I guess Google would be the one's you'd expect to say there is no click fraud, or that there's so little fraud (try 0.02%) that it's not worth suing us ….or don't get your hopes up when you sue Google for Click Fraud - this comes from SearchEngineLand.  Here's 5 definitions:

"…

• Invalid Clicks: This is a Google term. It means that of ALL the clicks Google ads generate, a percentage of these are deemed "invalid." These are clicks that Google makes no money from. It either never bills for invalid clicks or eventually issues a refund. Not all invalid clicks are necessarily fraudulent (such as in cases of quick double-clicks that aren't billed).
   
• Fraudulent Clicks: These are the percentage of clicks that an advertiser is charged for when the person (or bot) clicking is doing so to purposely cost the advertiser money or make money for themselves through an ad program.
   
• Overall Click Fraud Rate: This is the number of fraudulent clicks as a percentage of ALL clicks that happen, regardless of whether Google issues a refund or doesn't bill.
   
• Detected Click Fraud Rate: This is the number of fraudulent clicks as a percentage of ALL clicks that happen where Google generates a refund after performing a requested or "reactive" investigation asked for by an advertiser. Google would call this the "re actively identified invalid click" rate.
   
• Undetected Click Fraud Rate: This is the number of fraudulent clicks as a percentage of ALL clicks that happen where no refund has happened because neither Google or the advertiser spotted the fraud.

But it's all in how Click Fraud is defined.  If 30% of the clicks are fraudulent but Google detects it and prevent the fraud from applying to your account - then they say there are little or now Click Fraud.

Honestly, I don't know ….. but 0.02% seems awfully low.

Craig Danuloff of Revenews brings up a good point about Click Fraud; it’s coming from the fake affiliate spam sites mostly - not from people deliberately clicking on ads two or three times.

"Google and Yahoo need to stop pretending the problem is in click-stream analysis, and move to distribution-partner analysis. Further, advertisers need to make it 100% clear that paying to run ads on un-named websites over which they have no say or control is unacceptable."

I tried looking for Click Fraud several times using KeywordMax’s Click Auditor program on sites of my clients who suspected such behavior and had KeywordMax running.  I found very little of what could be termed Click Fraud.  I looked for duplicate IP addresses clicking on similar of the same ads within a minute or two apart.  I found, most often, when the same ip address clicked on another ad from the same site, it was really for some other part of the inventory (ie: office furniture - desks, vs. office furniture - school desk furniture); you can’t really call that Click Fraud.

"Click fraud doesn’t come (in any significant quantity) from serious sites. It comes from junk sites on which no advertiser would ever intentionally decide to place their ads. Surely there are some PHDs running around the GooglePlex that can look at a wasteland landing page full of nothing but sludge and PPC ads and decide that ‘the best user experience’ is not served by syndicating ads onto that site. "

I think what’s happening is the Search Engines, eager to have ads appear in as many places as they can (so there will be more clicks and therefore, more money made) have lowered the bar to allow many spam sites to become part of the content distribution network.   I think Search Engines, Google and Yahoo mainly, in this respect, don’t want to lost part of their distribution network, even if that network is spam.  Who knows, if they investigated too deeply , they might end up having to cut out half of their distribution partners - they don’t want to do that…can you blame them?

The Click Fraud problem is very complicated - it’s not that easy to solve without search engines also losing money because they are cutting down the number of places ads will appear- and no one wants that to happen - God Forbid!!!!   The problem is..by allowing advertising to appear in "junk sites" the search engines are legitimizing those sites - it sends a message that it’s OK for Google and Yahoo to feed ads to Spam Sites; I think that’s a bad message but I’m not sure what the solution is.

Google released a paper that attacks the way third party click fraud auditing programs, run by independent vendors, interprets click fraud; John Battelle got an advance copy of the PDF which you can download here.

"Here’s the situation: on the one hand you have your customers, insisting that there is a problem and that you do something about it. On the other hand, you have your engineers, insisting there is not a problem. Further complicating the issue is that your customers, unsatisfied with your insistence that their concerns are, in fact, not a concern, have gone and hired third party firms who then validate their concerns (and turn click fraud detection into yet another industry - see the ads on here). Then, of course, the press whips those concerns into a major frenzy, threatening your $100+billion market cap.

