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Thursday, December 14, 2006

Click Fraud for the Hundredth Time: When Balance Tips Over to Fatuous

Hey Andy,

You've taken a few knocks from the naysayers in recent days. So you published a counter view humorously titled "The 12 Ways of Click Fraud" giving equal time to a typical Google critic. Hey, I'm as fond of critique as the next guy, and I love a good (or bad) joke. But these throw-all-against-the-wall type of quasi-exposes don't pass my BS filter easily. I cannot stand to have innuendo masquerading as fact on this issue, and we're just supposed to believe it because the target is fat and happy. Pssst - fat and happy are supposed to be proof you're doing something right...

If you don't mind, I'm going to respond in detail to the "12 Ways" assertions here. How scrapey of me, I know. Hey everyone, sign up for Andy's RSS feed so you get more of this kind of good stuff.

Mike's assertions in ital, my rejoinders in bold or bold ital...

1. Google earned $ 1.52 per month last quarter for every internet user over the age of 4 that use the internet 1 day a month (109 million) Less than 50% of internet users use the Google search engine. When you consider that many users do not click on PPC ads at all, the ones who do must click on a larger number.

Don't cite reach numbers to reach conclusions. How many impressions (searches, roughly) are served, and what's Google's effective CPM rate on that? That's generated by x% of users clicking on paid listings on a SERP. They do click on them. As for search market shares, Google generates probably 65% of total searches. Whatever numbers you're using about Internet user behavior above are (a) probably outdated; (b) don't lead to any clear conclusions about click fraud or even clicks.

2. There are many other things occupying the time of internet users besides search. Video has become very popular and in the first year of’s life, over 9,000 years of video had been watched. Email, Instant Messaging and sites like MySpace would also take time away from clicking on a PPC link.

I absolutely love frisbee, and leaf raking. My cat enjoys sleep. Don't quit your day job.

3. I question the steady increase in PPC revenue quarter over quarter. Other forms of internet advertising have always experienced a drop in interest over time. One of the main reasons I don’t click on PPC ads is because I find them to be ineffective. Any that I have clicked on turned out to be disappointing.

It's possible the engines have engaged in some earnings management to keep the growth looking smooth. Google actually implements initiatives to toughen editorial standards on advertisers, leading to short-term softening in revenues, but that's only so they pre-empt a potentially larger growth quarter in the following quarter (thus smoother looking growth). As for your personal experiences, they aren't borne out by the data, which is unsurprising. My clients track ROI and show real users clicking on real ads, buying real products. Your personal experience, therefore, is not real enough for me to care about.

Eventually, paid search revenues will level off. Of course. It just hasn't happened yet.

4. What’s with Google’s recent increase in click fraud PR surrounding PPC? Between Matt Cutt on a debunking quest and Shuman Ghosemajumder’s recent meeting with Andy Beal, the Google PR machine seems to be working overtime. Shuman tossed in a red herring by introducing the term “invalid click” into the click fraud discussion. Invalid clicks should be an internal metric used only by Google. Invalid clicks have no place in the click fraud discussion.

I'm guessing they're tired of self-interested parties lying about the issue, to Google's detriment and embarrassment. Over the holidays, Googlers' families can now say "you sure told them!" instead of "gosh, you're really in that search game? I read that article in TradPub and man did they make you guys look like criminals!"

Google's called them invalid clicks for some time, likely as a euphemism but also because fraud must be proven. Google doesn't charge for a variety of clicks that are no good to advertisers but it would be presumptuous to call this fraud in all or even many cases. Law professor Eric Goldman, an expert in this area, has argued against the use of the term "fraud" to describe non-converting clicks, as it confuses real legal issues (as in, you must prove fraud and convict someone - or it is at best, alleged fraud). I'm sure Goldman has a smarter way of describing it, but I'll leave it there.

5. Bid rates for competitive keywords has been on the decline. The only reason for this would be a lower ROI on those keywords. This sends savvy AdWords customers further down the “long tail” in search of quality leads and better value.

I won't even accept the premise.

6. When AdWords customers travel further down the tail, it bolsters the click fraud network. The long tail hides a well written network. Quality bot networks would access the fraud site through Google’s own search engine results. By achieving this connection, the PPC transaction is given more weight and undergoes less scrutiny than other sites. To score high enough in the listings, the fraud site has to use terms in the long tail.

Nothing hides anything. The long tail is a valuable part of search inventory, and advertisers often use it to their benefit. They are not getting click-botted into submission (we measure ROI, remember?).

