Google To Issue Up To $90 Million In Credits For "Invalid Clicks" [Archive]

rustybrick

03-08-2006, 06:27 PM

Danny has the scoop at the SEW Blog Google Agrees To $90 Million Settlement In Class Action Lawsuit Over Click Fraud (http://blog.searchenginewatch.com/blog/060308-152034).

We are proposing a settlement with the plaintiffs in this case. The proposal would allow advertisers to apply for credits for clicks they believe were not valid. Specific details of the settlement will remain confidential until it is presented to the judge. We do not know how many advertisers will apply and receive credits, but the total amount, including the legal fees determined by the judge, will not exceed $90 million.

Advertisers need to act quick? Affect on advertiser confidence? Affect on Google's Stock? On future outlook of Search Advertising?

Jeff Martin

03-08-2006, 07:17 PM

Steve Malouf contacted me and relayed to me that the $90 million will be consisting of advertising credits. I guess that will probably be made through a claims-made basis class action syle?

I guess I tied with Danny here (http://www.vericlix.com/2006/03/lanes-collectibles-google-click-fraud.html) and here (http://zen-sem.blogspot.com/2006/03/google-settles-lanes-collectibles.html) :p

Advertisers need to act quick?
Im sure the court will allow adequate time to file for a credit. Ive seen class-action notices before where you have several months to file.

Affect on advertiser confidence?
As an advertiser I might be a little more confident in seeking my refunds for suspicious activity.

Affect on Google's Stock?
Emotion rules Wall St. I think we will see another chop towards the stock price. Isnt this the first lawsuit against Google they have settled?

On future outlook of Search Advertising?
If Google settles, how can they maintain the same model? Wouldn't this open the door to more lawsuits? To protect themselves (and those darn pesky shareholders) change is going to need to be made. Google needs to get rid of the conflict of interest and let a 3rd party make the decision of yea or nae on click fraud by analyzing both Google and advertiser data and making an independant unbiased judgement. This 3rd party must consist of click fraud subject matter experts - not just data analysis folks.

dannysullivan

03-08-2006, 08:42 PM

I covered the last part in the postscripts to my story. Google says they are more proactive now. Steve says he hopes there will be more data provided and third parties have a roll. No one things click fraud is going away, but it does potentially give Google a fresh start to make sure it is keeping advertisers happy and credited quickly if they spot something, to the degree they don't feel they need to go to court. Plus, I think the case will scare some people off. Google's settling for only -- and I use that word on purpose -- $90 million for a four year period. That's not much across the billions spent. A class action for future cases could happen, but you have the burden of showing Google's gotten much worse at things to get a value higher than this one.

Chris Boggs

03-08-2006, 09:00 PM

hee hee I feel funny that I called them today asking for $103.68 from an account that didn't get shut down as scheduled. :p They said "probably" and that it too would only be a credit.

Is 90 Million a "drop in the bucket" or will this really spur some get tough measures on fraud? Danny is another postcript coming re: what Google claims to be doing about increasing their own ability to stop this (I know they won't give specifics, but jeez some further assurance would be nice).

Also...anyone know if this fraud was mostly contextual or not really broken down between contextual and search?

dannysullivan

03-08-2006, 10:16 PM

pretty much what i posted from them already says it. no one expect click fraud is going away. they just say they'll be more proactive in helping advertisers spot what might escape their own systems (which they say is small) and getting them credit, if so. if they're saying probably to you on this recent thing, that's an example of this, i'd say. in the past, you'd more likely have had to go through longer stalling. it will be cheaper for them to simply quickly issue credits with less hassle than risk another lawsuit. that's probably the big win in this, if it does go through -- that if they are smart, they really will be responsive and credit properly.

Jeff Martin

03-08-2006, 10:24 PM

but it does potentially give Google a fresh start to make sure it is keeping advertisers happy
How does Google have a fresh start? Nothing has changed. The process is still the same and the conflict of interest is still the same. I have PPC advertisers over at VeriClix who are not too happy with Google and I meet more of them every week.

Google's settling for only -- and I use that word on purpose -- $90 million for a four year period. That's not much across the billions spent.
True, however we would be foolish to think that Google didnt settle this case becuase they thought they had to. The judged ruled against the SEs in each major decision, this case was going very well for Steve's team. Who is to say another talented law team couldn't/won't take this all the way?

