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Old 06-30-2005   #1
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Google Sued In Second Click Fraud Lawsuit

Reuters just released news: Google sued over "click fraud" in Web ads
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SAN FRANCISCO, June 29 (Reuters) - A seller of online marketing tools said on Wednesday it sued Google Inc., charging that the Web search giant has failed to protect users of its advertising program from "click fraud," costing them at least $5 million.

Click Defense Inc. filed its lawsuit, which also seeks class action status, on June 24 in U.S. District Court in San Jose, California.
Aside from the lawsuit, will this lead to serious action by Google and other search engines to provide 100% click fraud guarantee and not any less?
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Old 06-30-2005   #2
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Great catch Nacho!

How this pans out will probably determine the future of search marketing as we now know it.

Its interesting that its just Google - rather than Yahoo!/Overture - or Yahoo!/ Overture and Google - who they've decided to target....
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Old 06-30-2005   #3
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maybe its because they pulled their ads?

Well maybe that has something to do with the fact that Google apparently pulled all the adverts for click fraud?

This was reported here.

Recent reports suggest that this was just a glitch with google, but it could have something to do with it?

Last edited by MTWB : 06-30-2005 at 08:02 AM. Reason: additional link added
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Old 06-30-2005   #4
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It's all about the AdSense

The reason that ClickDefense is targeting Google, I would suspect, is that Google has a much worse problem with Click Fraud. Wherever incentive exists to commit fraud, there will you find fraud.

Incentive exists anytime a company distributes their listings to a huge network of affiliates like Google does with AdSense. As long as they do that, people will continue to try to game them.

That's also why advertisers see such pathetic results from the smaller networks, like Findwhat, Enhance, etc - they deploy across a wide network of affiliates who have incentives to try to print their own money. Sadly, tools exist that allow unsophisticated people to beat Google and Findwhat by creating false clicks and defrauding advertisers.

Google needs to do something to prevent this sort of thing, or its stock price will fall precipitously as advertisers get frustrated.

Click fraud is THE reason, I suspect, why Overture has been slow to release their own contextual product.
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Old 06-30-2005   #5
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I wonder if the courts rule that they will have to issue refunds
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Old 06-30-2005   #6
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The funny thing is that right now, Google couldn't offer real refunds because they don't actually know how bad that click fraud is on their network.

They can only write checks to placate advertisers. CD is trying to take it a bit further (and trying to get a little publicity), but I don't think it's a long term winning technique. We've got to work with the search engines. On our network, we control all of the data, so we can effectively monitor and prevent click fraud. We do it every day.

It's not terribly difficult to do - technically it's pretty easy - but the search engines just aren't doing it for either a lack of imagination or an overabundance of greed.
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Old 06-30-2005   #7
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No matter how sophisticated Google makes their click fraud detection algorithm, it will never stop 100% of click fraud. It's software, not magic. SEM's that insist on opting into Google's content network will always pay for some click fraud, just like every retail shop will always pay for some shoplifting.
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Old 06-30-2005   #8
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Danny posted a followup blog on the story and Gary Price tracked down the full text of the complaint filed in the Google click fraud suite.
Quote:
If you're interested in reading the complaint that Click Defense filed with the U.S. District Court, we've tracked down a copy. It's available here (PDF; 18 pages).
Very well worth a read for those "Invisible Web" searchers.
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Old 06-30-2005   #9
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This is getting some quick attention and rightly so. Seems everyone is blogging on this. I put one in too....
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Old 06-30-2005   #10
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If the suit sticks, I wonder how G will defend itself without divulging any sensitive information (which is pretty much everything if you try to ask them what steps they take against click fraud). I don’t think the "We all have doctorates and big algorithms and hey....were Google." defense is going to work.

How do you convince a jury (mixed with maybe some tech literate folks) that your doing everything you can to fight click fraud, warn advertisers of the potential risks and refund fraudulent clicks without talking about how specifically you do it? Not to mention that you don’t mind taking profits away from your shareholders and that you shouldn’t be subjective to independent auditing.

Not that there was ever a good time to not know if and how much of a fraud problem you have, but with the services out there, even free ones, there’s no excuse for us not to know how big of a problem this represents for us and our clients. We need to be proactive, not reactive.
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Old 06-30-2005   #11
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If CD can demonstrate that Google's clicks are somewhat fraudulent, then a burden falls upon Google to admit whether a) they were essentially negligent in not developing a technology that can monitor sophisticated click fraud or b) they were for all intents and purposes party to the click fraud because they knew that it was occurring and didn't do anything about it.

We know for a fact that click fraud can be done. We know for a fact that we can detect and filter out click fraud that the other networks allow. If it ever gets to court, it wouldn't be terribly hard to demonstrate how Google can be gamed and hold them to some account for it. But to single out Google is a bit disingenuous. The conversion rates speak for themselves - Google traffic is still of a very high quality compared to the smaller search distributors, who are also suffering from click fraud.

But in their cases, perhaps there's no point in kicking horses that are already down and most likely fairly close to being on their way out.
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Old 06-30-2005   #12
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As I noted on my blog, this one gets settled out of court. But I think it is the start of a major change to the system.

