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December 30, 2004
Google and Overture Define Click Fraud
What is click fraud?
The issue has been bandied about for years by online advertisers, yet click fraud remains misunderstood. Even with a spate of media attention devoted to the subject in the latter part of this year, a recent panel at Search Engine Strategies in Chicago revealed a lack of industry-wide consensus on what constitutes an act of click fraud.
So ClickZ News asked experts at Google and Overture how the two leading search engines define click fraud, and what proprietary mechanisms they have in place to protect advertisers against it. This is the second article in a series on click fraud.
Click Fraud Defined
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," according to spokesperson Dina Freeman.
Google is a bit more specific, defining click fraud, "or invalid clicks, as any method used to artificially and/or maliciously generate clicks or page impressions," according to Salar Kamangar, director of product management.
Examples of invalid clicks, according to Kamangar, include: manual clicks on an ad to purposefully increase the ad spend; deliberate clicks on an ad to increase profits by site owners hosting the ads; and automated clicking tools, 'bots, or other deceptive software.
Both Overture and Google have proprietary anti-click fraud technology, which they refine on an ongoing basis. Both keep the system details secret for security reasons.
Overture's "click protection system combines proprietary systems, filtering technologies, and human intervention," according to Freeman. The company says it's been continually refined since 1998.
"Our system operates 24 hours a day, monitoring each click and filtering out those that are questionable, or clearly unqualified," Freeman said. "We track search and click patterns across more than 50 data points, including IP address, users' session information, browser information, and pattern recognition."
For its part, Google uses its own proprietary technology to analyze clicks to determine whether they fit a pattern of activity intended to artificially drive up an advertiser's costs.
"Our system automatically distinguishes between clicks generated through normal use by users, and clicks generated by unethical users and automated robots, enabling us to filter out invalid clicks," Kamangar said.
Google provided three examples of techniques it uses to detect invalid click activity. First, it employs standard click monitoring techniques; examining every click into its system based on signals such as IP address, duplicate clicks, and other basic click patterns for invalid click activity.
Second, Google uses advanced monitoring techniques developed by a team holding PhDs in computer science, statistics, and mathematics to detect and handle invalid click activity. "This group has developed innovative and effective proprietary security mechanisms which we continually augment and improve to adapt to changes in invalid click behavior," Kamangar said. "We invest in research and development to continually upgrade our detection mechanisms to proactively combat invalid click activity."
Finally, Google employs a team of technical specialists whose job is to manually investigate individual cases where click fraud is suspected. "The team uses specialized tools and a wide variety of techniques based on extensive experience tracking and monitoring invalid click activity," Kamangar said. "When signs of invalid click activity are detected, this team has advanced resources for identifying the perpetrators of this activity."
If a Google review reveals invalid click activity, advertisers are credited and publishers may have their payments adjusted. Additionally, Google reserves the right to take legal action, as it did against Texas-based Auction Experts International in a lawsuit it filed in November.
"Any advertiser or publisher participating in invalid click activity or other related offense is subject to being banned from our system and subject to prosecution," Kamangar warns.
By Rob McGann
December 30, 2004
http://www.clickz.com/news/article.php/3453201
Posted by Hans A. Koch at 11:44 AM | Comments (0)
December 15, 2004
How Click Fraud Affects Pay Per Click Advertisers
Recently, an article appeared on CNET stating that Google has filed a lawsuit against a Texas-based company alleging they fraudulently abused the Google PPC system to profit from the advertisers' ad spending.
This is quite interesting, as it proves that click fraud is becoming more of a problem than ever and search engines are finally taking action.
As well, there was a case earlier this year where a California man tried to blackmail Google by threatening to release a software program that could cost them millions of dollars in fraudulent clicks unless they paid him $150,000. Fortunately, Google fought back, and the man was indicted. Other than that, this is really the first time that a search engine has taken legal means in order to fight scammers.
Depending on how much you spend on PPC advertising, you may or may not feel the results of such fraud. In some competitive industries, clicks reach a cost of $5 and more. Those particular ads represent the biggest payoff for the perpetrators, so top advertisers definitely feel it when as much as 5% to 15% of their spending goes to waste.