A class action for future cases could happen, but you have the burden of showing Google's gotten much worse at things to get a value higher than this one.
I dont see why another team wouldnt just have to prove what Steve's team was trying to prove. Since nothing has changed all of the problems and issues are still there. The only difference now is that Google will be minus $90mm dollars and their stock will probably take another hit along with their capital.

I dont see how PPC advertisers have been helped. Sure a few of them will get some credits, however they are still going to lose more money to click fraud. We wouldnt let advertisers make the sole decision about refunds, why would we let the engines?

dannysullivan

03-08-2006, 10:35 PM

How does Google have a fresh start? Nothing has changed.
It's a fresh start to remove four years of liability for $90 million. If the settlement goes through, all those potential claims go away. Anyone who feels they have a case has to start counting from say April 2006 forward. And they'll have to prove Google wasn't being responsive, wasn't issuing credits and so on. Maybe that will happen because Google will be that way. But they'd be pretty stupid, if so.

Who is to say another talented law team couldn't/won't take this all the way?
They might have, but it's a moot point. This settlement will settle it for all parties to the class, ie, all Google advertisers in the US.

I dont see why another team wouldnt just have to prove what Steve's team was trying to prove. Since nothing has changed all of the problems and issues are still there. The only difference now is that Google will be minus $90mm dollars and their stock will probably take another hit along with their capital.
So again, this case will settle all previous problems, unless an advertiser specifically opts-out. Eric Goldman explains more about that here (http://blog.ericgoldman.org/archives/2006/03/lanes_gifts_cli_1.htm). Perhaps some will do so and decide its worth doing their own case and potentially arguing they are entitled to a bigger settlement. Not saying that can't happen, only that now you've got an amount agreed for every advertiser in the US before one US district court, so seems like you're going to have a harder time convincing that you should get a bigger payout. Again, I can't rule that out -- I'm not a legal expert, but neither do you need to be a legal expert to see some of this.

I dont see how PPC advertisers have been helped. Sure a few of them will get some credits, however they are still going to lose more money to click fraud. We wouldnt let advertisers make the sole decision about refunds, why would we let the engines?
I don't know that they are necessarily helped. They are only helped if the search engines really do police click fraud and issue prompt refunds to prevent future cases from being filed. Part of that is likely going to involve making use of third parties, though the settlement doesn't seem to require this.

In short, no one loses their right to go to court in a case for things after the settlement date. But you don't go to court unless you have to. Jeff, if your spotting fraud at VeriClix and Google's agreeing with you and issuing refunds in the majority of your cases, maybe the vast majority, why would you go to court? You're only going to do that if they aren't acting upon valid complaints you feel you have in many cases.

And keep this in mind -- it's very much to their advantage to even drag some things out now until the settlement happens. That's because once it goes through, they don't have to pay up except through the settlement itself.

Post settlement attitude is what's goig to be crucial. If they aren't responsive after that, no doubt new cases will emerge.

Mikkel deMib Svendsen

03-09-2006, 05:31 AM

If the settlement goes through, all those potential claims go away.

Danny, maybe you can explain this because I don't understand the above statement in context of what you wrote in your blog: "Issues With Non-US Advertisers Not Resolved: ..." How can all potential claims go away just because of a US case that, as far as I see, have NO legal impact outside the US? did you mean "all those potential claims go away ... IN THE US"?

dannysullivan

03-09-2006, 07:17 AM

Ah, Mikkel, are you suggesting I wasn't writing clearly!

It was pretty late :)

My understanding is that this case will only resolve claims in the US. So somemone could still file a suit against Google over click fraud during this period outside the US.

What's less clear is who gets paid outside the US in this claim. If you are an advertiser who is based in the US, you are covered. If you're an advertiser outside the US, you might not be. But what if you are an advertiser outside the US who was placing ads to be viewed in Google's US market?

The main point is that the exact answer to the international element isn't known yet. We're going to have to see how the settlement plays out.

Jeff Martin

03-09-2006, 09:22 AM

It's a fresh start to remove four years of liability for $90 million. If the settlement goes through, all those potential claims go away. Anyone who feels they have a case has to start counting from say April 2006 forward. And they'll have to prove Google wasn't being responsive, wasn't issuing credits and so on. Maybe that will happen because Google will be that way. But they'd be pretty stupid, if so.
I should have phrased my question - How does Google have a fresh start in the eyes of PPC advertisers?

