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Andy Beal at MarketingPilgrim has an interesting article, in which he reports claims from Google that their click fraud rate is less then 2%.
Andy has been talking to Google’s business product manager for trust and safety, Shuman Ghosemajumder, about click fraud detection. He was shown a PowerPoint presentation which was normally for Google employees' eyes only.
Shuman talked Andy through Google’s process of filtering out fraudulent clicks, saying that the majority of these clicks are filtered out before advertisers are sent the bill.
Apparently, Google uses four layers of filtration.
The first filters clicks from search and Adsense partners, and removes them before they show up on the AdWords console.
The next two layers filter out AdSense clicks, the second being an automated process, while the third is a manual process in which a team of Google employees remove any suspicious clicks.
The fourth layer of click fraud detection is left to advertisers themselves, as well as fraud detection companies, and constitutes the amount of click fraud which Google investigates after billing.
Andy estimated, after being shown this process, that the amount of click fraud is therefore less than 2%, something which Google confirmed as being in the right area. This is much less than the click fraud cynics would have us believe.
Shuman explains to Andy that some estimates of up to 30% click fraud are reached through a number of misidentifications. For example, a number of clicks from the same IP address could be due to a corporate network using the same IP.
Donna Bogatin at ZDNet is not impressed though, and sees the hidden hand of Google PR in Andy’s article. She points out that, whatever secret slides have been shown to Andy; it is no substitute for transparency, something which advertisers have previously requested from Google.
She suggests that Google advertisers should demand third party oversight on the search engine’s mysterious process of detecting click fraud.
Danny Sullivan has a similar view, suggesting that Google, as well as Yahoo, should reveal the amounts it pays out in refunds for fraudulent clicks.
Loren Baker from Search Engine Journal points out in the comments that, even if click fraud is lower than 2%, that represents $50 million of click fraud in Q3 2006 alone.