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A group of advertisers quietly filed a lawsuit in February against Google Inc. (GOOG), Yahoo Inc. (YHOO) and other Internet companies in a potentially important legal test of those companies' liability for a form of online-advertising fraud, Tuesday's Wall Street Journal reported.
"Excuse me but Overture and Google seem to reimburse what they can detect and what is reported. There has to be some level of culpability and unless there is some smoking gun we're unaware of, like what happened in the tobacco industry hiding things, I don't see Google having a huge issue."
They can not put a deer crossing sign for a warning, and say they warned me of dangers on the road. If I am looking for deer, and not expecting town size sink holes, I have not been warned.
They didn't create the hole, but they knew it existed. That is contributing, even if the sink hole was a result of a spring pumping out too much water on the connecting property. Would you just sue the property owner next door who created the problem, or the DOT too? The DOT too, of course.
If they warn me that there is click fraud going on, theives using click software, so I know to check my logs for repeat ips, does that mean they don't have to tell me that there is fraud that I can not detect, and they can not either? No. I have not been warned. If I knew that there was a likihood that a high percentage of my ad dollars were going to fraud that could not be detected, I might just go with flat rate banners. I think that is the case they are making, and it is a good one.
If you know something is wrong, and do nothing to correct it, or warn others, then you are responsible of criminal neglect, when a felony is being committed.
I think, that the advertisers and public in general, believe that the search wizards can create programs to resolve the fraud, and for the most part, feel they are doing as much as they can. Since the problem can not be resolved, in bulk, by the system wizards, should they shut down the ad servers, until they can resolve the problem? If they know about it,yes. If they dont' know about it, why not?
There is only so much they can do from within the box. The problem is the largest threat is from outside the box, in the u.s., and they are not addressing that problem.
The ad servers say they know fraud exists, and they are doing everything prudent to prevent it, catch it, and prosecute it. I'm sorry to say, that is not true, if they believe they can do it with modifications to the program. Program tweeking only resolves a small part of the potential fraud. Non-program loopholes, are much more destructive, and more difficult to identify and correct... the more sophistocated ones, impossible to detect.
If you can't afford to take the risk, don't partake in the offering.
Truths in life:
- Eat Wendy's triples every day you know you'll probably get fat
- Smoke cigarettes you know you'll probably get cancer
- Buy some stock and you could lose a big chunk (if not all) of your investment
- Buy PPC advertising and you know you'll probably get fraud clicks
There are other options, you don't have to use PPC ads, it's a personal choice with known risks of unscrupulous people out there ruining it for everyone.
So in our modern society instead of trying to correct the ills by fixing the source of the problem we reward the self-proclaimed martyrs with cash bonuses from deep pockets.
Eat Wendy's triples every day you know you'll probably get fat
True. However, what if I buy $10 worth of food at Wendy's with my credit card and when my cc statement arrives I get charged $20? Should I just chalk that up to credit card fraud or complain?
Getting fat is a personal choice. Getting riped off isn't.
Just because you have the choice to not use something, because there 'might' be fraud, does not mean that the supplier has the right to knowingly defraud you. I know driving on the highway 'might' be risky. That doesn't give a drunk driver a right to kill me with his car, because...hey, geee I knew the risks. He broke the law. My family will sue him, and they should. When you do something that you know is highly probable to cause harm to someone else, I'm sorry honey, you are in the wrong.
With Wendys, maybe you don't get fat eating 3 burgers. Maybe you have a high metabolism. Maybe you need 20,000 calories today, high fat content, high protein... maybe your name is Arnold, and you are the gover-na-tor. Selling big fat juicy burgers cheap, does not mean you will cause harm, knowingly. There is no way for the food merchant to know how many calories you need, or your metabolic rate.
My 42 year old partner has had heart stints. I am over 50 and have no heart problems. We eat the exact same foods, and have for 20 years. There was no reason for our food suppliers to think there was probable cause I, or he, would be injured from their products. He has bad genes, with a gene history of heart disease. I do not. How can Wendys know our individual probabilities? They can't. It is different, not a good example.
When you know there is a thief in my house, you let him into my house, he steals from me, and you know it, you ARE responsible. Just because I gave you the key, doesn't mean I gave you permission to let a known thief in.
Personal responibility should have nothing to do with the issue either. If you present the chance to someone to make money(and in our case, stacks of it) legally then i guarentee you that you will have customers! But in offering this oppertunity, it is then your responibility to police your own system.
It is my right to have the choice to smoke, drink, eat a million Macs, go surfing. And it is my right to protection from the powers that be! They police their organic serp results in order to keep relevancy. Why not police PPC?