One of the main problems is that Google and other search engines offer revenue-sharing programs, such as AdSense, for publishers who are willing to put Google content ads on their websites. Monitoring thousands and thousands of publishers can be a daunting task, and you can bet that, human nature being what it is, some website owners click on their ads every now and then to boost their revenue. While individually that may not be much money lost, collectively it becomes a huge issue.
Click fraud can also occur in several other ways. Whether it's an automated bot that is programmed to click on your ads, a company employing low-wage workers in India or China to click on ads from home, an organized setup in Omaha, Nebraska complete with rotating IP addresses on all 300 computers in the warehouse, or your own competitor himself trying to deplete your budget, it's getting pretty hard to track and monitor.
I've also observed that most search engines are very secretive about their fraud monitoring systems. While the reasoning behind that is clear, it doesn't really tell us exactly how they are battling the problem. This leaves advertisers on their own to try and figure out what's going on. Luckily, there are tools available, such as Who's Clicking Who and Clicklab that track your advertising activity for you and report any suspicion of fraud.
My personal recommendation would be to carefully monitor your own traffic using a third party service. It's an added cost, but if you spend several hundreds per month on PPC advertising, it'll be worth it. If you notice any unusual activity, don't hesitate to contact the search engine, investigate the issue, and request a refund for those clicks. Most of the time, they will be more than happy to comply with your request.
Unfortunately, I expect click fraud to grow and diversify, so it's important that you have the knowledge and tools to protect yourself against it.
About the Author:
Boris Mordkovich is the editor for a PPC resource site, PayPerClickUniverse.com. PPCU offers articles, reviews, weekly blog, and more to help small businesses get the most out of Pay Per Click.
Boris Mordkovich | Contributing Writer | 2004-12-15
Posted by Hans A. Koch at 11:04 AM | Comments (0)
December 13, 2004
Eight Months of Click Fraud in Oregon
When Scott Hendison launched his Portland-based online insurance consulting business OregonHealthInsurance.net in the summer of 2003, he opted to promote it using keyword search advertising on Google and Overture.
After initial happiness with the results, eight months later Hendison discovered someone with a Portland-based IP address had been clicking on his ads at over 20 times the frequency of a person looking for an online insurance quote.
Hendison calculated that, at a cost of $6 per click, the extra activity from that IP address alone was costing him between $200 and $300 per month.
It was a classic case of click fraud, the intentional defrauding of online advertisers by clicking on ads in order to drive up their marketing costs.
"I thought I had found an easy way to get sales leads, but when I looked closely at my Web logs, I saw one IP address showing up with very suspicious frequency," Hendison said. "No one can be that stupid to need to search for a health insurance quote a couple times a day, every day of the week, every week."
After doing some research, he located a company called WhosClickingWho.com, which specializes in preventing, detecting, and eliminating click-fraud on behalf of customers like Hendison. "It was either that or discontinue pay-per-click advertising entirely," Hendison said. "As a local advertiser with a small, independently owned business, an extra $300 added to my budget per month was killing me."
For $30 dollars a month, WhosClickingWho.com allowed Hendison to get more data on the suspect IP address and send a customized pop-up window to the person behind it when he or she clicked on his ad. The message, which Hendison wrote, read, "Stop, you weasel! I know who you are and have reported you to the proper authorities."
"I never got another click from that address afterward," Hendison said.
Hendison's story is one local example of a poorly understood trend search engines and advertisers small and large around the country are growing more concerned about, said John Squire, vice president of product management at Coremetrics.
"I recognize three aspects to click fraud nowadays," Squire said. "It's bigger than most people realize. It's hard for your average person to understand. And, for larger advertisers at least, it's easy to ignore."
But for local advertisers like Hendison, the difference between being cash flow positive versus negative could be the result of a single individual attempting to defraud them, Squire added.
"For those local guys, Clicklabs, WhosClickingWho.com, ClickAssurance and the rest offer services that address a critical piece of the market and probably will be profitable," Squire said.
For his part, Hendison took the additional step of reporting the incident with documentation to both Google and Overture, asking for reimbursement. He estimates he was reimbursed for 95 percent of the fraudulent click charges by Overture. He was reimbursed for only 50 percent of the charges by Google, which he said took longer to get back to him, and later contested whether what looked like minimal traffic qualified for click fraud at all.
