Google sued over ‘click fraud’ in Adwords
On June 24, 2005, a lawsuit was filed against Google for alleged
click fraud on the Adwords pay-per-click program. The Plaintiff,
Click Defense, claims Google failed to enact appropriate
measures to guard against fraudulent clicks resulting in
unwarranted marketing fees. Click Defense claims it has lost
over $5 million to click fraud.
Click Fraud “Click fraud” is a term with a unique meaning on the
Internet. It refers to the deliberate clicking of pay-per-click
advertisements by users that have no intent of actually making a
purchase. It is common knowledge that unethical companies will
set up click centers oversees where individuals are paid nominal
wages to click on certain ads. Alternatively, companies will use
programs called “click bots” that automatically search out ads
and do the same thing. The end result, of course, is a bevy of
clicks that drain advertising budgets.
Google claims it takes appropriate precautionary measures. This
claim, however, is often met with a snicker since the sole
source of revenues for Google is advertising. This causes an
inherent conflict of interest since Google needs to maximize
clicks to generate revenues. As a publicly traded company,
Google is under pressure to continually show increased profits.
Taking all of this into account, one must wonder how hard Google
works to limit fraudulent clicks. If you have used the “content
search” aspect of Google Adwords, the incredible poor conversion
rates certainly must raise doubts in your mind.
Click Fraud Percentages
Neither Google, Overture nor any other search engine has been
willing to publish click fraud rates for their paid advertising
program. Hints have been provided regarding a rate of 20
percent. Active advertisers know, however, the percentages can
be much higher depending on the competitiveness of the keywords
in question. Click Defense, the Plaintiff in the lawsuit, is
claiming a click fraud rate of 38 percent.
Will This Impact PPC?
The lawsuit against Google was inevitable. Every site using
Adwords is aware of the problem with click fraud. Frankly, it is
a problem with every pay-per-click search engine although our
experience has been better with Overture.
So, will this lawsuit force the search engines to clean up their
act? It’s hard to say, but there should be one definite benefit.
As part of the lawsuit, Google may be forced to reveal the true
click fraud percentages occurring in Adwords. If Google moves to
quickly settle the case, you should take it as an indication it
wants to keep the rates confidential. This, of course, will mean
the click fraud percentages are high.
You should watch the progress of this lawsuit if you use
pay-per-click search engines to promote your site. Some very
interesting information should be revealed. Regardless of the
outcome, click fraud is just another reason to pursue search
engine optimization strategies.
