Google reveals a little more on click fraud
Google has always claimed that click fraud is not a problem, at least for Google. Yet it never really provided any numbers indicating the volume of click fraud the company detected or how much money Google refunded to advertisers because of the problem. So it was anyone's guess as to how big the problem was.
Maybe I should back up here. What is click fraud and why should you care? Google makes money every time people click on the "sponsored links" places next to search results, which are really text ads paid for by advertisers. These ads appear not only next to search results but also as text ads that Google places on blogs or other Web sites, labeled "Ads by Google." (I never click on these ads but apparently, a lot of people do because it provides Google with a significant chuck of its revenue.) Each time someone clicks on the ads, the advertiser pays Google and the Web site displaying the ad. But fraud occurs when people repeatedly click on ads with no intention of really viewing the ad; rather, they want to drive up the cost for the advertiser and increase revenue for the Web site owner. It's more sophisticated than it seems. People create sophisticated "click robots" to make it look like authetic clicking when it's really not. People have also created networks of clickers, or people paid to click on ads to evade Google's click fraud filters.
It's an industry-wide problem--not just for Google--and one that has been compared to the days before newspapers and television had any accountability to advertisers to reveal true numbres of how many readers or viewers they were delivering to advertisers. Similarly for the online advertisers, there is no independent organization now monitoring how many clicks are fraudulent and many advertisers don't have the technology to know the difference.
The big Internet firms --Google, Yahoo, Microsoft and Ask.com--have agreed to form a working group and come up with some standards to define click fraud through the Interactive Advertising Bureau.
Today, Google came a little bit closer to revealing its click fraud numbers. Shuman Ghosemajumder, who leads Google's anti-click fraud effort, said Google is consistently identifying less than 10 percent of all clicks as click fraud and it does not charge advertisers for these clicks. In fact, advertisers never know about these clicks. In addition to that, he said Google has investigated and refunded $2 million last year to advertisers who request that the company investigate certain suspicious clicks, accounting for .02 percent of all clicks.
Google said it supports the idea of creating an independent scientific ratings process with the indepedent Media Ratings Council that would create an equivalent of a Nielsen for the online search advertising firms. "There are a lot of folks who probably think we would not submit our systems to that kind of an audit and we would," Ghosemajumder said. "It's not only important for us to do a good job of managing this issue for advertisers, but to provide as much transparency as we possibly can."
OK, but what about the others? Now it's time for Yahoo, Microsoft and Ask.com to fess up on their numbers.
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