I'm Tired of Click Fraud Boogie Man Stories....

22 comments

...advertising fraud exists in other media, too. If anything, the levels of accountability and tracking available in web advertising allow more for protection.

It's an imperfect world, learn to deal with it.

Comments

I think people are envious

I think people are envious of the more efficient marketplace that search offers...so they trump up the click fraud stories as though advertising fraud is new to the web.

It's all about Google

I don't think it's about just PPC, I think it's more about Google as people want to hear when the hottest newsworthy company has an achilles heel. The bigger Google gets, the more frenzied will be any story about Google that shows any particular sign of weakness.

Before Google it was about Overture/Yahoo, soon the honor may be passed to Microsoft when their ad network has been around long enough to be seriously abused.

On the bright side, we aren't being bombarded with the all Scott Peterson news anymore.

oh wait, here's a NEW whine

The Blackhat Tax

Does the existence of hacking/phishing/fraud cost commercial websites? You bet. But, you know what, I have several bricks world businesses and security, government, insurance, employee theft, etc. kinda screw up the idyllic dream, too. GEEZ!

Kidding Right?

Click Fraud is running at 30% for some industries 'levels of accountability and tracking available in web advertising allow more for protection' wow now I feel better. So that means we can stare at multiple click fraud bots and even know it's happening but still must eat the cost because of course 'it's a normal click pattern'

Why GOOG Click Fraud *IS* Important...

Look, GOOG is one of the biggest companies in the world in terms of how much money is currently invested in it (market cap). GOOG is in the top 10 (if not top 3) most heavily traded companies (average volume * stock price + derivatives), in which over 1.6 trillion (as in Tango) dollars flows yearly, in just standard stock purchases and sales.

Let's put that in perspective: More money is traded in just GOOG stocks than the majority of money that is theoretically producable by most of the countries of the world, and roughly 1/10th the GDP of the U.S.A. or functionally equivalent to the amount of goods the U.S. imports.

While GOOG makes more net profit, YHOO traditionally outperforms GOOG in terms of profit over revenue. Additionally, GOOG is 100% advertising while YHOO is far more diversified in the ways it generates money (such as its partnership with SBC). In every thing except for search, YHOO still holds clear monopolies, even over long-standing services such as GMail.

GOOG is more implicated in any and all clickfraud allegations because, until very recently, GOOG was the only company with a widespread implementation of AdSense. GOOG is also the only search engine with a major interest in domain squatters, which have probably affected all of us. Did you know that according to some sources, 35 - 50% of GOOG's Jan - May 2006 revenue came from its AdSense on type squatted domains, due in no least part to its somewhat unethical partnership with GoDaddy?

GOOG is a *LOT* more secretive than MSFT, ASK, or YHOO in terms of how they get their money and how much they make. While starting as petulent child geniuses, over the years of stock dumping by their executives they more and more take on the arrogant airs not seen since Ken Lay was busy planning his next TV spin.

GOOG click fraud disproportionately affects small and middle sized businesses. Think of how few small businesses can afford the exorbient expenses for SEOs, SEMs, etc. Think of how many must be the victims of ad spam, especially start up lawyers but really any one where the ad price is high.

AdSense is policed with as much vigilence and compassion as the national border; in both cases, the crooks that would mean to take down America and Europe benefit. Make no mistake, the GOOG bubble *will* burst; the only question should be, Will you warn others so that fewer will be hurt than otherwise would be?

OK, so Microsoft has double the market cap...News flash! NO ONE is claiming upwards of 50 percent of Microsoft's revenue comes from fraud. Microsoft also has a very diversified product line; GOOG, they get diversified to the point of absurdity but not a single other product besides www.google.com has ever earned a dime, and only a handful have any advertising.

Microsoft's stock won't halve by tomorrow; GOOG's very well may; nothing holds it up but secrecy and faith. And besides, when was the last time you saw Bill Gates or Tim Mayer (CEO Yahoo) sell off hundreds of billions of dollars of their stock? LAst time I saw that, it was Ken Lay doing the selling.

hopeseekr, that´s a lot of

hopeseekr, that´s a lot of bullshit that your are writing ...

I can say for me that my click-bids are strictly depending on my ROI. If my ROI is not acceptable I will lower my bids. I assume most advertisers will do that. If the click fraud rate is raising many advertisers will lower their bids. I think overall a high click fraud rate will not lead to extremely more ad revenue for that keyword(because a higher click fraud rate will lower the ROI). At least not in the long run. So I don´t think of click fraud as a big problem for me as a advertiser. Especially problematic are competitors who are using programs to automatically click on ads. But I think that are individual cases with accumulation within specific sectors. A problem with AdSense click fraud could be that the money is going to the wrong publishers (the fraud-publishers), but I am confident that smart pricing is doing a good job.