My point is this: I am empowered by making money in the means i deem necessary. In the industry that i have chosen, PPC represents an oppertunity unrivalled by most. PPC may represent an oppertunity cost dilemma but theft should not have to be included as an oppertunity cost. It is for the powers that be to make sure that it doesn't.
the supplier has the right to knowingly defraud you
That's the point nobody seems to get - the SUPPLIER isn't the problem
There are non PPC alternatives like AdBrite that solve the problem, fraud would be REAL hard there.
Therefore, YOU as a consumer can choose to pick the medium with inherent flaws because the bubble gum, rubber bands and bandaids that holds the internet together doesn't provide the tools to properly authenticate and track improper behavior (and even if it did would have workarounds), or you can pick an alternative that isn't as ripe a target.
Heck, I've been in the ecommerce game since the beginning and for tighter security we couldn't even lock a customer IP address to his shopping cart during secure SSL checkout thanks to AOL's SSL modem pool switching IPs every 5-10 minutes and this seemed like a SIMPLE security precaution and easy to implement - WRONG!
What chance does Google have tracking all the possible fraud given this internet hodge-podge?
IMHO the suit is frivoulous given the current state of internet technology and punishing someone because they are working to the best of their capacity within this hacked together environment is ludicrous.
Even more ludicrous are all those crying "Google should tell us how they detect invalid clicks! Open up, stop the secrets!" - OK, real genius's at work on that one, let's just get Google to tell us what they do to defend click fraud already so everyone knows how to defeat it. Assuming this lawsuit isn't dismissed as sour grapes or settled quietly (bad idea, only more will follow), if this information hits open court all hell will break loose in the CPC world.
I agree IncrediBill, to an extent. I believe that they may not be the problem but it is their responsibility to fix the problem. I also agree that their are many mediums and that we are free to participate in whichever we choose. But it is up to the provider of the medium to make sure that it is flawless. For me the pros far outway the cons of advertising on G and that is why i do advertise with them. And i do this knowing that i lose money to click fraud.
I do not know how they are to stop it and frankly dont care (i am not a programmer) but business sense dictates that it would be in their interest and ours to sought it out. And if this lawsuit hastens their response to the issue and possibly forces new innovations by the SE's then i am a happy man
There is no way to protect against click fraud, nothing at all Google or any other company can do to prevent it
Well it's their job to prevent it plain and simple. I've been saying all along that a class action suit would be coming.
The reason they are responsible is because they accept our money for a service. They also profit from these internet bandits so IMO that makes them culpable. We pay for a service of one surfer for every click. If they take our money under that premise then they are required to deliver just that.
No offense to Addsense but where they really opened the game up to click fraud is when they started letting just about anyone in as so called partners. If they had of stuck to search results and only top flight online publishers it would have been a much better system.
We should have not have to police the problem, as we are the consumer. I don't have the time to constantly track down URL's in my logs. ROI is the real measuring tool for me ...not logs.
Eventually PPC will go the way of the Commodore PC and we will all be on to something new.
A few weeks, we had a click rate of above 90 percent for a very competitive, expensive keyword, for serveral days. More than 90 percent! We asked for a refund from Overture and got a reply, that a click rate of over 90 percent isnīt unusual at all, no refund. After all, the Overture support told us, you have to remember, Overture listings do not only apear on Overtureīs web site, but on all major search engines. Which would explain the high click rate. Excuse me? ;)
I had to read it twice. But thatīs what they said. Complete nonsense, made up for naive advertisers.
IMO, conversions will be the future. We see first Pay-per-Sale sponsored search companies and both Google and Overture are heading that way, with transparent cost-per-conversion directly in your account. Charging for the conversions instead of the click is not such a big step. Thatīs the future, I think, making click fraud a thing of the past.
why doesn't Google err on the safe side on adsense? Many innocent sites have fallen for months because of Google's algo, why not do that for Adsense? They don't give a hoot about your money, but they care about theirs is the answer.
conversions will be the future.
That's called AFFILIATE marketing, it's been here a looooong time so people that think CPC is ripping them off can just start an affiliate program instead.
Then what happens when sales get refunded due to customer returns and credit card fraud, will AFFILIATES start suing the AFFILIATE program when commissions are reversed due to normal business issues?
It's the next big thing for the pin-stripe crowd to contemplate.
No offense to Adbrite, but anyone who uses both systems, knows the difference, is like night and day. If they were all that was out there, and after class action, their system may be the default, they would be the best option. I use them. But, as it stands, for a small business owner, Adbrite does not give enough 'good' options for an advertiser, and too little revenue for an 'average' publisher. They are not meat and potatoes they are almond slivers to put on the green beans.
