial position to...begin phasing adsense out. Think about it: if they manage to more than double their advertisers, they won't need the 25% of revenue that adsense currently contributes to their PPC earnings.
And how do they serve up enough targeted ad inventory? Through gmail and DomainPark?
Of course, phasing out could mean "vetting" and kicking the flimflam sites to the curb, or cutting revenue percentages to publishers.
Cutting revenue to publishers would be counterproductive, because Google would lose the publishers who are most valuable to the network: i.e., special-interest publishers with readily monetized topics who are capable of earning (and may already be earning) good revenues through affiliate programs or direct ads sales. The "made for AdSense" crowd would most likely stay on, because they have few alternative revenue sources and minimal operating expenses.
Vetting and "kicking the flimflam sites to the curb" is essential, and so is giving advertisers the ability to choose where their "content ads" appear: e.g., throughout the network, on specific parts of the network such as hand-vetted special-interest sites or gmail or DomainPark, etc. Some prospective advertisers may be perfectly happy to have their ads appear anywhere and everywhere in return for a hefty "smart pricing" discount, but others will be willing to pay a premium for the AdWords/AdSense equivalent of a high-quality special-interest magazine or mailing list.