Here’s the major points that Google paper "How Fictitious Clicks Occur in Third-Party Click Fraud Audit Reports", published August 8th, makes about Click Fraud auditing.

"The most fundamental flaw that we have seen in these reports is the existence of fictitious clicks: events which are reported as fraudulent but do not appear within Google’s logs as AdWords clicks. This report identifies the root causes behind these fictitious clicks and illustrates the extent to which this flaw impacts click fraud estimates from these firms."

"…….As an example, a single AdWords click may appear as five events in some reports, leading to (a) the identification of these events as “click fraud”, and (b) the reporting of five fraudulent clicks."

"…We have continued to see third-party click fraud auditing firms stating that their measurements show much higher levels of click fraud than we believe could possibly be realistic (e.g. 14%), which is troubling. These estimates have also had a high variance, ranging up to 35%. Although only a very small number of AdWords advertisers use third-party click fraud auditing firms, the click fraud estimates produced by these firms have been highly publicized and caused concern for many advertisers."

"…Events identified as fraudulent in these reports, which actually match real clicks in our logs, often converted at nearly the same rate (and in some cases better) compared to other clicks. For example, in one case where 800 paid clicks were marked as “fraudulent”, the rate of conversion for these clicks was 5.1%, which compared favorably with the 5.8% overall conversion rate the advertiser achieved on approximately 24000 paid clicks."

While Google does think there’s a place for 3rd party auditing of it’s AdSense reports - it’s not happy with what has cropped up so far:

"Invest in R&D and engineering, and take quality issues seriously o We do believe that there is a place for third-party click auditing firms in the industry’s value chain, but only for those who can deliver real value to all stakeholders."

I have personally found that Click Fraud is no where near the 15% that some estimate - but admit it can be the case for some websites - mostly those who are being attacked by competitors.   When I have looked at sites with KeywordMax’s Click Auditor, in commercial segments where you’d expect a lot of click fraud, I did not find much that one could actually call click fraud.

I did see cases were people would be searching for something, like office furniture, and click on ads for items contained by the same website, over and over, within a short period of time - but when I looked closely, it was not click fraud, but poor quality on the website where the ad was pointing to - and a visitor is just looking for what they want and will quickly go to the next link if they don’t see what they are after.   But that’s not click fraud.

So I don’t think, at the end of the day, Click Fraud is as much of a problem as it’s been made out to be.  I don’t know if Google is right or not in it’s position - but I do think that third party vendors (and I won’t name there here) are taking advantage of the perception of click fraud.  Google’s position is the current crop of Click Fraud products does not add anything positive and actually are misleading.  I think they’re right - but as John Battelle points out, the motivation for the paper might be more about deflating a perception people have about AdSense Click Fraud.

Microsoft has released a study that details how tracking an entire user session helps to explain the intent of searchers by looking at what they do before and after they search - and this will also reveal when a search engine click through is fraudulent. 

I reviewed the PDF study created by Microsoft Research and found this chart (below) very meaningful.

Much of the ability to know if behavior is click fraud is achieved by comparing the behavior through a session with average behavior. 

Here’s the PDF link, in case anyone is interested in reading the entire Microsoft Research Paper on Click Fraud.  I found this information via MarketingShift.

The three major search engines are cooperating to come up with a common defination of Click Fraud, according to John Battelle.  Slashdot also has a writeup (see below)

"The fact that these three bitter rivals can team up shows just how serious the industry has become about preserving the current online advertising boom that is currently underway. From the article: "Click fraud has attracted an increasing amount of attention amid class-action lawsuits and industry studies asserting advertisers have been collectively overcharged by more than $1 billion for bogus sales leads during the past four years. Google and Yahoo contend that those estimates are gross exaggerations generated by opportunistic lawyers and online advertising consultants hoping to cash in on the anxieties triggered by their calculations"

"Part of the difficulty in fighting click fraud so far has stemmed from the inability to come up with a precise definition of the practice, a problem the alliance hopes to solve.".

I just filed a petition for one of my clients last night in the 90 million dollars set aside for Click Fraud settlement; interesting that there’s actually no standard defination of Click Fraud.