Huh, hoping my English is not to difficult to understand ...

Fraud is a Normal Business Expense - As is Security

Black hat tax - yet another Web 2 re-identification of business as usual. How to display your ignorance while trying to appear bleeding edge.

1. Only a government can levy a tax. So it is not a tax.
2. Hat colour used to apply to SEO practice now apparently it has replaced morality and ethics, regulation and law. I love to detest the bloggarts of the blogosphere (which is somewhere west of Oz).

[quotes from rcjordan posted link]

That means that 25% of your engineering time and 25% of your management team is about preventing fraud. That is a really onerous tax.

The Black Hat Tax is costing consumer Internet companies Billions and billions of dollars. And it is a much higher percentage tax than off-line brick-and-mortar shops invest in security and anti-fraud matters.

Fraud is not a tax - see above. Fraud prevention is a basic cost of doing business, online or off, that I still call Security Expense. That most sites spend zilch on security is their problem and so is their resulting fraud cost. Save on one, spend on the other. Ask a big B&M retailer their costs for security, fraud, and theft - it is the lack of security planning/spending that is 'unique' to the web not the cost of fraud.

he had to ensure that the information was backed-up and cannot be erased for at least three years

It is digital for crying out loud. Where is the difficulty? Have any of these whiners any real business experience? Saving actual warehouses of paper records? How about a business plan? A budget? And no, jottings on a napkin do not count.

Mr. Hoffman's resume reads well but that particular column refutes he learned much. Perhaps that is the great wonder of the web - get rich without knowing how.

As regards click fraud: if you find it too much of a problem take your business elsewhere. Go where the ROI for you makes sense. That the majority of people are still making 'click' money is proven by them still spending. Like credit card chargebacks click fraud is just another cost of doing business and largely out of our hands - except for walking away from the system.

Black Hat Tax my ass

The easiest sites to defraud and the most frequent targets are those selling non-tangible goods, like web hosting, dating sites, online porn, etc.

I was in the ecommerce game for a long time and my company was personally never defrauded as we VOIDed all fraud charges the same day, no harm, no foul, nothing lost, and those were very rare.

4 reasons for that:

1. Only shipped to the actual billing address with full AVS enabled, you want to send a gift, re-ship it your own damn self once you get it.

2. Called all customers with large orders over $100 to confirm the order, toll free, pagers and voice mail systems were discarded.

3. Had all orders flagged where the originating IP or email address source came from a different country than the billing address and discarded.

4. For REALLY BIG U.S. credit card orders, we faxed a signature form and international orders above a certain amount required a wire transfer.

No nonsense is what it takes to have no fraud, the rest can rot in their own complacency.

Those who think the fraud is

Those who think the fraud is 30% or 50% or whatever are using an overly robust number that misses the fact that to some extent it is priced into the market price

priced into the market?

Only by stupid or lazy merchants that don't know how to avoid it in the first place.

Personally, I get sick of the whining.

Weakest Link != Victory

In any debate, the defensive team must counter every substantial argument. What has happened in this thread is that the weakest link in my chain of logic (e.g. the arguable percentage of clickfraud) was the only piece even discussed, with various people even going so far as to unprofessionally categorize the sum of my writings as "bullshit", which is itself a non sequitur ad hominem.

The fact is that click fraud *is particularly important when it is linked to GOOG* because it is GOOG's sole source of revenue and a very large portion of the economy is in a company that would make many of the dotbombs look like Walmart in profit assurance.

It's not how much money is investigated in GOOG (tho it is massiv), it's how risky its foundation is and how much harm it will do to others when it falls. But, just for those who may lack imagination and empathy for strangers: What happens when GOOG drops to its conservative market value of $150/share? All those GOOG employees who've borrowed millions using their hundreds of thousands of dollars of GSUs (GOOGle Stock Units) as collateral now are freaking out and in comes some startup saying "Want security? We have a good business model and we'll pay you cash." Within a few years, GOOG has done a YHOO when it crashed in 00 and now all of your clients are screaming that no one visits GOOG any more.

> What happens when GOOG

> What happens when GOOG drops to its conservative market value of $150/share?