I will say though, that the ratio of clicks I get from ads with Adbrite, that actively surf my site, is equal to all other vistiors, from all other sources.
If the visitor actively surfs the site, that is all you can ask for. You had your shot. Paying for advertising does not guarantee they will buy. It means you get a shot at them. If you did the site correctly, have something they will want to see, they actively surf. The more they surf, the higher the likihood they might buy. (In my case, I don't need them to buy. I just need them to surf.)
As an advertiser, I still have promotion money in my advertising budget waiting to be spent on Adbrite. I can't find sites to place ads on, within my budget, with suitable content, that I approve of, and that might actually send me reasonable traffic, for my money (paid with Adsense earnings). It is slim pickens for me.
As an Adbrite publisher, I am out there alright. But at the rate I'm making money, I won't be able to buy a tank of gasoline next month, if the price of gasoline keeps going up (you know it will). While my Adsense check will support the entire family, if it was all I had in revenue (it's not)
I myself offer flat rate advertising. I promote it as being better than ppc. However, I have clients that I do the site maintenace for, know their stats, and I know how much business I send them for the buck. I am an excellent buy for them. It far exceeds what other flat rate system offer them. But, of course that is depending on their nitch. If they sell surf boards, porn, gravel, world war II memorbilia, and countless others products, I am not a good deal. That is the big difference with me. If I am not a good deal for a nitch, I say so, upfront.
If Google and the lot gave you figures on what you could expect (surfing behavior) for the money... how many clicks, how many surf more than one page, how many return, how many buy the first visit... then we would all have it made. It is that unknown risk, I wish could be reduced. I think that is all any of us want, and hence the class action. We don't seek perfection. There is no advertising utopia. We all know that.
There are very few low price options that work, at all, for any nitch. That is why ppc is so popular. It is an excellent system in concept, can make or break a business, and if the option is failure without doing ppc advertising, for your nitch, then it is an excellent opportunity.
How many businesses come to the web, are never seen, get no traffic, the owner has no idea why, and they slide slowly into the sunset? Thousands each year. If they can spend $100 on ppc each month, and that actually brings them customers,keeps them in the black, compared with no customers, then it is a good thing. It will help keep them viable, even with low initial ROI, while they figure out how the web works, and learn to utilized other tools. Many people don't come to the web full-time, they come to supplement, in the beginning. Those that figure things out, quit their real job, and join us full-time.
I figured out ecommerce 60,000+ hours ago. I have invested a wee bit more of my time into the web, than the average bear.
How about this development-sensitive perspective:
How many of our country's pioneers sued the U.S. Government as a result of death, starvation, disease and lost property as a result of the pioneers and their families taking advantage of the Homesteading Act?
None. All of the pioneers realized that this was an endeavor fraught with peril, and all accepted the reality that they were becoming involved in a new enterprise, one for which they could be rewarded and at the same time one which had no guarantee of success and, in fact, was unlikely to succeed.
We AdWords advertisers are, in spirit, similar to those pioneers when America was new. We are taking advantage of a new advertising mechanism in the belief that the risk:reward ratio is sufficiently tilted in our favor that we will reap some reward from our involvement. There are no paved roads ... cars haven't even been invented yet ... and "Wendy" is that old lady that came in with the last wagon train.
If you buy a magazine ad, and then you find a copy of that issue in a street corner trash can, do you sue the magazine because your ad dollars went to waste, or do you simply recognize that some ad dollars ALWAYS go to waste, and it's not the magazine's fault.
Click fraud is one of the risks we run when we take advantage of this modern day Homesteading Act. As pioneers (and remember where we are in the development of this fantastic infrastructure ... near the very beginning, long-term-wise), we accept that the road is not paved and the food is all carbs and fat. We work together to put in place the systems and methods that will allow us to move smoothly into the future.
Any business owner who does their due diligence in investigating potential advertising media KNOWS that click fraud is (a) one of the verifiable risks of using AdWords or any PPC program and (b) being worked on by all of the major PPC engines AND (c) that by developing their own backchecking system to be used in tandem with the infant solutions being developed by the PPC engines they can significantly reduce the risks posed by click fraud.
Once you know the pothole is there ... drive around it.
Any advertiser who signs up for a PPC program who does not know about click fraud and efforts to combat it deserves to become a victim of click fraud, just as any pioneer who was not aware of the risks involved in grabbing a big piece of free land in the wild west and gets scalped as a result ... deserved it. Bring your own weapons to the table and stop complaining about the government's duty to protect you from the barbarians.
