Google and Click Fraud: Behind the Numbers

Last week, we cited a study finding that 16.6 percent of all pay-per-clicks on the Internet were fraudulent in the fourth quarter of 2007, up from 14.2 percent for the same quarter in 2006. The statistic, as reported by MediaPost, was compiled by Click Forensics, an independent auditor that has created the Click Fraud Index. Given what must be billions of total ad-clicks on the Internet, as well as the constant development of click fraud detection programs by online ad providers, the number seemed surprisingly high.

Enter Google, which maintains that its internal click fraud algorithms tell a different story. According to the Google AdWords blog, the company maintains a “3 part system for invalid click detection” that involves filtering out anything funny-looking, analyzing the filtered clicks to determine how many are actually fraudulent, and then investing accordingly. Freakonomics spoke to a Google spokesperson, who explained the discrepancy between the first and second steps in the Google process:

Not all invalid clicks are click fraud — for example, the second click of a double click is not one with malicious intent. But since our goal is to filter out as much click fraud as possible, we cast the net of invalid clicks wide enough to effectively minimize that proportion and ensure that advertisers are only charged for valid clicks. The invalid click rate [i.e., the total number of clicks filtered out by Part 1] has remained in the range of less than 10 percent of all clicks every quarter since we launched AdWords in 2002.

After these figures are analyzed offline, Google maintains that the number of fraudulent ad-clicks not caught by the filters is less than .02 percent of the total clicks on Google ads. So it looks like, on Google’s end anyway, the number of click fraudsters may not be quite so huge, and that the metrics used by third party auditors such as Click Forensics may be flawed. A Google spokesman wouldn’t speculate as to how many people that .02 percent represents (though whatever the number is, it has likely declined, given that the company’s total ad-clicks were reportedly down 7 percent in January). Anyone care to do the math?

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  1. mmm says:

    Come on now. So what if Google claims that its click fraud rate is like .02%? Their entire business is run on ads and click through ads in particular. They have every reason to engage in puffery regarding the less fraudulent nature of its clickers.

    And, I doubt very highly that Google would ever let a third party validate its numbers.

    That said, the truth is probably somewhere in between, say, 1 in 10 clicks is fraudulent?

    Also, is there a standard definition of “fraudulent” clicks?

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  2. Venkat Kolluri says:

    The percent click fraud rates across the board are much lower than what the original MediaPost article suggests. In fact, over the past few years lots of ad networks have improved the internal click filtering process to be more pro active towards click fraud just like Google. At Chitika, we have several steps in place to get better analysis of clicks.

    For instance, detailed conversions data (i.e., the clicks that actually resulted in sales or sign-ups etc) from the merchants/advertisers side is fed back into our click monitoring systems and we are able to track the quality of clicks from various sources. We are no longer relying on guesstimates based purely on click activity and click patterns.

    The processes that we put in place help us quickly hone in on the top click traffic partners and we are able to tighten up the click acceptance metrics at the publisher level. The click monitoring systems might not be that effective for small publisher clients, but the accuracy is pretty high for large publisher accounts. So we can expect to see higher rates for smaller accounts, but the click acceptance rates are pretty much on target for those accounts that contribute to the majority of the click traffic.

    Therefore, the percent of click fraud is far lower than 16.6% measured in the MediaPost study.

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  3. gcruse says:

    “16.6 percent of all pay-per-clicks…”
    “up from 14.2…”

    16.6% is really 1/6 while 14.2% is really 1/7. Taking the numbers to one decimal place instead of simple fractions casts the penumbra of hyperbole over the point being made.

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  4. John says:

    In Google we trust.

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  5. MS says:

    Asking Google about click fraud is like asking George W. Bush about torture… Whatdayathink they’re gonna say?

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  6. DIS says:

    google has a vested interest in minimizing both the number of fraudulent clicks and the perception of people of the number of fraudulent clicks.

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  7. edel says:

    As some had stated here, it is interesting to read what Google’s most profitable branch thinks about its own job performance. Nevertheless the reality is likely to be way different; If one teenager can write a code that can easily bypass the best Antivirus software available (were even there are many competitors), I can only guess what a corporation with huge economical incentives could do to fool 1 single branch of Google (that shadows all competitors)…

    My guess is that Google do really try to minimize those false clicks, at least till the point where the competitors could prove it, but after that point… everything under the rug will work just fine and it’s much cheaper too.

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  8. Bill Hughes says:

    As a web master of several sites with varying degrees of reliance on ASense, I can tell you that over the past year, Google’s payout per click has dropped dramatically. So I suspect more web masters will risk click-fraud vs. closing up shop.

    I’ve bought AdWords, and I’ve used AdSense. There is a huge disparity between what Google takes in and what they payout. Unless they loosen the purse-strings, I predict the whole contextual adwords model will collapse.

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