Google spokesman Steve Langdon declined to comment specifically on the incident, saying, "Our customers are very important to us, and we very much want to make their experience a good one."
Hendison closed his business due to cash-flow problems in May 2004, choosing to devote himself full-time to his other business, an IT consulting company called PortlandConsulting.com. He continues to invest in pay-per-click advertising through both Google and Overture for that company and issues his own customers the following advice on keyword search advertising: "If you're spending at least $300 a month in pay-per-click advertising, then a $30 a month investment to prevent click fraud makes sense."
Since Hendison first purchased the product, the price of WhosClickingWho's
yearly package service has gone up to $499 a year, which amounts to
approximately $42 per month. Customers who pay on a month-to-month
basis are charged $79 a month.
By Rob McGann | December 13, 2004
http://www.clickz.com/news/article.php/3446801
Posted by Hans A. Koch at 10:36 AM | Comments (0)
December 11, 2004
Check for click fraud
Pay and pay and pay per click
If you're running a PPC campaign on Google or Overture, you're probably happy to "set it and forget it." Especially if you have multiple campaigns, many keywords and lots of ads, it's hard to find time to manage all the details--and in aggregate, if the campaign is producing traffic and paying for itself, why worry? Because you may be missing malicious clicks! Here's what to look for.
We just set up a campaign for a client in a competitive space, and saw a pattern that looked like click fraud--which we easily could have missed. As part of our management, we tweaked the existing campaign that the client (with assistance from the Google AdWords team) had set up. Fairly complex campaign, with lots of ads, lots of keywords targeted by a bunch of ad groups. Looking back over the first few days, we were pleased to see that the clickthru rate had gone up...way up. To 10.6%, from just over .1%. A little too good, maybe...like twice what we might hope for.
By digging into the specifics, we found that two ads, in totally different campaigns but with the same keyword phrase as a target, had CTRs of 70.2% and 30.6%. What this means is that a competitor, or prankster with nothing better to do, is sitting there all day, clicking on our ad--and rolling up the charges, at over $3 per click. Not only that, but because we set a daily limit, our ad disappears--the real reason a competitor would do this.
Fortunately, Google is very aggressive about pursuing click fraud. For another client, they saw a suspicious pattern and notified us, providing a refund. In this case, we were on top of the specifics, and have reported the abuse. For larger clients where we are managing a PPC campaign with access to conversion rates, we have triggers in the software to alert us to problems. For clients doing PPC themselves, or for small campaigns where it's all tedious, manual management, this is just a reminder to audit what's happening from time to time.
Posted by John Rasco on December 11, 2004
http://refreshweb.typepad.com/refreshweblog/2004/12/check_for_click.html
Posted by Hans A. Koch at 12:33 AM | Comments (0)
December 04, 2004
Google CFO Say Clickfraud Needs Fast Fix
Gary blogged earlier about a Financial Times article on clickfraud. Here's a related one from CNN, inspired by Google CFO George Reyes telling an investor conference recently, "I think something has to be done about this really, really quickly, because I think, potentially, it threatens our business model." For more, see Google CFO: Fraud a big threat.
Reyes later comments accurately that clickfraud is not just a Google problem. Others such at Yahoo, eBay and Amazon also are impacted. But as for a solution, nothing was offered.
Jessie Stricchiola, one of our regular speakers at Search Engine Strategies on the topic, is quoted saying the search engines aren't doing enough about the problem -- and she says despite the refunds Google issues, they are the most "stubborn" and "least willing" to work with advertisers.
For more on the topic, see also my past blog post Clickfraud: Whose Problem, FTC, Search Engines Or Advertisers?. FYI, our Auditing Paid Listings & Clickfraud Issues panel returns to Search Engine Strategies next week in Chicago. Once again, both Google and Overture have declined to take part.
Posted by Danny Sullivan on Dec. 7, 2004
http://blog.searchenginewatch.com/blog/041207-112607
Posted by Hans A. Koch at 07:18 PM | Comments (0)
December 02, 2004
Google CFO: Fraud a big threat
Google exec calls click fraud the "biggest threat" to the Internet economy, urges quick action.
