How is Google Policing Click Fraud?
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Click fraud continues to be an issue for search engine advertisers, despite Google's claims that it is a negligible and self-correcting problem. Can we really trust Google to be telling the truth? Or is the search engine so addicted to PPC revenue that it might lie or at least redefine what clicks are considered fraudulent in the hopes of preventing a cost per action model from taking hold?
Internet advertising is now responsible for two percent of the current budget for all advertising. With pay per click responsible for the bulk of this money, click fraud (bogus clicks) has become a very important problem to advertisers and search engines alike. Both Google and Yahoo have made settlements to advertisers in court, and both have joined the IAB (Internet Advertisers Board) in an effort to standardize auditing and accreditation. Another reason the search engines joined the IAB is to show that they are actively policing click fraud.
Percentages don't always tell the full story, so here are some hard numbers. It is projected by the investment bank Piper Jaffrey that online advertising will increase from $27 billion in 2006 to $61 billion by 2010, or 20 percent of total advertising revenue. If you look at the chart below, you will see that pay-per-click advertising is projected to make up an increasing proportion of online advertising.
Current and Projected Internet Advertising Spending
Google Does Some PR
Advertisers are getting antsy about click fraud policing. The loads of bad press resulting from Outsell Inc's projection in 2006 that the incidence of click fraud could be as high as 15 percent certainly didn't help. The industry also did not appreciate Eric Schmidt's suggestion that advertisers should just "let it [click fraud] happen." Google has also been taken to task for its secretiveness, with advertisers wondering whether the biggest search engine currently cares about policing click fraud at all.
With Google getting bad PR from the press over click fraud, and Yahoo claiming to polices "bogus clicks" better, Google has quietly been working on policing what they call "invalid clicks." The search engine claims that its secrecy in its policing techniques is to prevent click fraudsters from reverse engineering their security protocols. Shuman Ghosemajumdar, Google's product manager for trust and safety, explained sketchily how Google tracks invalid clicks (note the distinction Google makes, more on that later) and asked that the reporting press give a more balanced report on click fraud (instead of basing it all on Outsell Inc's report). You'll find this information on his blog at http://www.shumans.com/. First let's take a look at the various forms of click fraud, and then we will see what Google has to say.
Next: Forms of Click Fraud >>
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