Official Google Blog: “Let click fraud happen”? Uh, no.
You may have seen some of the media coverage generated by a blogger’s quoting Eric Schmidt about click fraud. By using select excerpts and ignoring the context of the remarks, that blog post made for an interesting read, but was unfortunately misleading.Eric spoke at a SIEPR economics event at Stanford in March. At the end of his remarks he took questions. (You can view the whole presentation and Q&A that followed here.)
Here’s the relevant question Eric was asked about click fraud: “Recently there’s been some talk about click fraud being a potential threat to the entire advertising business model. I was just wondering what your thoughts on that were and if there’s an economic solution to it more than just technical solutions.”
Eric made clear from the very beginning that he wasn’t describing our approach to click fraud and was answering hypothetically. He introduced his answer by saying: “Let’s imagine for purposes of argument that click fraud were not policed by Google and it were rampant …”
The “let it happen” excerpt followed, in which he discusses the economic forces that can retard click fraud: “Eventually the price that the advertiser is willing to pay for the conversion will decline because the advertiser will realize that these are bad clicks. In other words, the value of the ad declines. So, over some amount of time, the system is, in fact, self-correcting. In fact, there is a perfect economic solution, which is to let it happen.”
But he made clear that we don’t take that approach, by adding that click fraud is “a bad thing and because we don’t like it, and because it does, at least for the short-term, creates some problems before the advertiser sees it, we go ahead and try to detect it and eliminate it.” He also said, “In Google’s case, we worry about this a lot and we have a number of technical engineers who think that this is great fun to try to go ahead of this and get ahead of it.”
The fact is that Google strives to detect every invalid click that passes through its system, and to prevent those clicks from ever reaching an advertiser’s account. And Eric and many others at Google have discussed the problem of invalid clicks publicly many times — on our quarterly earnings calls, at our Press Day, and in other places, such as blogs. Anyone who has followed Google knows that Eric, and others at Google, have stated several times that Google fights invalid clicks, that we’ve devoted significant resources to manage it, and that we take it very seriously.
Well two thoughts…
One it’s good to see Google stand up and say, “hey that was taken out of context” and explain that they are fighting click fraud.
Second is sorta true though…. If you have click fraud it will even out by having the ads be worth less. Problem for Google is that it would mean less money for them in the long run.
Tags: Advertising, Google, Interesting
July 17th, 2006 at 8:09 pm
Why have people started hating Google?
We know what Eric Schmidt means, what are you whining about,
he did say assuming we were to let people click for themselves….
it was a conditional argument, but ofcourse people wont get that.
Eric probably didnt want to boast, and I can see why because Google has probably got the best technology and resources to prevent click fraud from happening, amongst any other company in the world. Its probably already eliminated the entire problem on its AdSense program.
Kanhar Munshi
LeanSwat Analyst.
July 18th, 2006 at 9:17 am
I think it’s a mixture of jealousy and also jump the gun. Some advertisers think that they are getting billed for click fraud and Google doesn’t mind since they get their money. They don’t stop and realize that google can make more money if they continue to keep the value of an ad. Like Eric said, if you ignore click fraud it balances it… but by dropping the value of the ad. Google of course would want to stop it.
July 20th, 2006 at 5:21 pm
If advertisers were to take advantage of Google’s Analytics, then they would see that every click is monitored by Google. They can see geographically, and by refering site exactly where each click occured. If an unusually high number of clicks were to happen in one city, originating on one particular site, then Google (and the advertiser, for that matter) can see that click fraud is occuring. If Google didn’t stop it, individual advertisers would still have the ability to block specific sites from displaying their ads. These tools are already in place. Advertisers just need to take advantage of the tools that are already available to them.
July 21st, 2006 at 11:41 am
Why you need to Fight Click Fraud
I have been reading and thinking a lot about the dilemma of Click Fraud. I
believe Click Fraud is more of a danger to existing Google AdSense
publishers who are honest than Google.
I also read about eBay promoting click fraud with allowing people to place
dishonest ads. Shame on eBay!
See below:
http://www.e-consultancy.com/n.....-fire.html
also see:
http://www.bloggingstocks.com/.....e-on-ebay/
I believe Google has created tremendous value with Google AdSense. Google
and Google AdSense Team should be congratulated for such achievement.
Let me show you how I mean this.
Here is my reasoning:
First, I like to pose this question:
How much is your website worth if you generate revenue from Google AdSense?
Let’s say your website makes a good $30 per day on average.
This is how we calculate the value of your website:
Yearly income = $30 x 30 x 360 = $32,400
Value of the Website= $32400/interest rate = 32400/.07 = $462,857 (this is
assumed that the income will never end and is good for ever
Of course if the income grows, the value will be even more)
How many websites do you think make over $30 per day? If the answer is say
10,000. Then total value created is: 10,000 x $462857 = $4,628,570,000.
That is more than $4 Billion.
Google should be congratulated for creating such a wealth.
I am 100 percent sure not many honest AdSense Publishers are aware of this
value.
If they knew, they would also be more protective of the existing AdSense
system and the integrity of the AdSense system. Hence, I believe Google
should plan a campaign to educate the honest Publishers of such value and
the fact that Click Fraud can jeopardize this value.
If the Honest AdSense Publishers recognize this value and also recognize the
danger that such value could be jeopardized by Click Fraud, they will take
action.
This might relieve Google from Burden of fighting Click Fraud alone.
I suggest AdSense Publishers boycott eBay. We must fight along Google to
eradicate Click Fraud.
July 21st, 2006 at 2:46 pm
One problem in your reasoning. Google does track down and try to stop click fraud. It may of been a problem… but as they have stated they are trying to counter it.
If a publisher feels they are a victim of click fraud then they should protest it and point out that the value of the ad must of dropped…
Also if a publisher sees they are being defrauded… have them log in and black-list the problem addresses. That also isn’t very hard.
Mind, I’ve seen the articles about the ability to hire some one to commit click fraud for you, but if they (the publishers) see a huge jump, It’ll be easy to prove click fraud.