The advertisers I have spoken to in the short term don't see how they have been helped and their view on Google and click fraud hasn't changed much.

Not saying that can't happen, only that now you've got an amount agreed for every advertiser in the US before one US district court, so seems like you're going to have a harder time convincing that you should get a bigger payout.
I look forward to seeing the details as to how compensation is going to be figured out. You can’t just apply a blanket number to all advertisers. You really cant even just base it on spend. To get the best understanding you would need to look at the spend, the buying cycle of a particular vertical and then gauge the prevalence of click fraud based on specific vertical numbers.

I don't know that [advertisers] are necessarily helped.
Again - that makes two of us.

They are only helped if the search engines really do police click fraud and issue prompt refunds to prevent future cases from being filed.
They haven’t done much to date in communication with their advertisers or done much to meet advertisers expectations for dealing with click fraud. Now they have gotten off by paying a tiny amount of money (for them) to wipe out potentially hundreds of millions of dollars of click fraud money that they shouldn't keep. From that perspective, it would make more financial sense to just pay up $90mm so I could sweep the issue under the rug every four years and keep the rest.

Part of that is likely going to involve making use of third parties, though the settlement doesn't seem to require this.
From what I have heard the settlement makes no attempt at trying to change this flawed system.

Jeff, if your spotting fraud at VeriClix and Google's agreeing with you and issuing refunds in the majority of your cases, maybe the vast majority, why would you go to court?
Because this just isn’t so Danny. Since Google shares no data and only provides a filtered view of what's happening in Adwords reporting they can say either "It doesn’t look like click fraud to us" or "You were never charged for those clicks".

Again - Use of a third party to mediate claims of click fraud by advertisers could do Google a world of good by taking the wait off their sholders and a good deal of the responsbility.

zetetic

03-09-2006, 09:24 AM

I agree with the sentiment that this settlement, as currently reported, would be great deal (some might even say "information highway robbery") for Google and its shareholders. However, the devil for advertisers--both past and present--lies in the details of the settlement which, as of yet, are not public.

What I'd like to see is whether this settlement includes any permanent requirement that Google modify its policies and procedures as they relate to questionable clicks. Is the requirement that advertisers file their reimbursement requests within 60 days gone for good or only as it relates to this settlement? Will Google be providing advertiser with more granular data about the source of each click? Will Google be working with third-party analytics solutions (like Yahoo has announced it is doing with WebTrends and others) to provide advertisers with a better 360 degree view of click validity?

While the settlement, once public, may answer some of these questions, my instinct is that, for at least the short-term, it's going to raise more questions than it answers.

Mikkel deMib Svendsen

03-09-2006, 10:45 AM

The main point is that the exact answer to the international element isn't known yet.

I think from a legal point of view it will have absolutely no impact. How would a US case like this have ANY impact on the legal system of, lets say, Denmark? I can't see how. If I bring up the case in a Danish court the judge is not going to say: We can't take this cae, under Danish law, because some judge in the US rule on it in the US. That would make no sense at all.

So, the question remaining is really only, as you also point out Danny, who will actually be paid back from the click fraud under this settlement: US adevertisers, or advertisers advertising in the US.

Jeff Martin

03-09-2006, 10:55 AM

Well only the attorneys are being "paid" I believe. Advertisers get some form of credit to keep using the same defunct system. I think this ruling would apply to US based companies advertising in Adwords.

Mikkel deMib Svendsen

03-09-2006, 11:06 AM

WOW, I did not get that part, Jeff. Is that really true? I mean, Google accept that their system let them charge for invalid clicks and then refund them into the same system - with more fraudelent clicks to come out of it. Is this a mad house or what? That truely sounds totally crazy. That solution would be completely un-usable for most of the campaigns I run in AdWords - many of them are time limited and after that time the client may not do any AdWords for a while - or ever. So where would I put those creadits? And how would that influence my legal liability with clients?

Puhh, I am happy that this stupid settlement will have no legal impact on what we can do here, what cases we can bring up and what settlements we may come to here - this one, I would not recomend ANYONE to sign. It's a piece of legal BS in my mind.

andrewgoodman

03-09-2006, 11:31 AM

dannysullivan

03-09-2006, 11:35 AM

Ah, Mikkel, that's how it seems to go often in class actions suits. You don't get money. You get product. Specifically to search engines, remember the LookSmart case was largely settled in people getting credit. And I agree -- I think you should get your choice, credit or cash. Imagine if you are no longer a Google advertiser? I can see it now, people selling and trading their ad credits on eBay or Google Base.

