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Google Agrees to Pay $90mln on Click Fraud Lawsuit
Posted by
samzenpus
on Wed Mar 08, 2006 09:20 PM
from the pay-the-man dept.
from the pay-the-man dept.
Hitokiri writes "Google has agreed to pay up to $90 million to settle a class action lawsuit 'Lane's Gifts v. Google'. The settlement stems from a lawsuit filed by Lane's Gifts earlier this year in an Arkansas state court and is designed to settle all outstanding claims against Google for fraud committed using its pay-per-click ad system back to 2002Google has made a statement on their blog."
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IT: How Google Manages Click Fraud 130 comments
Finin writes "In February 2005, Google was sued by Lane's Gifts & Collectibles in a class-action lawsuit over click fraud. The company alleged that Google had been improperly billing for pay-per-click ads that were not viewed by legitimate potential customers. As part of a settlement earlier this year, Google agreed to have an independent expert examine their click fraud detection methods, policies, and procedures and make a determination of whether or not they were reasonable measures to protect advertisers. The report of the expert, NYU Information Systems Professor Alexander Tuzhilin (a Professor of Information Systems at NYU), is now available." Update 07/26/2006 at 12:52 GMT by SM: Fixed the link to Tuzhilin's report.
[+]
Search Companies Team Up Against Click Fraud 84 comments
isabotage3 writes to tell us that the top three search companies, Google, Microsoft, and Yahoo, have teamed up to create an alliance to combat click fraud. The fact that these three bitter rivals can team up shows just how serious the industry has become about preserving the current online advertising boom that is currently underway. From the article: "Click fraud has attracted an increasing amount of attention amid class-action lawsuits and industry studies asserting advertisers have been collectively overcharged by more than $1 billion for bogus sales leads during the past four years. Google and Yahoo contend that those estimates are gross exaggerations generated by opportunistic lawyers and online advertising consultants hoping to cash in on the anxieties triggered by their calculations."
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Wired had a nice piece a few months ago on this (Score:5, Interesting)
Re:Wired had a nice piece a few months ago on this (Score:5, Funny)
I want to post an insightful response, but Google Girl has stonewalled my thoughts.
must....post...insightful...can't...resist...
It's credits - not dollars (Score:5, Insightful)
Am I the only one who recognizes the difference between "getting paid $1" and "getting credit for $1 - at that company"?
Re:It's credits - not dollars (Score:5, Informative)
It is a 90mln limit based on how many people apply for backdated invalid clicks.
From the blog linked above:
For all eligible invalid clicks, we will offer credits which can be used to purchase new advertising with Google. We do not know how many will apply and receive credits, but under the agreement, the total amount of credits, plus attorneys fees, will not exceed $90 million.
Re:It's credits - not dollars (Score:5, Insightful)
Well, that must reduce the amount a little, surely...
Re:It's credits - not dollars (Score:5, Funny)
Bidding prices for the adwords "lawyer" and "class action" jump into the thousands.
Re:It's credits - not dollars (Score:2, Funny)
Re:It's credits - not dollars (Score:3, Insightful)
Now Lane's Gifts just need to set up an advertising agency, and its clients will advertise via its account (and credits) on Google.
Re:It's credits - not dollars (Score:3, Informative)
Re:It's credits - not dollars (Score:5, Funny)
Plus, if Google is clever, they'll get just some guys to click on the ads bought with credit and use up that $90 million in no time...
Re:It's credits - not dollars (Score:3, Insightful)
Re:It's ALL credits - not dollars (Score:4, Insightful)
Cash is an abstraction of value. It's value comes from the fact that it's mutually recognised as having a value. That's where it's value comes from, a common-agreement. You find *anything* that people are just as willing to exchange for services/resources as money. Gold's "worthless" unless you can find someone who's willing to exchange it for something you want (eg, sex). A pig's useless if you're living with vegie hippies (not that they have money anyway).
Money means not having to look long and hard for someone who's willing to trade with you. This means you have time for other things. Money is an abstract representation of time ("time is money" is true). There is no way, by the furthest stretch of imagination, that you can say time is worthless. It's the most valuable thing you've got.
Re:It's ALL credits - not dollars (Score:2)
That, and the tin foil gloves make it hard to type a 200 character password without error.
Re:It's ALL credits - not dollars (Score:2)
Tip of the iceberg (Score:5, Interesting)
Reasons why I'm concerned about Google's business:
Cue Google-fanatic flamewar.
And in other news... (Score:5, Funny)
Re:Tip of the iceberg (Score:2)
Re:Tip of the iceberg (Score:3, Insightful)
There are people out there who have a hard time working the remote control for their TV. When these people go on the Internet they use "Internet
Re:Tip of the iceberg (Score:2)
Re:Tip of the iceberg (Score:3, Insightful)
Re:Tip of the iceberg (Score:5, Informative)
2. This may be true but in the end the value of a click is the choice of the consumer. People clicking accidentally on a Google ad is no different from people "accidentally" hitting the remote in the middle of a Bud commercial and missing the second half of the 30 seconds. These accidental clicks are factored into the overall effectiveness of the ad.
3. Most small business might be in the honeymoon, but not large businesses. Most of these are looking very seriously at the bottom line, and finding it's lower than they expected.
4. At the per-click rates customers pay for certain terms, yes I believe it. Compared with other forms of advertising paid search is turning out to be an incredible value. The main question is how much Google and Yahoo can continue to fine-tune the targeting to squeeze out that much more revenue.
--- not a Google fanboy as such, but convinced online advertising is where the money is at.