I just found out that anyone that wishes to file with Google for  Click Fraud charges needs to do this by August 4th (Friday).  Here’s the details:

August 4th is the deadline for submitting your claim in the recently settled class-action lawsuit, Lane’s Gifts and Collectibles et al. v. Google, Inc. et al., Case No. CV-2005-52-1, in the Circuit Court of Miller County, Arkansas.

The class includes all entities who bought Google advertising on or after January 1, 2002.

If you’re not one of the 556 members of the class who post marked their written objection to the case by June 19th then you have effectively decided to submit your information for your portion of the $60 million Google’s charged to pay to all members of the class. Or you’ve decided to do nothing.

Either way, because you did not submit a written objection you have submitted to the Arkansas circuit court’s ruling that you are "’forever barred and permanently enjoined’ from suing Google over click fraud."

You can claim your portion of the settlement at the ClickSettlement site and get "…funds in the form of advertising credits. These advertising credits may be applied to up to 50% of the cost of future online advertising purchased from Google."

Google at this point has admitted to no wrong doing and the court did not rule on the contentions of either party.

If you are just now hearing about this and would prefer to object rather than seek some advertising credits from Google my best suggestion at this point (I will dig in more shortly) is to have a conversation with Joseph Kinney who’s suing both Google and Lane’s Gifts in the same Arkansas court.

His website is here: SafeSpaces.com, and he appears to provide litigation consulting for people "concerned with safety and security."

Find Kinney’s thoughts about the settlement in Google Sued Over Click Fraud, Again. He is likely to be the next major player in this particular settlement.

Resources:
The best informational page I found regarding the settlement was the FAQs on the court’s official ClickSettlement.com site.

This article provided the fullest coverage of the settlement situation: Update: Judge OKs Google click-fraud settlement.

This post provided my jumping off point: Google Click Fraud Settlement Approved.

I did not listen to Danny Sullivan’s Google Click Fraud Settlement pod cast, but I suspect it’s excellent.

This article, sent to me by MarketSmart Interactive’s Diane Pease, gives insight into the market’s perceptions of paid search, and should serve as a reminder to advertisers that both paid search and online marketing are still in their infancy and we’re likely to see great changes in the coming years: An advertising model that does not click.

 

My fellow blog writer at Know More Media, Brandon Hopkins  posted on How to run an AdWords Invalid Clicks report - something that just got added to Google AdWords yesterday.  You can read on the exact way you have to generate a report in order to get this data by reading his post.

However, I just tried it with two AdWords accounts I have access to and the options to generate this report don’t appear to be available yet.

We’ll have to check back later - or better yet, check in with Brandon Hopkins  to find out when Invalid Clicks reports will be available to everyone.

There’s also a discussion on Traffick on the larger implications of allow advertisers to see the number of "Invalid" Clicks in their reports.

Yesterday a 47-page report on Google’s Click Fraud problem was released by an independent expert,  Dr. Alexander Tuzhilin, a professor at NYU.  Google also produced it’s own findings and both documents were summerized by Matt Cutts who works for  Google.

While Matt Cutts may have spent much of Saturday reading both documents - I took a shortcut, I admit - by using Pertinence Summarizer - which I have found particularly effective for Search Engine Work; it also helps summarize with long documents, probably better than any other summarizer I have come across. - I can often get to the heart of a document in a couple of minutes rather than a couple of hours.

Of Dr. Alexander Tuzhilin’s findings on Click Fraud: 

"…[Click Fraud detection can not] be operationalized in the sense that invalid click detection methods can be developed that would algorithmically identify invalid and only invalid clicks satisfying these definitions

"First of all, to determine if a certain click is invalid, it is necessary to understand the intent of generating the click: was the click generated “artificially” (improperly) or not and what does exactly “artificial” mean in this case."  However, Google does not have full knowledge of which clicks are actually valid and invalid, and it is impossible to identify performance rates of the filters without this knowledge. Significant progress has been made in combating invalid clicking activities and developing mature systems and processes to accomplish this task.

- using certain types of software bots (to produce)clicks on Google’s ads on the publisher’s own web site constitute examples of such “prohibited means” and can be detected using technological means and marked as “invalid”. An Auto-Termination System is employed - an automated offline system for detecting the AdSense publishers who are engaged in inappropriate behavior violating the Terms and Conditions of the AdSense program.