How does Google have a fresh start in the eyes of PPC advertisers?
I agree, I don't know that they do. Well, realistically, assuming this settlement is reached, they either have to change their ways and make you feel as an advertiser that they really are being responsive to you or they'll risk another suit.
The advertisers I have spoken to in the short term don't see how they have been helped and their view on Google and click fraud hasn't changed much.
It may be a bit too early to judge. The settlement was just reached, and despite it being a sweetheart deal for Google, it's also an admission they have had problems. Heck, I've got a quote where they flat out say they need to be better. If you don't see fast, good responsiveness improve very shortly after the settlement, then the cloud hanging over them will return.

From that perspective, it would make more financial sense to just pay up $90mm so I could sweep the issue under the rug every four years and keep the rest
That's assuming the price would stay the same. Say they change nothing. Say allegations of click fraud continue. Another suit could result, and that suit might go after a much larger settlement.

I think the existing settlement does give you some burden of showing things are much, much worse than what we guess at here (AP reports the settlement is less than 1 percent of Google's revenue over the period, so you can imagine them arguing that undetected clickfraud might have been in that range). But heck, in legal cases, anything can go. You could get a future case waged successfully for much more. Hence a desire for them to keep their nose clean.

From what I have heard the settlement makes no attempt at trying to change this flawed system.
I agree, the settlement doesn't seem to force them to do anything. But they have to do something, or else they'll be right back in the same mess. Color me slightly optimistic that we will see some more responsiveness. It has to happen quickly post-settlement, and it has to convince the likes of you, Jeff, and others who especially track this. If they are, we'll know, because we won't hear the complaints. If they are not responsible, the truth will tell.

How would a US case like this have ANY impact on the legal system of, lets say, Denmark? I can't see how.

I can't either and to be clear, that's the point I was making. I see nothing preventing advertisers in countries outside the US for taking action against Google for alleged clickfraud where Google has a business presence.

Who will actually be paid back from the click fraud under this settlement: US adevertisers, or advertisers advertising in the US.
Wish I knew. I see that as a key sticking point. There are going to be plenty of advertisers who can fairly claim that while based outside the US, they incurred clickfraud on ads Google served in the US and to a US audience. I think the settlement is going to need to address them. But since the details are still being worked out an approved, it's just we'll see mode for now.

Jeff Martin

03-09-2006, 11:39 AM

The system is "defunct"? This is news to me. Compared to...?
Compared to? Well you can look at Mikkel's last comment and probably figure it out. In addition, I would say compared to a system that doesn’t have an inherit conflict of interest.

jpchrysler

03-09-2006, 12:46 PM

The funny thing is that in the long-term, the elimination of click fraud doesn't represent a conflict of interest for a company like Google, but in the short term, an apparent conflict of interest does exist.

We've built our network from the ground up eliminating click fraud in the click stream, so we never see the revenue from potentially fraudulent clicks. As a result, we've been able to grow and provide the cleanest traffic anywhere.

This of course, keeps advertisers happy and conversions high.

In the short term, however, it's always difficult to provide refunds and actively police your network, particularly if the advertisers aren't clever enough to do it themselves.

I think it's very hard for companies to make the connection between the short term loss of revenue and the long term sustinence of revenue. One need only look at the barren wasteland of conversion present in the Tier II/III/IV PPC engines to see that it's human nature not to do so.

Hopefully the negative attention will be enough to force Google's hand, but like many here, I don't expect any dramatic change.

andrewgoodman

03-10-2006, 02:35 PM

Compared to? Well you can look at Mikkel's last comment and probably figure it out. In addition, I would say compared to a system that doesn’t have an inherit conflict of interest.

Mikkel's comments don't explain anything to me, and neither do yours. They do not seem to faze the many conscientious, careful, and profitable advertisers I see when I look inside our MCC at daily optimized spends across a range of industries.

Click fraud a problem? No one would deny it.

AdWords "defunct"? Far from it. The platform continues to be highly functional. The tone of these debates does a disservice to intelligent advertisers who know the difference between profit and loss, and who know how to measure. Google's $5+ billion in revenue isn't all gossamer.

