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March 01, 2007

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Marcelo Calbucci

Hi Don, this data is interesting because it shows a big difference to what Google tell us and what we are measuring. See my post on the subject:

http://marcelo.sampasite.com/brave-tech-world/e/Google-Click-Fraud-is-at-odds-wi.htm

CPCcurmudgeon

As a system that provides best effort services to identify some noise in click patterns, I don't have a problem with this. OTOH, they haven't proven (rigorously and scientifically) that it actually detects the amount of click fraud they say it does. Especially problematical is the fact that what is considered fraudulent is mainly a matter of what an advertiser thinks is fraudulent. If the advertiser has a big budget, and can absorb a lot of fraudulent clicks, the system may not catch them until the advertiser complains.

All this aside, I still wonder why it has taken so long for them to do what they should have done in the very beginning when AdWords CPC was launched. The system under discussion now should have been what was designed before AdWords CPC went live.

I would still encourage advertisers to watch their budgets carefully, bid cautiously, and scale back spending at the first sign of unusually nonconverting traffic.

Joe Duck

Don an excellent summary of the cat and mousing but it's *not* just about ROI. Google, MSN, Yahoo have an obligation to find fraud. This study is encouraging as is Shumander who I think is a very honest guy, though I remain skeptical they are catching, for example, all the pay to click schemes. They use quality algos to determine "worthless" clicks but it seems clever scammers would buy "a few" items to get past these. It's not clear to me this can be measured or if it even falls in their definition of fraud.

Steve Morsa

All in all, this long-overdue "proof/disclosure" by Google can only help and support all the players and participants in the paid search/PPC industry by showing that click fraud is--apparently--not as big a problem as has been generally believed...

...and really, given that no real "secrets" were revealed in doing so, it was silly to not "reveal" this information to everyone years ago.

I agree with you, Don, that ROI is--and should always remain--the most important consideration in the use of PPC. With today's sophisticated result measuring tools, as weird as this sounds, even if click fraud was 90% of all clicks, if the ROI was there, advertisers would still be wise to use it...though of course it's the right and just thing for the providers to do all that they can to prevent advertisers from having to pay for such fraud...

...of course, at least manual click fraud could crippled, if there was some way for advertisers to deliver their PPC ads only to exactly and precisely targeted recipients, instead of with easily ID'd and accessed keywords.

Now all we have to do is agree on just what "click fraud" is...

Erik Schwartz

Wouldn't this really mean that Google detects .02% click fraud? To be successful click fraud must not be detected.

Bernard Gallet

Don, I do not believe that Click Fraud is so small. For example, for our clients, the average origin is 64% in the US, however, on the content network, it goes down to 34%.

Also, our tracking uses some javascript, does not is look odd that the proportion of browser without javascript is much higher in the content network?

And I also do not agree that ROI is the only important measure. Let's say you sell something on your site for $100, with a COGS of $60. If you pay $30 per action, you end up with a profit of $10, so this looks good. However, assuming a 10% click fraud rate, as reported by a lot of companies (not Google :-)), you could have paid only $27 per action, hence increasing your profit by 30%...

The only way for Google to prove their claim is to be a lot more trasparent than they are today.

Bob

Meanwhile, we get this:

Google says it loses $1 billion a year to false ad clicks

http://www.cbc.ca/technology/story/2007/03/02/tech-googleclickfraud-20070302.html

This talks about something ~10% as a fairly constant "invalid" click rate. So I guess we're meant to believe they catch almost all of that? LOL. I think it's highly unlikely that GOOG knows exactly what the extent of click fraud is and especially within their partner-generated traffic. I also find it hard to believe they're super motivated to figure it out given that, despite what this says, advertisers are almost surely getting billed for some of it and ALL that flows to GOOG.

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