 I suspect that Google looks for a bot coming from a related IP Address or subnet where the pulishers site is on and will disqualify those clicks - if it determines they are produced by an automated program.

However, there are times when people will click on an ad twice for totally valid reasons and in this case, Google does not consider this Click Fraud.

-a person might have clicked on an ad, looked at it, went somewhere else but then decided to have another look at the ad shortly thereafter to make sure that he/she got all the necessary information from the ad (i have done the same thing myself).

-…filters simply don’t know if the conversion will take place or not by the time they need to make the decision.  Since these clicks cannot be safely removed by filters, the filters pass them as valid, and it is the job of alerts to identify them in the offline analysis stage and pass these suspicious clicks to human experts for manual investigations.

-Still, despite its noticeable negative effects on its financial performance, Google decided to abandon the old doubleclick policy and not to charge advertisers for the second click, which was an appropriate action to take

There’s a Click Quality Team at Google that tries to figure out if any of the invalid Clicks are valid, and if they are not, the advertisers should not have to pay for those clicks.

"Using various data mining methods, one can build a statistical (data mining) model based on the past data that can classify new clicks into valid or invalid and also assign some degree of certainty (probability) to this classification."

-Pre-Filtering. Certain clicks are removed immediately from the logs before they are even “seen” by the online filters.  However, new and better filters will require a more powerful computing infrastructure than is currently available, and the Click Quality team also participates in developing this infrastructure. Google provides several filters (with thresholds) that are applied one after another (sorta reminds me of Sendmail).

In addition, when complaints are investigated they come about through two avenues:

Advertiser complaints: an advertiser notices unusual clicking activities and requests Google to investigate those activities for the presence of invalid clicks.

Publisher’s complaint: publisher notices some suspicious activities on his/her site and asks Google to investigate them.

Once such deviations are discovered, the investigator “drills down” into the problem and uncovers the reasons causing these deviations and, most likely, the source and reasons for the inappropriate activity or a set of activities. The outcomes of these investigations is the determination of whether

1. • The invalid clicks are present
2. • No invalid clicks are present
3. • It is unclear if invalid clicks are present

I got to all of this in about 20 minutes of my time using Pertinence Summerizer - perhaps I would have gotten more out of reading the whole document but I don’t have 3 hours to spend right now.

I’m told the right percentage of click fraud is about 15% (or 800 million dollars a year) by San Francisco Chronicle - got the news from MarketingShift.

"Almost 15 percent of all ad clicks are fraudulent, according to a new survey from market research firm Outsell.com

Advertisers are becoming more aware of the problem as 75 percent believe that they overpaid for clicks, and 37 percent said they have or would reduce their ad spending because of click fraud.

If numbers are correct then the class-action lawsuit only covers a fraction of the actual costs incurred by Advertisers.

I have to put together a click fraud analysis for one of my clients this weekend (I’ll use Keywordmax) but even as I do this I get news that the 90 million Google Click Fraud settlement is in jeopardy according to MarketingShift.

Google’s paltry $90 million settlement of a class action click fraud suit could be in danger. A lawsuit has been filed to block the settlement, which enriches the lawyers by $30 million but only gives $60 million in account credit - meaning zero cash — to advertisers who paid for bogus clicks.

The settlement amount was miniscule compared to most estimates of the click fraud damage, so this is no surprise. But the longer Google waits to quash this irritant, the more it may wind up costing them in PR and customers.

Found via BetaNews.

Using Keywordmax Click Auditor I can determine clicks that are close together coming from the same ip address (I usually choose those within a couple of minutes) that have the same exact or a similar query.  Once I collect those records, I further analyze them and eliminate behavior that suggests it’s not click fraud (ie: a search on office furniture from NYC Board of Education that focuses on desks, school desks, secondary school desks and high school desks within 1 minute is probably not click fraud - it’s probably just someone looking for data).

Now, if we’re talking about 30 million of the 90 million in settlement money going to lawyers we’re almost down to no money for click fraud - given how much click fraud is being reported or estimated to be happening!

Instead of 60 million for victims of click fraud I’d like to see 600 million.