Yeah, some of it is, admittedly:

Gossamer (http://www.google.ca/url?sa=l&ai=B2VAQaMYRRKfuJ4Xq-gGj3-ikAu7yxRCO8ITKAbHy4wfQuxsIABABGAEgtlRAzBBIlTlQnLi2 4fn_____AZgBj3GqARpvcmcubW96aWxsYTplbi1VUzpvZmZpY2 lhbMgBAZUCEOo-Cg&q=http://www.bizrate.com/mkt.xpml%3Fmkt_id%3D11542158)
BizRate.com Bargain Prices. You want it, we got it!

BKCB

03-10-2006, 04:09 PM

For many years, in the advertising industry, there have been traditional ways of dealing with "problem advertising" that is deemed the publisher's responsibility. These so called "Make Goods" are a perfect solution for the publisher, because they actually provide an opportunity to have the advertiser get more proof of the kind of ROI the publisher provides, thus "selling" the advertiser further on THEIR service. The hope is that the advertiser will get some great new accounts or sales that will make them even more dependent upon that publisher.

Even though the exact terms of the proposed settlement have not been disclosed yet, it is probable that Google will only be responsible for specific, agreed upon, click fraud click dollars and no more. Even though Google may be generous in allowing "debatable clicks" to be compensated, they probably will not do what is traditional for many publishers. That is, they give a credit of up to THREE TIMES the cost of the ad in EXTRA FREE ADVERTISING to be used any way the advertiser wants. This is done because of what I said previously, and because it avoided any CASH CREDITS on the part of the publisher. It also avoided any "contraes" (commission give-backs) to sales people who sold the advertising.

I wasn't aware, Danny, of that LookSmart "mostly credit" settlement. I agree with you that the judge should give the plaintiffs a choice of cash or credit. Or, Google should have to pay at least twice the amount of the click fraud dollars in extra free PPC advertising. However, would a cash settlement in any way tend to affect any commissions paid to anybody on the sale of PPC?

tonerman

03-11-2006, 01:41 PM

investing101

03-11-2006, 02:40 PM

It's a fresh start to remove four years of liability for $90 million. If the settlement goes through, all those potential claims go away....

...This settlement will settle it for all parties to the class, ie, all Google advertisers in the US.

So again, this case will settle all previous problems, unless an advertiser specifically opts-out...

The case that Google is seeking to settle is in Arkansas -- it is in state court; the class is NOT and cannot be "all Google advertisers in the US." This one state court case in no way removes four years of liability on the click fraud issue for Google.

investing101

03-11-2006, 06:24 PM

The worst source of my "invalid clicks" for my Adwords campaigns are Office Depot, Staples and CompUSA. All three of these companies have clicked on my Google PPC ads for over 800 clicks since 2002 at an ACPC of about $2.60

How do you know these clicks are coming from these companies? Do you trace IP addresses to them?

I would expect that legitimate market research by other companies would not constitute click fraud. Malicious clicks in an attempt to drive up your advertising costs would. If these clicks are spread out over three years, it would look like legitimate market research on their part. Also, do any of these stores offer internet access and customers are doing comparison shopping in the stores?

This is a commercial site; I have no affiliation with them (I haven't even read about what they're selling, I've just read this page in my research on Google -- for investment reasons): http://www.sofizar.com/adsense-fraud.php The description suggests that the biggest risk for click fraud comes through the Adsense partners; such clicks would be difficult to detect by looking for patterns.

I also suspect Google shareholders are engaging in a significant amount of click fraud. They are clicking on ads for no other reason than to generate revenue for Google. Yahoo has an extremely active message board on GOOG, people on the board repeatedly suggest that other investors seeking to see more revenue generated for Google, go out and click Google ads whenever they see them. Many have suggested doing searches using the high-dollar ad words and clicking on those ads. This sort of click fraud -- I guess you could call it "free lance click fraud" -- would be pretty difficult to detect by individual advertisers. Google could detect it (by noting a large number of clicks coming from one IP address and clicking on a lot of their ads), but since they're making money on every click, they have minimal incentives to stop it.

Link to the Google Yahoo message board: http://messages.yahoo.com/?action=q&board=GOOG (I'll try to keep it in mind to post a link to posts that suggest shareholders should be clicking Google ads to make the company money; it's difficult to follow the board since it's so active.)

.

tonerman

03-11-2006, 09:07 PM

How do you know these clicks are coming from these companies? Do you trace IP addresses to them?.