NEW YORK (CNN/Money) - A top Google official said that growing abuse of the company's lucrative sponsored ad-search model jeopardizes the popular Internet search engine's business.
"I think something has to be done about this really, really quickly, because I think, potentially, it threatens our business model," Google Chief Financial Officer George Reyes said Wednesday.
Reyes, speaking at an investor conference sponsored by Credit Suisse First Boston, was referring to an illegal practice known as "click fraud" that occurs when individuals click on ad links that appear next to search results in order to force advertisers to pay for the clicks.
In cost-per-click advertising, marketers pay a search engine, like Google, Yahoo! or FindWhat.com, when users click on links to the advertisers' Web sites. Google and others also generate revenue by posting sponsored ad links on other Web sites and splitting the fees generated by user clicks.
The paid-search model is now the fastest-growing form of Internet advertising, according to the Interactive Advertising Bureau.
But analysts, fraud experts and now Google (down $0.56 to $179.40, Research) are openly fretting about the rise of click fraud.
The main perpetrators appear to be competitors of advertisers and also scam sites set up for the sole purpose of hosting ad links provided by Google, through its AdSense unit, or Yahoo!, through its Overture service. Humans or specially designed software then click on those ad links in order to "steal" revenue from advertisers.
Estimates of how prevalent click fraud has become since it appeared four years ago are all over the map. Jessie Stricchiola, the president of Alchemist Media, estimated that as much as 20 percent of all clicks on paid search ads are shams.
In recent months, Google has become increasingly vocal about the problem. In regulatory filings leading up to its initial public offering this summer, the company has reported that it has regularly paid refunds related to fraudulent clicks.
"If we are unable to stop this fraudulent activity, these refunds may increase," Google said in one of the filings.
Is Google doing enough?
Google has reason to be nervous.
Paid-search advertising generates about 98 percent of its revenues. Red-hot demand for cost-per-click advertising doubled Google revenues in the first three quarters of this year and paved the way for the company's blockbuster IPO in August.
Google's stock price, which closed Thursday at $179.40, is up 80 percent since its debut.
Reyes' comments Wednesday appeared to the starkest yet by any Google executive that click fraud is becoming a serious problem.
In fact, he called click fraud the "biggest threat" to the Internet economy. "There's a lot of bad guys out there that are trying to take advantage of this and it costs, I'm sure not just us, but eBay and Yahoo! and Amazon and the whole crowd, you know, tons of money."
He did not elaborate on what needs to be done to combat the scourge.
Government watchdogs, primarily focused on pursuing Internet scams that harm consumers, have only recently taken action.
In March, federal authorities arrested a California man for allegedly trying to blackmail Google into paying him money not to distribute software that he claimed would allow spammers to generate millions of dollars worth of fraudulent clicks.
For the most part, search engines have been self-policing. They all claim to have in-house fraud detection teams and top-of-the-line technology that can detect miscreants.
Google last month filed its first civil lawsuit against a Texas-based Internet company, Auctions Expert International, that it said defrauded Google and advertisers by systematically clicking on ads.
But Stricchiola, who helps companies with paid-search campaigns, said not all search engines have been as aggressive as they could be about combating click fraud.
And she singled out Google as an example.
"Google has been the most stubborn and the least willing to cooperate with advertisers" that complain about click fraud. She said the company is only now changing its tune because advertisers and recent media coverage have put pressure on the company to do more.
"This is Google playing politics," said Stricchiola, referring to Google's recent lawsuit and Reyes' comments.
Google did not immediately respond to a written request for comment.
At least one analyst sat up and took notice after Reyes spoke.
In a research note to investors Thursday, Mark Mahaney, an analyst with American Technology Research, said he had previously thought that click fraud was a bigger threat to second-tier search engines than to Google or Overture.
"It sounds like this may be a bigger problem than we had anticipated," he wrote.
December 2, 2004: 6:30 PM EST
By Krysten Crawford, CNN/Money staff write
http://money.cnn.com/2004/12/02/technology/google_fraud/index.htm
Posted by Hans A. Koch at 06:30 AM | Comments (0)
