Advertisers Decide Google Pocket Change Not Enough In Click Fraud Settlement

from the a-big-mess dept

Wed, May 10th 2006 11:04pm — Mike Masnick

A year ago, when a bunch of advertisers sued the various paid search providers for click fraud, it was hard to take the side of the advertisers. The search companies clearly know that they need to minimize clickfraud, or risk losing business. However, a certain amount of clickfraud needs to be expected. There's simply no way to expect the paid search providers to ever be able to completely eradicate clickfraud -- without also doing away with pay-per-click advertising. In fact, if anything, the advertisers should be upset with the individuals and companies actually doing the clickfraud. Of course, they're tough to track down, so it's much easier to sue the big money-making search engines instead. That said, it still seemed odd a couple months ago to hear that Google had somehow settled the clickfraud class action suits for a mere $90 million, given how much advertising is done on Google. That seems like pocket change -- and sounded like the type of deal that some class action lawyers jumped at, so they could get their easy cut (in this case, $30 million). So, it's not that surprising to find out some advertisers are quite upset with the deal, and are now suing to block the settlement, claiming that the money going to advertisers is not nearly enough. In some ways, it seems like the advertisers may be getting a bit greedy. While it's true that they're not getting very much from Google, it's quite possible they'd get nothing at all in a full trial where Google could lay out all the steps they take to prevent clickfraud, while also noting that the real liability should be on those doing the actual clickfraud. On top of that, if these advertisers believe so much of their paid search traffic is fraudulent, they could move to Yahoo and Microsoft -- as both are building up their own paid search offerings, and would love to have them (though, chances are the clickfraud is just as bad at either one -- mainly because it's a problem created by third parties, not the search engines themselves).

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13 Comments

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poonta, 10 May 2006 @ 11:30pm

its all bullshit money anyway, squabble away !!
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throbi, 11 May 2006 @ 12:04am

they have found your long lost half, Wanamaker!
Wanamaker's quote: "Half the money I spend on advertising is wasted; the trouble is I don't know which half."
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toby, 11 May 2006 @ 12:48am

greed
All this is going to do is make it harder for google to fight click fraud because they will have to lay out in detail the steps they currently take to fight it. These greedy advertisers will find out that google does a better job of fighting fraud then they ever imagined but at the cost of getting no $ and laying google's techniques bare to the fraudsters. google will then need to put effort into revising their methods. It was probably worth 90m to them just for the goodwill and not having to reveal these methods such that fraudsters and competitors learn them. I would bet that between google, ms, and yahoo that google does the best job of eliminating fraudulent clicks. yahoo and ms will no doubt have agents in court taking detailed notes.
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August West, 11 May 2006 @ 3:25am

I guess I'm guilty of click fraud
Sometimes at work I will Google for info for a computer error. So if I google for say, " Event ID 1006" and 3 ads pop up that say something ridiculuos like "Get your best deal on Event ID 1006", it pisses me off and I click them all three times. Granred, they havwe to make thei money, byut sometimes this just grates me a bit
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Me, 11 May 2006 @ 5:30am

Re: greed
Toby, I agree with you 100%. The only thing that this is going to do, by dragging out the lawsuit, is eventually make Google show everyone how they go about to stop these frauds. Thus, those commiting the fraud will now know what steps to take to get around it.
The world is full of stupid people and I am just along for the ride.
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Brandon Zylstra, 11 May 2006 @ 7:41am

This is absolutely retarded... there's nothing fra
The idea of "clickfraud" is about is sound as the idea that we owe cable companies and advertisers the right to show us ads and we cheat them when we use Tivos etc.

They start with the false premise, and then when we don't act in accordance with their false premise, they get bent out of shape and want to sue or otherwise attack someone.

In the case of ad-skipping the false premise is that we've implicitly agreed with them to watch the ads if we watch the show the ads are interrupting. In the case of 'clickfraud' the false premise is that we are only allowed to click on ads that we really are interested in and might respond to by spending money. This is completely bogus. If I want to click a million times on their ads, I'm not violating any law or any agreement I've made. I don't happen to want to do that, but there's no legitimate reason I can be compelled not to.

Fraud involves making false statements. There's no fraud here, just raining on someone's parade of stupidity.
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Rick S, 11 May 2006 @ 9:45am

I always click the ads, theu must want me to look if they are coming up on the searches I am doing. I should care how much it costs them???
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send your money to google, 11 May 2006 @ 11:04am

send your money to google
You are forgetting that the biggest beneficiary of click fraud is google. The payout for clicks is much less than 50% to the site, which means google makes the biggest portion of every click. So of course they are not very motivated to solve this "problem".

They are motivated to make it look like an unsolvable problem that advertisers will just have to live with and pay for. Why should advertisers pay for this when it is clearly a google expense?
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Jeremy, 11 May 2006 @ 11:13am

Re: send your money to google
That might be true if MS and Yahoo weren't waiting in the wings to take all their market share. However those two are waiting in the wings so Google who's whole business model is built on being the "less evil" of all the other players can't afford not to work on stopping clickfraud. Google will lose business if they aren't seen working on improving that aspect of their ad business. They built the whole business on useable ads that don't destroy the website they are on. What on earth makes you think they would allow that perception to be jeopardized?
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Me, 11 May 2006 @ 2:23pm

again... the lawyers make the money
I think an important point is that the tort lawyers are the ones that made a lot of money out of this. And I would be upset too, if they'd "represent" me in a class action suit without me even agreeing to it.

If we could get rid of those pesky lawyers, the world would be a better place... as usual... ;o)
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Stu, 11 May 2006 @ 5:00pm

Pocket Change Not Enough In Click Fraud
To eliminate click fraud, replace pay per click with commission per sale. When the seller gets paid, the search site gets paid. Add a charge-back system for product returns and fraudulent payments and fraud goes away. This has worked well for years in the online adult industry. Sure, auditing is necessary - it always is.

Advertisers should love it. They won't pay for clicks that don't result in sales - they only pay when they actually sell something and have the money. The search engines should buy in because they will be able to show actual results. They won't like it though - it reveals the baloney of their sales pitch.

John Wanamaker would like it because he'd know which half of his advertising budget was wasted. Pay per click is a bad deal - for advertisers, IMHO.
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more dough to the big G, 11 May 2006 @ 7:42pm

Re: Re: send your money to google
"What on earth makes you think they would allow that perception to be jeopardized?"

Click fraud makes a very big lot of money for google. They will never stop it and they dont need to. They just need to convince people they are trying.

Likewise, all those empty google ad sites could be taken off line instantly if google cared (they know there is no content other than ads), but they make money off those spammy sites too (the lions share). So they just have to wring their hands and say they are trying so the money keeps flowing.

Who says that allowing click fraud to continue will jeopardize their perception as being less evil? They can do whatever they want and no one's perception will change.

If you are in the google camp, google can do no wrong and will always be viewed as the most magnificent company ever to shine this earth, regardless of how much data they collect on your private life or who they share it with or whether they patent obvious alogrithms or not, or whether they try to steal a trademark from an existing legitimate holder or not.

And if you are not in that camp, their being a bit more sneaky wont put you in their camp. So who's perception are you worried about being changed?
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Stu, 12 May 2006 @ 5:19pm

Re: Re: send your money to google
Hey "more dough to the big G".

I did say that the search engines woudn't like it.
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