Yes, these clicks are from their IP address. For the record the IP addresses resolve to:

uschgw.officedepot.com
pencil.staples.com
helios.compusa.com

Overture defines click fraud as ""clicks arising for reasons other than the good-faith intention of an Internet user to visit a Web site to purchase goods or services or to obtain information" Google defines click fraud as "any method used to artificially and/or maliciously generate clicks or page impressions".

I would expect that legitimate market research by other companies would not constitute click fraud. Malicious clicks in an attempt to drive up your advertising costs would. If these clicks are spread out over three years, it would look like legitimate market research on their part. Also, do any of these stores offer internet access and customers are doing comparison shopping in the stores?

"do any of these stores offer internet access and customers are doing comparison shopping in the stores?"

I do not believe they offer in-store comparison shopping and when I last checked they did not have Google ads appearing on their sites.

Since they are presumably doing market research at my expense I suppose it could fall in the catagory of "obtaining information". However these clicks are certainly not made in good faith towards any possibility of a purchase and I am sure they know that it costs the advertiser money,

Tonerman.

BKCB

03-12-2006, 07:32 AM

Two published pieces say it all:

"Unfortunately, the settlement doesn't appear to resolve the basic question of what constitutes click fraud and when search engines are on the hook for it." = Lane's Gifts Click Fraud Lawsuit Near Settlement (http://blog.ericgoldman.org/archives/2006/03/lanes_gifts_cli_1.htm)

"The problem, according to Jessie Stricchiola, president of SEO firm Alchemist Media and a subject-matter expert for the plaintiff on the Lane's case, is that search engines are making a decision about what constitutes a valid click without having some of the more crucial information required to make that decision, including site visitor behavior, clickstream, and conversion data." = Click Fraud Settlement Viewed as Win-Win by Some (http://www.clickz.com/news/article.php/3590716)

andrewgoodman

03-12-2006, 11:23 PM

My Google Adwords records go back to the start of Adwords and I use dedicated landing pages for all Google Adwords PPC traffic. Over that time I have gotten 138,539 clicks. With this kind of traffic volume and other things to do I haven't spent a lot of time looking for click fraud. However, now that Google has settled a class action lawsuit which gives me some recourse for "invalid clicks", I decided to go looking for "invalid clicks". I didn't worry about anything that was not pretty significant (50 or more clicks).

The worst source of my "invalid clicks" for my Adwords campaigns are Office Depot, Staples and CompUSA. All three of these companies have clicked on my Google PPC ads for over 800 clicks since 2002 at an ACPC of about $2.60

They all clearly have no intent to consider a purchase. None of these companies have ever placed an order and their average visit time is in seconds and one page view. I assume they were comparing our prices with theirs because we both sell some of the same items.

I once wrote to Google complaining about Office Depots clicks (over 500), but nothing happened and this abuse continues now. Irrespective of the settlement or any recovery, what do you think I can do that would stop these clicks in the future?

Secondly, what recourse does anyone think this settlement might offer me, and how would you classify these clicks?

I appreciate any suggestions and advice anyone might offer me. Tonerman

In cases like this, especially if you can prove that competitors are wilfully doing it, you could initiate your own lawsuit against them. Obviously though I don't need to tell you that suing Office Depot would be a chilling prospect.

Unfortunately, based on history to this point, it's pretty clear that you can't reasonably expect Google to fight your legal battles for you. It's possible that many of the invalid clicks were *not* charged to you by Google (your raw logs will not show whether you paid for all the clicks you see there). It's also the case that they cannot try every case or see every motive. (Google sells ads, they are not a court.) So what they can do is refund suspicious activity and work harder to filter invalid clicks. Not much more.

I would be persistent with Google if you do have documentation. Ask them to look at the records you have that show competitors clicking.

andrewgoodman

03-12-2006, 11:25 PM

I also suspect Google shareholders are engaging in a significant amount of click fraud. They are clicking on ads for no other reason than to generate revenue for Google. Yahoo has an extremely active message board on GOOG, people on the board repeatedly suggest that other investors seeking to see more revenue generated for Google, go out and click Google ads whenever they see them. Many have suggested doing searches using the high-dollar ad words and clicking on those ads. This sort of click fraud -- I guess you could call it "free lance click fraud" -- would be pretty difficult to detect by individual advertisers. Google could detect it (by noting a large number of clicks coming from one IP address and clicking on a lot of their ads), but since they're making money on every click, they have minimal incentives to stop it.

