Click Fraud II – A $250M/year industry
Click fraud forces the three mayor search engines to throw out clicks worth more than $250 Million. And those are only the fraudulent clicks they can detect. The real number is most likely twice as high.
According to Shuman Ghosemajumder, Google’s business product manager for trust and safety, invalid clicks rate â€” the activity rate â€” has remained in the range of 10 per cent of all clicks every quarter since Google launched AdWords in 2002. At Google’s current revenue rate, every percentage point of invalid clicks Google throws out represents over $100 Million per year in potential revenue foregone.
Google claims it does not charge its advertisers for clicks it determines to be invalid. For example, if 10 out of 100 clicks were excluded Google would not charge its advertisers for the invalid clicks, cutting into the company’s revenue.
But the company settled a click-fraud lawsuit in July 2006 for $90 million US, with $60 million in ad credits going to the claimants and $30 million paid to the plaintiffs’ lawyers. A number many experts think is way below the actual damages that are done.
There are many more ways that Google could prevent click-fraud that seems obvious to many webmasters that have not been explored. For example: how about excluding known IPs from clicking on AdWords altogether? Or how about allowing advertisers to submit an IP range from which they do not accept incoming clicks?
The motivation seems obvious and may come back to haunt not only Google but all PPC providers.kameir