And don't talk about how even the most simple, non-technical person should be able to use PPC risk-free. If one is a simple, non-technical person, then one is at the mercy of the fates, and maybe advertising on the Internet isn't where one should be, right now. Wait a decade or so until these problems are closer to being solved, THEN push your stroller onto the Information Superhighway and gaze at the pretty pictures through innocent eyes. At the current time, we simply cannot protect you. You must take action.
Second, who's "we"? Who appointed you chief spokesman for Google advertisers? Just so you know, a group of those "pioneers" sued Google, otherwise the suit would be dismissed for lack of standing.
Third, it's true that they assumed the risk, because they were literally no laws or consumer protections of any kind. It was known. You buy a bottle of whisky and drop dead because of the rat poison inside, it was your fault; you should've checked the seller's reputation etc. Things have changed a little bit since then so the comparison is not valid. Just ask Microsoft, Standard Oil, AT&T, Ken Lay, Bernie Ebbers etc. If people dont't like the laws they can petition for change or leave the country. Very simple. Oh, and in the Wild West, oen woud go and kill the person who stole from him. Should we go that route?
If your site matches a few parameters Google will move it to page 500, not even rank for your own domain.com. Innocent or guilty, they don't care, you're just a casualty and they're laughing all the way to the bank. Are they that trigger happy with sites caught asking visitors to click on their ads or get caught cheating? With Adwords, they can actually check the sites manually, so they should be a lot more stringent.
"None. All of the pioneers realized that this was an endeavor fraught with peril, and all accepted the reality that they were becoming involved in a new enterprise, one for which they could be rewarded and at the same time one which had no guarantee of success and, in fact, was unlikely to succeed."
(BTW, I use "we" to refer to my company, my crew, likeminded individuals, webmaster, just about any group I might belong to.)
I'm trying to impress on people that the Internet and its "laws" are extremely immature, regardless of what marketing people hype. HTML has only been around since late 1988 (in public form), for crying out loud. "Click fraud" didn't even exist as a concept until years after GoTo.com started selling PPC ads in the late-1990s, less than 7 years ago.
How can people expect a seven-year-old technology to be mature? How can "we" people expect that a problem that was identified years after I bought my last pair of shoes be in any way solved by now?
It's a NEW problem in a NEW infrastructure and it is being addressed as quickly as possible. Sure, some of you might say that a few years is plenty of time to solve this problem. But it's not. The problem is extremely complex and its face changes every few months as new capabilities emerge.
"We" online advertisers ARE pioneers.
If someone wants to throw money at PPC then let them understand that they are involved in a NEW advertising medium that is undergoing the throes of being born. "We" programmers and standards developers are under a giant gun, and "we" are not helped by complaints that "we" are not moving fast enough.
Join "us" in providing solutions. That's what a pioneer would do.
If it's so new and unproven, why is Google making $250 Million a quarter from it? Why did they release it before having enough safeguards in place? This is a legitimate lawsuit. If they can count and keep track of every page that ever linked you, why can't they track the clicks a bit better and suspend cheaters right away? Maybe this lawsuit will make them double or tripple their efforts.
Personally, I don't have a dog in this fight, because I don't use Adwords, but Google can't hide behind "we don't do evil" nonsense anymore. It's one big lie. Between the new algo (automatically blaming you for inbound links among other things), tracking user habits via the toolbar, SmartTags etc., they have crossed the line and joined MSFT. Live by the sword, die by the sword.
now jail or civil suits have replaced that (mostly :))
Here's another (para)quote in support of your overall thrust:
Those that hold great power also hold great responsibility.
I do agree that the state-of-the-art isn't very artful.
I do agree that G and Y and the rest are the gatekeepers hired to protect the rest of us from this kind of thing.
I do agree with "live by the sword ..." et al.
However, in this class action lawsuit (wow ... I nearly had to look at the thread topic to remind myself!), the question which must be addressed by U.S. law is: Is G responsible for the claimed losses suffered by the plaintiff class?
This is where the analogies come in. And the case law.
And the realities of life in the PPC world.
The defense argues that "every advertiser who enrolls in AdWords has a 'reasonable expectation' of experiencing click fraud" due to the preponderance of coverage on this topic in the media (less than Michael Jackson but more than No Child Left Behind's details) and the reasonable expectation on the part of G that the advertiser has executed due diligence. That's reasonable to expect, isn't it?
The plaintiff class counters with "yeah, we knew it existed, but (a) we believe G has engaged in systematic fraud by colluding with the fraudsters in order to boost their bottom line or (b) they aren't properly motivated and have not done enough to stem the tide of click fraud" so ... they are responsible for advertiser click fraud losses. Is that reasonable? We'll see.