.

Nah. I've been seeing those kinds of messages for years, on the Yahoo Finance boards for PPC-related companies much, much, much smaller than Google. These kinds of entreaties probably haven't had a material effect on even these small companies. I doubt they're more than a spit in the ocean for Google.

tonerman

03-12-2006, 11:48 PM

In cases like this, especially if you can prove that competitors are wilfully doing it, you could initiate your own lawsuit against them. Obviously though I don't need to tell you that suing Office Depot would be a chilling prospect.

Unfortunately, based on history to this point, it's pretty clear that you can't reasonably expect Google to fight your legal battles for you. It's possible that many of the invalid clicks were *not* charged to you by Google (your raw logs will not show whether you paid for all the clicks you see there). It's also the case that they cannot try every case or see every motive. (Google sells ads, they are not a court.) So what they can do is refund suspicious activity and work harder to filter invalid clicks. Not much more.

I would be persistent with Google if you do have documentation. Ask them to look at the records you have that show competitors clicking.

Thanks Andrew. I'll follow up on your advice with Google Monday.

investing101

03-13-2006, 02:22 AM

Yes, these clicks are from their IP address. For the record the IP addresses resolve to:

uschgw.officedepot.com
pencil.staples.com
helios.compusa.com

I don't know all the intricacies of the internet and don't know any programming languages, but I do pride myself on having a good basic understanding about the internet and how works. I'm at a loss in trying to understand how you know the IP addresses that visitors to your site are showing are coming from computers at Office Depot, Staples, or CompUSA? Do these companies act as their own ISPs? Or have tracking services determined through research what IP addresses these companies use and they provide that information to you?

I was not aware that a website owner could identify a company or person visiting his site with just the IP address -- that is without some type of legal request to the ISP the company or person is using.

I would appreciate it if anyone could explain how this is done.

Thanks in advance,

--Joe

Jeff Martin

03-17-2006, 01:39 PM

Two published pieces say it all:
Yes they do BKCB. The system hasn't changed. In the end Google gets a pretty good deal:

1. Not having to show any data to experts to validate their claims or processes as the court had ordered.

2. They only have to issue credits in a small amount (for them & compared to revenues) which go right back into a system that lost advertisers their money in the first place.

3. They still get to have all of their methodologies shrouded in secrecy and conflicts of interest.

Legal Score Recap:

Google:1 | Advertisers:0

searcher

04-11-2006, 06:13 PM

I set the request date (back one month) hit enter (or submit) and the dates revert back to 'present' month. I emailed google asking for the reports, got the standard automatic reply - we'll get back to you within ____ days. That was at least 3 weeks ago and I still haven't received *any* acknowledgement. $2000 a month down the drain....

I thought Google was better than that. In fact I am sure I read (maybe here?) that someone had complained and actually got a refund. -but I'll be darned if I can find the thread-

at $1.50 per click for one keyword, $2000+ gone and maybe 3 sales. Something is very wrong with this picture.

Any suggestions?

tonerman

04-11-2006, 07:52 PM

Jeff Martin

04-27-2006, 01:14 PM

Brian Kabateck, an attorney representing plaintiffs in a Federal Court "click fraud" class action pending against Google in California highlighted these key points in the settlement (found these on Andy Beal's blog):

--Google is not required to change the way it does business. Google can continue to bill its customers for invalid or fraudulent clicks, and it is not required to improve or change its click fraud prevention efforts.

--Industry analysts believe a conservative 10-to-20 percent of all on line advertising is fraudulent. In the past four years, Google has earned over $15 billion in advertising income; thus, more than 1.5 billion is potentially at stake. The $90 million settlement represents less than 6 percent of the money Google has made from fraudulent advertising.

--Of the $90 million proposed settlement, the only cash component is $30 million set aside to pay for attorneys' fees.

--The remaining portion of the $60 million settlement will be in credits to future Google advertisers, but provides nothing to the tens of thousands of customers who no longer are Google advertisers. Customers no longer doing business with Google get nothing.

--Google will never actually pay $60 million to its customers. The $60 million in credits is based on the assumption that all click advertising is fraudulent. If the actual rate of invalid or fraudulent clicks is between 10-to-20 percent, the most credits Google will be required to give to its advertisers will be between $6 million and $12 million.