I buy a few hundred or few thousand shares.

I think Google's foundation is much more stable than most people think.

Google already has like $10 billion in the bank, which is about $40 a share right there. When you look at forward price to earnings compared to its industry peers Google is actually a good bit cheaper than Yahoo!, eBay and Amazon...especially when you factor in Google's higher growth rate.

On top of Google's high margin income streams they also have brand value that is second to none. The only reason I don't buy a bunch of Google stock is because right now I feel I should be able to make more through manipulating search than through investing in it, but short of the collapse of the US economy or some laws that force people to not trust Google enough to use it I don't see Google stock hitting 150 anytime soon.

MS

will establish a "baseline" on the fraud front, Billy isn't going to risk the empire for flakey revenue. Too bad for the boys that believed their own press but I'm sure they've been warned, too late to put the horse back in the barn now.

Stock price is high because its indexed, money managers are forced to hold it and no one (analysts/institutions) will step up on the issues until the only ones left to get hosed are the poor little indy investors, of course you get the Spitzers coming in for the kill after that party.

There is time, just a matter of how much.

tick tick

fraud

is never good long run, economies, countries, empires collapse because of it, google isn't going to get a "cost of doing business" bye card on it.

While Click Fraud Cost Can Be Spread It Will Remain

Until Google (and similar) has to eat the cost, the whole cost, and not pass it on, nothing will change.

google isn't going to get a "cost of doing business" bye card on it

The individual advertisers/publishers have the choice of accepting click fraud as a 'cost of doing business' or of going elsewhere. That the present rate of click fraud (whatever it might be) is not causing a mass exodus is apparent in Google's earnings. Thus participating companies are accepting click fraud as an acceptable cost of business based on their current ROI in the programs.

Google (like similar suppliers) has to balance the cost of combating click fraud with associated revenue changes. It is not necessarily true that revenue would increase to cover the increased costs of substantive click fraud elimination.

Additionally, for example, if a supplier only reimburses a portion of actual fraudulent clicks it is good for their bottom line. Also, for example, if the reimbursement comes after a month or three of money in the bank earning interest this too is good for the bottom line. Until sufficient advertisers/publishers find somewhere else to get a greater ROI Google, as with similar suppliers, will remain quite happy with the status quo.

The real 'dirty little secret' of click fraud is that the suppliers (like Google) have a vested interest in a level of fraud somewhere below the advertisers/publishers tolerance threshold. There are two entities that profit from click fraud. One is cheating, the other skimming. Guess who.

When click fraud really

When click fraud really hurts is when it’s competitor sabotaging your campaign.
If anyone thinks that’s not problem post your add url here

>post your add url

>post your add url here

threadwatch.org ;)

i guess

only newspaper execs go to jail for fraud. You have to look past your nose here, costs get passed onto consumers, this whole line of reasoning about sufficient ROI is BS.

Its not an internal problem.

Only reason click fraud isn't an issue...

THere is only *one* reason why click fraud is not a paramount issue in the minds of *every* AdWords buyer: Lack of intel.

Seriously! What percentage of AdWord shoppers even knew that there were sponsored ads on GOOG results pages any way? Eighty percent like the rest of America? How many have ever considered that GOOG may be acting in bad faith when they assure them that their Almighty Algorithms can auto-detect click fraud so that it never ends up on thier bottom line.

How many have sophisticated log analyzers capable of determing paths based upon referal source? Hell! How many of your clients even seem interested in the least in looking at such stats programs?!?

> There is only *one* reason

> There is only *one* reason why click fraud is not a paramount issue in the minds of *every* AdWords buyer: Lack of intel.

or, more likely, a general lack of concern.

some people spend so little and get such great return that it is not worth worrying about a few pence here or there.

The time is coming when everyone will have to tighten their belt

Yes Adwords has been good to those who got in early.

Yes they have been able to soak up the level of click fraud there is currently.

However as more and more businesses jump on the Adwords bandwagon, the bid prices are being forced up due to the number of advertisers and it becomes a game of maximise revenue per click.

In order to do this you need to eliminate as much extraneous cost as possible. Click fraud is such a cost, but there are many others such as badly optimised creatives, bad usability on the site etc etc

You basically address the problems in priority order - the fact that click fraud is being given so much attention recently is that it has started to get to the number one priority for some people.

Tim Mayer is doing well...

Quote:
when was the last time you saw Bill Gates or Tim Mayer (CEO Yahoo)

Wow. He's doing quite well for himself, isn't he?

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