Google Acts on Advertising Click-Fraud Concerns

27 July 2006

Google has finally acted to remedy advertising over-billing concerns caused by so-called 'click-fraud'. Its move follows a recent $90 million (€71.6m; £48.9m) US court settlement with plaintiff Lane's Gifts.

Such fraud occurs when someone other than a genuine prospect clicks on a pay-per-click ad. For example, a company official could click on rivals' ads to inflate their pay-per-click charges; or a web publisher might click on his site's ads to increase his commissions.

Either way, many advertisers end up paying for clicks that don't generate business leads. Estimates about the extent of click-fraud vary, some putting it as high as 20% of all clicks.

Yesterday (Wednesday) Google introduced a number of safeguards to its AdWords system. They will enable customers to view daily data on invalid clicks, including accidental double-clicks, retroactive to the beginning of the year.

Shuman Ghosemajumder, business product manager for trust and safety, claims Google does not charge advertisers for invalid clicks.

He did not explain, though, how Google identifies invalid or fraudulent clicks, albeit claiming that the "vast majority" are detected and excluded from advertising bills. Nor was he willing to cite any general figures on invalid clicks.

Instead, Ghosemajumder traded platitudes and repetition for hard facts: "Advertisers asked us for more transparency on this issue. Until now advertisers haven't had a great deal of data to compare from their own accounts in order to be able to understand what Google is doing for them."

"Our goal is to provide that transparency so advertisers who previously may have been unnerved or concerned about these wildly exaggerated figures will be able to see now what Google is doing to protect them."

Data sourced from CNET (USA); additional content by WARC staff