Google's Click Fraud Woes

Google has been under a lot of pressure these days to become more open about their efforts towards combating click fraud. Google's main source of revenue is online advertising via their AdWords program. AdWords allows advertisers to have their ad shown when a particular keyword is searched for in Google or if the same keyword appears in the content of a website that subscribes to Google's AdSense program. Each advertiser submits the maximum amount of money that they are willing to pay Google if someone clicks on their ad and is directed to their website. Advertisers compete for ad placement using an auction mechanism. Google shares their advertising revenues with webmasters that subscribe to AdSense making it one of the most popular methods for monetizing a website.

Click fraud is committed when an Internet user clicks on a pay per click (PPC) ad for the sake of generating revenue for a particular website or in order to deplete a competitor's advertising budget. Such behavior is against Google's Terms Of Service (TOS) and any webmaster found violating the TOS is promptly and permanently banned by Google. However, this is where things get a bit tricky for publishers and advertisers.

First of all, Google does not release to the public any information about their mechanisms for detecting and preventing click fraud. Google claims that releasing such information would make it possible for hackers to abuse their system. Many webmasters however maintain that they have been dropped from the system even though they have done nothing to violate Google's TOS. Some people claim that something as simple as a single user who clicks on too many AdSense ads is enough to get you banned. Of course this is very worrisome for webmasters since anyone who dislikes them can easily have their site disqualified and banned by Google.

In addition, advertisers are using 3rd party companies to try and measure how much click fraud is taking place on their ads. Some are finding that click fraud rates are more than 40% which is very high. As a result advertisers are asking Google to become more open about their click fraud prevention methods and also to do more to prevent it. Google had to recently settle a click fraud suit for 90 million dollars the money going to advertisers while recently another class action suit begun brewing in Pennsylvania. In its efforts to appease advertisers, Google has recently added an option in Adwords that shows the number of detected fraudulent clicks for which the advertiser is not charged. In addition, Google has recently joined forces with Yahoo! (who also have similar advertising programs with their Yahoo! Publisher Network) in order to better define and combat click fraud.

Click fraud is a very real threat for both publishers and advertisers. Publishers must take steps to prevent attacks on the sites. There exists free software such as Adlogger that can help immensely. AdWords advertisers unfortunately have to wait until Google becomes more open and cooperative. For the time being, the most they can hope for is to increase awareness of the click fraud problem via class action law suits. At the end of the day, chances are that market economics will eliminate the problem as large amounts of click fraud will result in a drop of PPC prices which in turn will make it less desirable for fraudsters to try and abuse the system.