You're right, but I wonder (Score:3, Insightful)
I'll try not to be Mr. Obvious here, but consider this: when companies buy time on TV, they have n
Measuring Results (Score:4, Interesting)
Is there any reason why internet ads do not do this?
Re:Measuring Results (Score:2)
Pretty soon, two trends will effectively offer these ki
Re:Measuring Results (Score:5, Informative)
On the web, all you have to do is create different landing pages for each of your adverts. These are unique, and the stats speak for themselves.
Using decent server side code, it's also possible to distinguish which advertisement your actual purchasers arrived from, and this is quite prevalent amongst serious e-commerce businesses.
If your IT department isn't all that good, you can splurge big time on a very sophisticated WebTrends account, which will do all this stuff, and a lot more besides.
Re:Measuring Results (Score:2)
but does it also tell you howmany of those people went on to buy somthing right away?
how about people who used google to find you, checked out your product but only came back a week later,
Deceptive (Score:4, Informative)
Re:Deceptive (Score:3, Funny)
What manual? Did I wander into a Linux IRC help channel?
the going rate (Score:2)
cribot.com [cribot.com]
Re:the going rate (Score:2, Interesting)
Re:the going rate (Score:2, Informative)
Man, i didn't know people still had to put up with that crap. I just assumed once AdBlock became so prevalent they just got rid of it.
Anyways, if you dont know what adblock is, you dont belong on slashdot. However, if
Re:the going rate (Score:2, Interesting)
$90 million / number of adsense users = aiaiai (Score:2, Interesting)
Bullshit (Score:4, Informative)
Google usually allows advertisers 60 days to claim invalid clicks and recieve a refund for those clicks. Google has made a deal wherein they will allow advertisers to make invalid click claims going all the way back to 2002, and offer advertising credits for all of these clicks. Google does not yet know how many invalid clicks will be reported, but under the terms of the agreement the maximum credit given will come to a total of no more than $90 million.
So in other words, this posting is either FUD or just bullshit, and Google isn't paying anything, but rather offering advertising credits.
$90mln? (Score:4, Funny)
What's wrong with calling 90 Megabucks $90M ?
Unless people are worried about conflicting with powers of two, but in any case that should be denoted: $90Mi, or 90 Mibibucks.
Or does mln denote "Millions of dollars worth of in-store advertising credit", which another poster has pointed out is what the plaintiff is receiving.
Mebibi (Score:2)
Click Fraud Facts (Score:5, Informative)
Click fraud runs about 40% when noobs manage a Google Adwords account. Much of that comes from Adsense via the Google content network, because it's a way for webmasters to line their pockets at the advertisers' expense. Competitor click fraud happens too.
The ways to control click fraud are:
1. Set low bids on the content network. Click fraudsters pick on the richest bids.
2. Exclude sites from the content network that show below average conversion rates.
3. Use your own tracking URLs to double check Google's conversion figures.
4. Don't show your ads in cheap offshore locales. Some sleezebags have set up click fraud offices in these places where people are paid to surf and click on your ads.
Discount your bids to account for the cost of click fraud. As long as you are happy with your net cost per conversion, click fraud is just a cost of doing business. Your bids are lower, Google earns less. If Google wants to earn more, they should the eliminate fraud.
Great News (Score:2, Interesting)
Personaly i have seen hundreds if not thousands of tracking erros
For example a user clicked on our Ad 10 times in less then 5 seconds, and then another user clicked
Google Obviously Has The Leverage (Score:3, Interesting)
For the finance folks out there wondering how we'll account for this, we can say that the attorneys' fees (which will be determined by the judge) will be charged as an expense, most likely in the first quarter, once the amount is determined. The credits will be recorded as a reduction to revenue in periods in which they are redeemed.
Anyone who is acting like Google isn't paying enough doesn't understand either economics or the american legal system (notice I didn't say justice system). They may understand the difference between right and wrong (and I don't think Google is right), but they fail to understand "the way things work in the real world."
No, Google is not paying $90 million. (Score:4, Informative)
All this is costing Google are the legal fees.
Re:No, Google is not paying $90 million. (Score:2)
All this is costing Google are the legal fees.
That isn't true -- there are lost opportunity costs too, though in practice they certainly won't come out to anywhere near the $90mln number. They do exist, though.
Lame (Score:4, Funny)
How about Overture aka Yahoo... (Score:3, Insightful)
Re:So how do I actually know? (Score:4, Informative)
here [blogspot.com] and here [google.com].
They answer your questions.
Google wants you to get good value for your money and are doing it in their usual excellent way.
Re:So how do I actually know? (Score:2)
Re:WTF is "click fraud"? (Score:5, Interesting)
Re:WTF is "click fraud"? (Score:5, Interesting)
The problem is that Google is charging advertisers for adverts which were not seen (by humans).
I can understand that the advertiser feels cheated if Google charges advertisers for 1 million clicks on their adverts, but 999,000 of them were faked by a script and only 1000 times a human end-user clicked the advert.
The problem gets worse when companies are deliberately faking clicks to create huge advertising bills for their competitors, even though their adverts are not being viewed. Similarly angry customers could do this to 'get their own back' on a company that they feel has cheated them.
Google has a problem here and they need to fix it or people won't want to risk using their service to place adverts.
Re:WTF is "click fraud"? (Score:2)
Also, it depends on what Google's contract was. If Google said they'd bill some amount "per click-through", b
No... (Score:2, Informative)
"I get paid x per click of this ad, so I'm going to click it lots to get money from the advertiser"
or
"My competitor pays x per click of this
mln (Score:3, Funny)
n mln = (10^-3) * ln(n). It's short for 'milli-log-natural'.