I have been asking for a phone bill like receipt. Though I know I will be reading a phonebook every month it would be worth it.

Hey there is not hiding... especially now with the CPM model where people can choose by site where ads will be displayed... how many people are going to go straight to the source and buy traffic from the good ones? and yet Google is disclosing all this... so they must have the other side ready to do the same...
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Old 06-30-2005   #13
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How this pans out will probably determine the future of search marketing as we now know it.
No, I don't think so - not at all. I did very well on SEO before PPC came around and trust me, I will do just fine after it dies out. Maybe Google and Yahoo would die too if PPC was killed quicly (maybe by a click-bot-in-a-worm type of attack) but I am pretty sure new engines, of some kind, would take over the search ,market - and then I'øll be ready to uptimize, as I have always done.

No, search marketing will not die just because a few greedy PHDs take one concept way to far
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Old 06-30-2005   #14
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Originally Posted by Mikkel deMib Svendsen
No, I don't think so - not at all. I did very well on SEO before PPC came around and trust me, I will do just fine after it dies out. Maybe Google and Yahoo would die too if PPC was killed quicly (maybe by a click-bot-in-a-worm type of attack) but I am pretty sure new engines, of some kind, would take over the search ,market - and then I'øll be ready to uptimize, as I have always done.

No, search marketing will not die just because a few greedy PHDs take one concept way to far
I hope that smiley face meant you were joking....
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Old 06-30-2005   #15
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I hope that smiley face meant you were joking....
Yes I was - there is in fact a lot more than a few greedy PHDs - they have managers, MBAs and executives of various kinds that are just as greedy too.

I did not joke about the fact that to me they can die out if they want - or rather, if they don't want to do anything serious about the click fraud issues. And trust me, I will still be here doing what I did even before PPC was born even if this mess does eventually kill the major players of today.
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Old 06-30-2005   #16
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Et Tu Mikkel?

I was just talking a couple of days ago with a journalist and a colleague of mine about how long it would take G to go from "the cool guys with a cool technology" to being subject to the types of treatment larger/public companies get like MS.

Hhmmm...M$....Goog£e

Oh I dont think they are there yet. G is treading water just fine but they need to get out from the click fraud rock before its drags them to the bottom.
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Old 06-30-2005   #17
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Still have to go to BLOG as Better Listings In Google as the funniest acronymn of the month.
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Old 06-30-2005   #18
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hate to say i told ya so, but i told ya so.

yeps. i called this around the first of the year ...not to mention i am one the most vocal people on the board regarding click fraud.

see, i have the luxury of not only being involved in internet and search marketing, but also very technical in nature. i understand PCs and the internet down to the TCP level and click fraud is scary!!!!!

see, click fraud is almost impossible to catch. yea, they can find the newbie script scammers, the adwords clickers and the jealous compititors quite easily; however, it's almost impossible to catch the true pross. the people who know and understand basic packet transfer technology and who possess the skills to hide IPs, travel on spoofed IPs and/or look anonymous as they surf. (and quite honestly can create clicks without even surfing ...more on that later)

for one, Google should never charge a adwords client for a click unless google can capture the IP of that click. I cannot get any of my contacts at google to commit to an answer regarding this - which in itself is shady and sketchy.

let me sa it again: GOOGLE SHOULD NOT CHARGE ADWORDS CUSTOMERS FOR CLICKS UNLESS THEY CAN CAPTURE AN IP.

If adwords rep wants to weigh in here - we are all ears - but don't hold your breath.

I just want this simple concept either confirmed or denied. Is that too much to ask?

Click fraud is going to continue to be a major problem. all you Google stock holders sitting above 300 should sell now and take your massive winnings. This is the beginning of a landslide.

people will soon love to hate the darling Google and it's coming very soon.

...like it or not, watch and see. ...and once again, i'll be here to say i told you so and will eat humble pie if i am wrong.

Last edited by sebastian : 06-30-2005 at 08:02 PM.
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Old 06-30-2005   #19
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First of all, of all the PPC companies, I get the highest quality traffic from Google. #2 is Yahoo and the rest well....they are all ripe with fraud. Is this a problem. You bet. I am very hopeful that the outcome of this suit will trickle down to make the 2nd and 3rd tier companies provide real PPC clicks and actually provide a useful service.
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Old 06-30-2005   #20
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It is a great publicity stunt for Click Defense as well, since they are claiming their software can spot nearly double the amount of click fraud that many industry specialists say is standard. It is getting picked up all over the place, but I have noticed a few of the articles (as well as blogs) are spinning that Click Defense are "opportunists".

If you read the articles and thought 'Yikes, I better get something that can track my clicks better and make sure I am not being hit with nearly 40% fraudulent clicks too', which of the many services would you choose to go to? I bet Click Defense has had their best business day today by far.

However, as a spin-out of this, it will be interesting to see if Google begins suing more suspended publishers to get money back that was already paid out before they were caught for fraudulent clicks.

Yes, fraudulent clicks do exist, but something strikes me as this being more for publicity than anything else, which I probably wouldn't have thought of if this company hadn't been promoting click fraud detection software in the first place.

Last edited by Jenstar : 06-30-2005 at 10:08 PM.
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