(a) Seriously? Without thought to the price they would pay if proved in court? And not necessarily that hard to prove (IP's, AdSense IDs, patterns, documentation, etc.) in civil court. I don't believe it. Sue me.
(b) Define "not enough". Now explain how this "enough" measurement applies to click fraud detection and reimbursement. They're working on it, it's making a huge difference to those of "us" (and you?) who have been in the game for a long time, and "we" expect more to be done ... the passage of time being what it is.
Now convince a jury that that's "enough" to win the lawsuit.
So I do NOT expect the suit to succeed, and I DO expect click fraud to remain one of the thorny problems of our time, and I DO say that filing class action suits against the PPC providers who give a darn is to the detriment of the progress of the Internet, because it detracts from the pressing issues of building solutions by forcing G and others to regurgitate the past instead of working toward the future.
PPC providers who do not give a darn? Burn 'em.
Google? Give 'em a break. They're actually contributing to the solution despite being part of the problem.
What can I say? I'm a dreamer! ;)
Look to the source, Luke. The history. The rate of progress. The people.
Then say, G's responsible for reimbursing advertisers for every fraudulent click because they're not doing enough and all the rest of the complaints.
1) No more further class actions of this type against Google would be permitted.
They would be complete idiots if they allowed a settlement to pass that did not include this clause.
2) Google would immediately improve their billing system to exclude every single fraudulent click, or pay refunds to any advertiser that presented precise click fraud evidence.
Gee. Sound familiar? Only for the moment, Google doesn't demand precise click fraud data, just general click fraud implications. So is this an improvement for "us", the AdWords advertisers?
Abso-freakin-lutely not. I would much prefer to send a few emails stating that we have evidence of fraud for X amount of dollars and have Google respond by sending me a refund than to need (by court order) to send a detailed examination of my evidence to be correlated with Google's own evidence files in support of my claim and end up negotiating the refund with them as they challenge my evidence.
Perhaps they would need to send a check for a few bucks to every AdWords advertiser, as part of the penalty. Remember the penalty phase? How much would the court believe every advertiser, combined had been "cheated" out of? History shows this amount would be less than one might expect.
Put THAT puppy in your pipe and smoke it. Taste good?
Didn't think so. "Quiet" class action suits against folks who are really trying to fix stuff are bad for business. (See, in a "loud" class action suit, the rest of us would be given the opportunity to include ourselves in the plaintiff class and benefit from the monetary penalty. Have you gotten your plaintiff class email, yet? I sure haven't. :)
Have I put forth my position on this for long enough?
If we look at other forms of advertising, there's quite a bit of responsibility assigned to the seller of ads to deliver what they are supposed to. Magazines, for example, publish circulation numbers - typically, these are audited by third parties to insure there's no serious hanky-panky. Television networks measure viewership (again the work is done by third parties), and may compensate advertisers when actual viewing is less than expected.
In short, big-time advertisers expect what they are promised, and won't hesitate to fight back if they perceive they are paying for false traffic. I'd expect more and bigger suits in the future if self-policing isn't effective.
"Click fraud is like a elephant standing in the middle of the living room.
Everyone sees it and knows it's there, but no one is quite sure what to do about it."
"... Class action suits would be heard in state court if the primary defendant and more than one-third of the plaintiffs are from the same state. But if fewer than one-third of the plaintiffs are from the same state as the primary defendant, the case would go to federal court."
Looks like federal court to me. Google is not headquartered in Arkansas. The reason the law moves, those who can qualify, to federal court, is there is little sympathy there. I take it, that the law not only applied to the prescription drug manufacturing industry, but all class action.
Yes, it will lower their ROI, but I'm doing what the advertiser wanted, clicking on the ads to look at their wares. Does the fact I didn't buy make it a fraud click? NO. Does the fact 1,000 people didn't buy make it a fraud click? NO.
So the million dollar question is, other than the single or multi-point of obvious abuse which is easily detectable, how do you know about all the rest?
It's simple, you don't.
BTW, all the comparisons to CPC vs other media is silly, the other media like magazines, radio and TV are all sold on impressions. It's a different model, and the advertisers didn't want to pay for millions of impressions only the clicks, now they're whinging about the clicks.
CPA will be the only thing left standing if this doesn't go away and we all know how well CPA pays publishers.
Hey herb, if you see one of the pages that posts the photo [delawareonline.com] in addition to the Associated Press story among the links in your reference ... that's me on the left and Jessie Stricchiola on the right. Do I look concerned? You bet. Serious stuff.
BTW, we do not both work for her company, as incorrectly stated in some of the captions.