--The sole determination of whether a click is invalid or fraudulent will be made by Google. Thus, the pool of credits can be substantially reduced by Google at its sole discretion.

--Even in the best-case scenario, customers will never receive a full refund credit for fraudulent advertising. According to the settlement terms, customers will only be refunded about one half a percent (0.5 percent). For example, if Google determines the customer was charged $10,000 for fraudulent advertising, the customer will only receive $50 in credit when it next advertises with Google.

--Advertisers will have to affirmatively apply for the credits. Because the credit refunds are so insignificant, it is unlikely most advertisers will make applications for the credits.

--Under Google's current customer agreements, anyone with grievances with Google can receive up to a 100 percent refund. If this settlement were approved, it would supercede current agreements and reduce the refund by 99.5 percent.

As I said they day Google agreed to the settlement, the main benefactor here is the lawyers and Google, period.

The most a victim can expect to receive is about a half a cent for every $1 lost to click fraud. Wow, glad my click fraud service is free.

If you find this as absurd as I and many of my collaegues do, you have 30 days after you recieve your notice from Google to opt-out. If you opt-out you will not fall under this rediculous settlement.

New Score:
Google: 2
Advertisers:0

--------------------------
Pink Floyd:
Money, it’s a hit.
Don’t give me that do goody good bullsh**.

searcher

04-27-2006, 02:16 PM

Google still has not replied to my request for a detailed report for the last few months of adword clicks (although I quit adwords about a month a go). Does anybody have any idea what would happen if I filed unauthorized charges with my credit card company for these un-proven clicks? Would / Could google drop us from their listings altogether? I'm considering about $2500 over a 6 wk period - @.75 per click resulting in 3 sales.

These days that's a good chunk of change to most anyone.

Ted27

05-21-2006, 07:33 PM

This whole click ads settlement, means little to me. I spend around £2,500-£3K a year on the advertising, and I beleive my share of the fund would amount to about 0.4% which is around £10-£12 and hardly worth claiming?

There are practical problems with Click Ads. When I originally launched my site, friends and family kept visiting it to look at it, and clicked on the Click-Ads instead of typing the URL, whcih cost a significant amount out of my meagre early budget. This still goes on today, as I expect many customers will return to your site, by doing the search and clicking through several times.

I don;t think this is right, why should you pay several times for the same customer to click through?

What would be far more practical is if google only charged you for click throughs from unique IP Addresses (or MAC Adresses if possible) that month.

This would eliminate the effect of bigus click throughs, doubel clicks and also the same customer clicking several times - you don't pay everytime someone flicks to your advert in a newspaper or magazine?

I realise on the scale of what google do this may mean collating a huge amount of data and put the click value up, however this would come down rapidly over time due to Moore's Law (the number of gates on a chip double every 18 months ergo computing power doubles). I also reckon they could do this for $90M and I wouldn't mind my £10 going towards that, it would save me money in the long run!

Ted27

05-21-2006, 08:16 PM

I don't know all the intricacies of the internet and don't know any programming languages, but I do pride myself on having a good basic understanding about the internet and how works. I'm at a loss in trying to understand how you know the IP addresses that visitors to your site are showing are coming from computers at Office Depot, Staples, or CompUSA? Do these companies act as their own ISPs? Or have tracking services determined through research what IP addresses these companies use and they provide that information to you?

I was not aware that a website owner could identify a company or person visiting his site with just the IP address -- that is without some type of legal request to the ISP the company or person is using.

I would appreciate it if anyone could explain how this is done.

Thanks in advance,

--Joe

You can rely on simple networking commands:

If you got to any PC and open the Command prompt and type

PING PENCIL.STAPLES.COM

You will test the network connection is present, you can then see the IP Address: 12.40.61.2

Your webserver can usually record the IP Address of anyone visiting your site. There is a way of reverse looking up the domain from the IP address but I forget it, so you can use Trace Route instead which shows you all the hops from server to server that have been made. So if you then type:

TRACERT 12.40.61.2

You will see a list of servers, ending with the something like the following:

15 105ms 95ms 95ms pencil.staples.com [12.40.61.2]

A little technical I now, but not rocker science either. It just shows how a little knowledge can help you uncover a lot of information. This can sometimes help pinpoint who was visiting your website. This approach is not 100% infallable and can be misleading so should be used with some caution.