Letter from Google Adwords Team

I've written in the past about how I've spoken at length with people from Google and how all the hype from all the media playerhaters and shortselling idiots around this click fraud stuff with google is, well, just a bunch of BS. Here's more on that, straight from the horse's mouth.

--- from Google AdWords team, 3/8/06 ---

For some time, we've provided
information for advertisers about
invalid clicks on the AdWords site here.
We thought the notice of today?s invalid
click settlement might prompt some
additional questions about this issue,
so we had Shuman Ghosemajumder, Business
Product Manager for Trust & Safety,
address them.

What is click fraud? I often hear
the term "invalid clicks," too. What's
the difference -- or are they the same?

The term "fraud" implies deliberate
deception. Our aim in fighting invalid
clicks is broader and includes clicks
that we suspect may have been deceptive
or malicious, as well as clicks that we
deem invalid for other reasons, such as
accidental double clicking on an ad. The
usage of the word "fraud" in this
context has caused a great deal of
confusion, as it's practically
impossible to "prove" that an impression
or click was caused by deliberate
deception. Our servers can accurately
count clicks on ads, but we cannot know
what the intent of a clicking user was
when they made that click. When we
identify a click as invalid, it simply
means a click we won't charge for, in
order to deliver the best ROI to
advertisers.


Why not say more about the specific
methods used to identify invalid clicks?

There are many things we do to
detect invalid clicks, including looking
at duplicate IP addresses, user session
information, network information,
geo-targeting and browser information.
These are all important signals for
detecting invalid clicks.

The technology we use to detect
invalid clicks is highly sophisticated
and was developed by some of the world's
leading experts -- PhDs in artificial
intelligence, machine learning, and
statistics. We?re reluctant to share
more about our technology and methods,
however, because doing so would make it
easier for fraudsters to try to defeat
our systems.


How big a problem is invalid click
activity?

We take it very seriously and have
devoted significant resources and some
of our best talent to this. By far, most
of the invalid clicks we see are
detected and discarded by our automatic
filters even before they reach
advertisers accounts. If an advertiser
is monitoring click activity, these
automatically filtered clicks may show
up in an advertiser's logs, but not in
their bills. When invalid clicks are
detected after an advertiser is charged,
we reimburse for them. Because of our
detection efforts, losses to advertisers
from invalid clicks are very small.


But don't advertisers report invalid
clicks to Google which weren't detected
in advance?

We do receive reports from
advertisers and we look at them very
closely. When we believe those clicks
are invalid, we reimburse advertisers
for them. Some invalid clicks do make it
through our filters, but we believe the
amount is very small.

Also, we often find that the clicks
are legitimate, but from unexpected
sources such as broader targets the
advertiser has set up for their
campaign. And, as I mentioned earlier,
some of the invalid clicks advertisers
see in logs are clicks we've already
caught, discarded and not charged. Most
investigations we conduct concerning
invalid clicks are cleared up with the
advertiser after explaining the source
of the traffic increase or showing them
that the clicks were never charged.


Does Google have an incentive to
allow some amount of fraud because it
means more revenue?

Actually, it is the opposite of
that. We have much more of an incentive
to do a better job of handling invalid
clicks than our competitors -- and we
believe we do. Fighting invalid clicks
aggressively is in Google's best
interest and essential for us to
maintain a viable business. In addition,
we offer free tools to advertisers so
they can monitor their return on
investment -- which is a helpful way to
determine whether too many clicks coming
through are not resulting in sales.
Those free tools help advertisers manage
to a bottom line value of their ads.


Some people suggest that click fraud
may account for as much as 30 percent of
traffic -- what do you say to that?

We believe the methodology behind
that particular estimate is flawed --
and that many who have cited the figure
have done so irresponsibly by using it
differently than it is characterized in
the report.

Here's a link to a .pdf version of
the study where that figure originated.
We encourage you to read the report and
evaluate it yourself. Some things we
think you will see that undercut those
who use this estimate carelessly:

Even the report does not say that
click fraud is 30% of all clicks. What
it does say is that of three ad
campaigns (only three ad campaigns were
examined in this study), evaluated over
a ten day period, one had questionable
clicks of 8%, another 10% and a third 30%.

So, the 30% figure comes from
analysis of a *single* ad campaign, not
a study of many. This means that the
figure of 30% that is used to
characterize click fraud for the whole
search and advertising industry comes
from the analysis of *one* ad campaign
looked at for ten days. Even in that
campaign, it is not clear what
methodology they used to determine which
clicks are "bad" and it is possible that
they marked legitimate clicks as
"duplicate."

Moreover, the study does not
indicate whether the advertiser was
actually charged for any of the clicks,
only that the traffic analysis suggested
that the clicks may have been invalid.
As I mentioned above, it?s very possible
that clicks recorded in an advertiser's
logs have already been caught by
Google?s detection systems and not
charged. (I should also note that when
invalid clicks are detected and
discarded before they are charged to an
advertiser they are also not recorded as
revenue.)

When considering the validity of
this exaggerated 30% figure, you should
also consider who is most aggressively
using it: it is those who have the most
to gain from hyping the problem. Those
who are throwing around this figure are
doing so as part of their marketing
efforts to sell products they claim
detect click fraud. The more they can
convince others that click fraud is a
problem, the more they hope to see
increased sales. In other words, these
companies have a huge financial
incentive to make people believe invalid
clicks are a larger problem than they
really are.


What else on this topic should we
should be aware of?

Whether it?s online or offline,
advertising should be about ROI and
results. It is in our interest to serve
the interests of our advertisers, which
means delivering superior ROI. Our
efforts to combat invalid clicks are an
essential part of that.

What we have seen so far is that
advertisers continually increase the
amount of money they spend, which
suggests that they are pleased with the
return delivered by their ads. We
encourage advertisers to track ROI and
contact us when they see something that
doesn't appear to add up. If you see
suspicious activity on your AdWords
account, please contact our click
quality team.


Posted by Arielle, Inside AdWords crew