Google’s Responses to Click Fraud

March 19, 2006

Last week, Google and Lane’s are coming to an agreement about Click Fraud:

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. For all eligible invalid clicks, we will offer credits which can be used to purchase new advertising with Google. We do not know how many will apply and receive credits, but under the agreement, the total amount of credits, plus attorneys fees, will not exceed $90 million.

The good part of the agreement is that Google more or less admitted there were invalid clicks (which was an issue a few years ago). The bad news is that it’s a class action lawsuit (so only the lawyers really get money) and all refunds are in Google credits.

The Google credits is definitely an issue as not everyone is still a Google advertiser; and if one were to leave the AdWords program due to invalid clicks, why would they want credits? That part seems a bit naive.

If I went toBest Buy and bought a new plasma TV, and then Best Buy overcharged my credit card for that TV; I would not expect Best Buy credits, I would expect a refund on my credit card for those dollars. While this might make sense for Google as it keeps the dollars in-house, it definitely is not in the advertiser’s best interests.

Another issue that comes into play is many of the ‘click fraud’ tests aren’t very sophisticated. In addition, many of these tests only determine how many clicks are invalid - not if the advertiser was also charged for them - a significant difference. I’ve heard stories of people who don’t track clicks at all decide that their a victim of click fraud because their conversions have decreased. Of course, invalid clicks and conversion percentage aren’t necessarily related, and determining click fraud by actions is a meaningless correlation. At best, it’s a warning flag to perform some auditing on your traffic, but by itself, it doesn’t mean there was click fraud in play.

However, the good news doesn’t come from Google, it comes from 3rd party resources. I’ve heard a few stories of individuals running sophisticated click fraud detection services and they’re always amazed at how few invalid clicks actually get through. Of course, that could either be their detection system or their keywords. One really needs a very large sample (and distribution across all of Google’s partners) to determine overall invalid click trends.) to determine overall invalid click trends.

Here are official responses and FAQs from Google about invalid clicks: