Why did a seemingly strong criminal case simply vanish? A key culprit may have been Google's own unwillingness to cooperate with prosecutors, according to people familiar with the case.....
Whatever the reason, the silence makes prosecutors' jobs harder. In order to prove charges stemming from extortion and click fraud, legal experts say Google would have to pull back the curtain on how it quantifies and grapples with the issue. For instance, prosecutors trying to prove click fraud would have to show specifically how and why clicks allegedly generated by Bradley were deemed fraudulent.
OTOH, advertisers can reach the conclusions that the traffic doesn't convert, for whatever reasons, and reduce their spend (or just stop spending altogether). But there aren't enough who will do this.
Personally, I think this is one of the things that is wrong with PPC advertising. However, there are enough advertisers that are satisfied with the status quo that the engines and networks can continue to make money off of nonconverting clicks, fraudulent or not.
If you really feel as if you shouldn't pay for nonconverting traffic, you really shouldn't use PPC advertising.
We can look at click fraud in a similar light to shoplifting. Stores have to factor that in as a cost to do business. While they do a lot to prevent tactics, they have to raise prices in response.
PPC is a market price, so if click fraud renders PPC ineffective, then no one can pay -- and if it doesn't produce results, no one will pay. Surely people are still paying.
Look at the tier-2 PPC networks. Their prices are dirt cheap, and they should be because they have a higher problem with click fraud. And their prices are very low because their conversion rate for business transactions are poor and advertisers will not pay.
We can look at click fraud in a similar light to shoplifting.
Click fraud is NOT similar to shoplifting. It doesn't take anything out of Google's pockets. In fact, it puts money IN their pockets.
Google has no financial incentive to combat click fraud.
Click fraud makes Google money.
There are too few and too ineffective competitors for market pressure to force them to take it seriously, and force them to accept third-party auditing.
Third-party auditing is absolutely essential. It is essential to and accepted by the (print and broadcast) publishing and advertising industries. Google will never accept it, though.
Until then, IMO, the whole thing is a fraud. IMO, it will turn out to be bigger than Enron.
Also, sometimes you need to factor in the cost of doing business and the threat of bad business practices. I think Google does a lot to help click fraud.
I have never questioned that G is investing time and energy fighting click fraud. I question whether they have been completely honest about the amount and types of click fraud they can actually detect and eliminate. It has always puzzled me that a company of G's engineering prowess did not realize (or did not take immediate action) about click fraud at the time AdWords and AdSense were designed. The ease by which this type of fraud can be perpetrated has been well understood by the Internet technical community for many years.
Google has no financial incentive to combat click fraud.
Click fraud makes Google money.
I disagree, primarily because G has the incentive to stay in business, and retain the trust it has earned. G would lose many customers and users if for some reason people started losing trust in it. It is trust that played a large part in their meteoric rise.
However, it is like I said in my previous post: I don't think they have been completely honest about their ability to effectively combat click fraud.
G has the incentive to stay in business, and retain the trust it has earned. G would lose many customers and users if for some reason people started losing trust in it
Where would their customers go? Where is the competition? Do they have any competition that takes click-fraud any more seriously than they do?
I doubt that Google has many customers at this point who wouldn't jump ship in a second if they had a choice. But they don't have a choice.
The most successful frauds - at least in the short term - are the biggest, boldest ones.
-Yahoo (Organic & PPC
-MSN (Organic & PPC
-Organic Google Results
Where would their customers go? Where is the competition? Do they have any competition that takes click-fraud any more seriously than they do?
There has been a lot of movement from traditional print and broadcast advertising to online, and G in particular. But this is largely due to the better ROI (at least for now). If these advertisers lost trust in G, they'd revert to traditional print and broadcast. The print and broadcast companies would perhaps have to lower their prices, but they can probably do that as they are currently downsizing and consolidating operations in order to be more profitable.
I disagree that click fraud puts money in Google's pocket. I think it takes it out of Google's pocket. In a competitive keyword auction, each advertiser presumably bids to the level that maximizes ROI or achieves a min. threshhold ROI for that auction. If the pool of bidders is large enough then the competition among those bidders will drive the price up to each bidder's minimum threshold. If a portion of the maximum each can bid is stolen by a click fraudster it is money that doesn't go to Google. The threshold ROI of each bidder will stay the same whether or not their click fraud. To the extent that click fraud is eliminated, bidders will see conversions go up, and because they are competing each will raise their bids until they reach their minimum ROI thresholds. Of course Google is the beneficiary of the increased bids.
I am not sure I explained this well, but if you understand auction theory ( since you are self described former financial arb, I am sure you do) and think things through, you will realize that Google has enormous direct incentive to stop click fraud. This incentive is in addition to the less direct importance of protecting reputation.
Nice discourse on the principles of auction theory, so it applies pretty well to Yahoo, which is in fact a transparent, second-price auction. Google claims to be an auction, but their opaque "quality score", placement, and pricing means they really aren't (and they aren't willing to open up and prove they are).
In a perfect world, in which customers trust the "auctioneer" and have instant and noise-free information about their own profitability and how much they will actually pay when they place a bid, customers would in fact quickly lower their bids to account for click fraud. But there are time-lags involved (due to budgets, changing business climates, noise, changing types of click-fraud etc), so in the short term Google pockets the difference between the high price we do pay and the lower price we ought to be paying.
In short, simple economic theory probably doesn't apply here.
This problem reminds me of email spam, in that everyone's talking about it, trying and failing to stop it, and it's just going to get worse. The Interactive Advertising Bureau and Media Rating Council could provide rapid leadership here, instead of spending all their time trying to define a "click", which is about as futile as trying to figure out how many angels can fit on a pin.
This also doesn't address at all the issue of legit publishers who are kicked out of AdSense by competitors or malcontents.
... That's why they're wiling to refund advertisers who complain and provide proof of even suspected click fraud -- often without question.
You might be interested in a post I just submitted about click fraud -- I'd link to it but it goes against this board's terms of service... so you might search for my post with the title, "Beta Testers Needed -- New Click Fraud Detection System"
Cheers,
Markus Allen
Pay per click portals can easily slash click fraud... and they won't because it's profitable -- plain and simple.
Right. We all know it happens and I've seen it so many times for so many clients through all the major engines. It is easy to spot but it won't go away and it really is not worth trying to get an engine to do anything better.
Send your raw logs in they say...hogwash I say. If someone is stupid enough to commit fraud and have it show as a pattern in the raw log then fine because it'll be a few clicks anyway. At best a click bot might be caught.
So, click fraud is here so factor it in to your losses and continue on if you still make a profit - I think :-)
JAG
