In a study released earlier this year, Click Forensics says that 17.1% of all clicks on ads are fraudulent, with almost a third of them perpetrated by automated “botnets”, groups of computers taken over (via trojan horses, viruses, etc.) and controlled remotely.
At some point this problem is going to come home to roost and advertisers will penalize ad-serving systems (and the publishers that use them) appropriately. The problem that I see is that there is still insufficient transparency in the ad-serving market to be able to address this issue.
Craig Danuloff in a post about Google’s quality score says:
[Google sells] a product with secret specifications which are subject to change, and charge[s] whatever they want without even telling anyone why or how. Nobody but the Mafia selling protection services to local merchants ever got away with this before.
While not addressing the question of click fraud directly, that is the inherent problem. Ad-serving networks (Google, DoubleClick, Yahoo!, Microsoft AdCenter, etc.) are still taking the position that they have the exclusive right to determine whether clicks are fraudulent. It makes you wonder if there is a business model for pay-per-click advertising wherein greater transparency is built-in, perhaps through a trusted third-party engaged at arms-length to make an assessment of click fraud.
The value proposition to advertisers would take the current PPC one step further: pay only for valid clicks, as determined not by us in a black box, but transparently by a third-party.
Read the full article: http://news.cnet.com/8301-1023_3-10151618-93.htm
Tags: advertising, click fraud, statistics
By fraudulent, they mean draining their competitor’s advertising budget, right?
There’s no way to make money off this, since it’s only Google who is collecting money here, or do I misunderstand?
No, the point is that by clicking on Google Ads on your site, you get paid. So the fraud is to click on your own site’s ads.
Google says they will not pay for clicks generated by a bot or other invalid clicks, “as reasonably determined by Google.”