7. This long tail also enables search arbitrage. This practice involves buying AdWords at a low bid price and directing the clickthrough to an AdSense website with higher paying PPC links. Mix some of this practice into your click fraud network to water down the clicks coming from the bots.

Google is explicitly targeting many forms of search arbitrage through the quality score initiative that includes stringent checks on landing page quality. This process disables a wide variety of keywords and ads in accounts intended to achieve arbitrage-type benefits. Users dislike arbitrage; advertisers don't like to compete with arbitrage advertisers. So Google's taken systematic action against this. That is manifested in prohibitively high minimum bids in accounts that point users to low-quality landing pages, such as certain kinds of ad network dominated "arbitrage type" pages.

8. Search arbitrage encourages multiple PPC service abuse. The fraudster uses an AdWord account to send leads to a Yahoo, MSN or Ask optimized page. In this case the money is paid to Google and removed from the other company. This can also work in reverse to further cloud the issue.

I'd agree that click fraud on Yahoo publisher partner links has been a more significant problem than many realize. Yahoo will have to give advertisers more transparency into the workings of the network, and will need to police bad publishers. Google's actually gotten out in front of the issue with the above-mentioned landing page quality initiative, making it more difficult for those publishers to even receive traffic from cheap AdWords clicks. In short, Google's ad quality initiative is actually saving Yahoo Search Marketing advertisers money, without their necessarily being aware of this.

9 . Advanced bot networks have been found producing SPAM email from infected computers. Some have even installed anti-virus filters themselves. This is in an effort to keep the bandwidth and processing power for the bot. Some operate in a peer to peer method. This allows the network to be run by one machine and be restarted by a totally separate machine. We catch email bots because they leave millions of spam email as evidence. Click fraud bots leave no evidence.

No question, we are dealing with some nefarious bots. The question is, how much fraud is flowing through to the end advertiser's bill, in the end. You haven't done anything here again but simply raise innuendo levels and spread FUD.

10. There is a strange, cult-like feel surrounding Google’s privacy policy in both the AdWords and AdSense networks. Repeated public searches yield very little information about AdSense compensation or average keyword pricing. With little comparison data, it is hard to conclude whether your account activity is normal or inflated. Rumors of immediate dismissal for TOS violations are commonplace if you do uncover data. The only testimonies available are from account holders with very low AdSense compensation. By banning these sites, Google gets two positive outcomes. First, other publishers hear these stories and are scared straight. Second, they remove what amounts to an administration drain on the system. If accounts don’t pay every couple of months, it is not worth the effort supporting them.

I'm getting hungry so I'll let you have that one.

11. Click fraud is really only a concern for those AdWord accounts in which Google is paying a publisher. It makes very little sense for click fraud to be present on any site that Google owns. Unless someone is trying to max out a competitors account, there is no financial gain. From my best research, Google allows you to opt out of Google but does not offer a “Google only” option for AdWord customers. By mixing in the publishers (AdSense accounts) to the pure Google network, they hide the true rate of click fraud. The baseline metric missing is the pure click through rate on the Google properties alone. That would give a good indication of inflated conversion percentages in other areas.

Are you telling me you've never actually logged into AdWords? It's absolutely incorrect that you cannot opt out of network traffic. You can! You can also bid lower on it if you wish, or exclude unwanted publisher sites either through the interface or by contacting a Google rep. All of the above info and disclosure is available; and all of the opt-outs you seek are already in place. They weren't three years ago, but this isn't three years ago.

12. The way that Google handles new accounts make me question their ethics. Many pitfalls for new accounts are outlined in this article including $ 5.00 minimum cost per click and initial set up including the content network. The content network is where the highest rates of fraud are reported. Since Google creates very little content, nearly the whole sub-area is AdSense accounts. It is those accounts in which the fraud lives and hides. AdWords does allow customizing of which sites your ads will be shown but only as an advanced feature.

I'd agree that a rookie opening a new account without knowledge is probably going to be in a world of pain. But where you get this $5.00 business is beyond me. Yep, the network's been a problem over the years, but we've been through a lot of waves of policy and implementation on this front. Real advertisers have observed all developments closely. As someone who has never logged into an AdWords account, I guess I can't count you in their number.

…. and a partridge in a pear tree.

I'm getting thirsty now. So I'll give you that one, too. Merry Christmas.

Posted by Andrew Goodman

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