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

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Google Incorporated claims the company loses about $1 billion US a year to "click fraud" and similar scams on its ad service. Special software that can click on an ad repeatedly can be used to inflate a rival company's advertising costs or boost a site operator's own revenue gained from displaying the ads. Advertisers have been asking Google for a clearer picture of the reach and effectiveness of their ads. Google does not charge its advertisers for clicks it determines to be invalid, effectively cutting into the company's revenue.

"Our invalid clicks rate has remained in the range of less than 10 per cent of all clicks every quarter since we launched AdWords in 2002. Click fraud protection is something we take very seriously, and it requires a great deal of research and development to do effectively. [The] figures illustrate the significant level of proactive protection we provide, and how this has resulted in minimizing the actual impact of click fraud on advertisers," wrote Shuman Ghosemajumder, Google's business product manager for trust and safety, on the company's Inside AdWords blog late Thursday.

News source: CBC News

#1 disturb3d on 04 Mar 2007 - 00:35

Umm, would it not be MUCH cheaper to pay somone ~£350 a week to check for these 'auto click' programs everday and new methods of doing it so they can find a way to block it?

(1 reply) #2 billyea on 04 Mar 2007 - 03:49

Can't google simply ALSO not pay the sites for fraudulent clicks? Then it wouldn't cut into their revenue.

#2.1 +Smigit on 04 Mar 2007 - 06:03

They can refuse payment but Google has to a) confirm your clicks arent legit and secondly b) that you are the one registerring the illegitimate clicks. They cant just not pay ppl when illegitimate clicks are detected as you will likely soon find ppl using these tools for sites other than their own to attack peoples income, such as some lame attack on certain blogs ect (severy high profile sites do use adwords afterall...hell Neowin is an example).

#3 Jelly2003 on 04 Mar 2007 - 07:10

Google isn't really loosing money here, it's their responsibility to provide a service that can't be corrupted, imagine all the money that they'd loose if they let all click fraud go unnoticed, I certainly wouldn't use their service.

#4 2xSilverKnight on 04 Mar 2007 - 11:38

in today's world everything is corrupted. no body can do a damn about it until it crash hard enought.

(1 reply) #5 Croquant on 04 Mar 2007 - 15:23

Keep in mind that these are really just hypothetical billions that they "loose"
Just like how the RIAA "looses" money every time someone pirates a song that they weren't gonna buy anyways.

#5.1 Howard on 04 Mar 2007 - 19:46

Not precisely. Google is actually paying out the money, whereas the RIAA is just losing potential sales. It's not as if the RIAA pays out each time a music album is downloaded saying "we know you're a pirate, but we aren't devoting the resources to prove it".

(1 reply) #6 cpu on 04 Mar 2007 - 21:47

hmm... google ads? what's that?

127.0.0.1 pagead2.googlesyndication.com
127.0.0.1 googlesyndication.com
127.0.0.1 www.google-analytics.com

You can't image, how fast the web after this change in hosts... :-)

#6.1 XP1 on 04 Mar 2007 - 22:42

Quote - (cpu said @ #1)

0.0.0.0 pagead2.googlesyndication.com
0.0.0.0 googlesyndication.com
0.0.0.0 www.google-analytics.com

#7 Magallanes on 05 Mar 2007 - 17:26

Google ADS in fact close any contract with some webpages, in facts some legal webpages are been banned of use google ads because "fraudulent clicks". Remember that fraudulent clicks can be generated from anyone, even a visiting, so it's possible to "cyberterrorism" a webpage doing a overclicking in googleads.

Anyways, googleads don't lose any penny because their customers paid for any click.

#8 groingo on 05 Mar 2007 - 22:00

And I should care?

#9 obsolete_power on 06 Mar 2007 - 19:30

I don't care! It is their fault for not having a system able to filter out illegitimate clicks. Until they do, I hope they continue to lose money!

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