Google’s latest evil, Advertising Fraud

I previously posted here about google and the litany of questionable decisions and actions that Google has been part and parcel to over the years.

Graphic courtesy of The Consumerist

Google has been criticized for installing “cookies”; for offering a reverse-lookup phone directory that can be used to find a person’s address; for filtering out too much or too little pornographic content with its “SafeSearch” feature; for hurting small companies by ranking search results according to popularity and for altering the calculations of rankings; for scanning and digitally indexing copyrighted library books without asking the permission of copyright holders; the initial public offering had such a complicated auction system that only big investors had the wherewithal to figure it out.

But censoring its own services for consumption in China may be Google’s greatest Achilles Heel. Even though Yahoo, Microsoft, etc. have all done China deals, Google is the company with the “Don’t be Evil” mantra. So they end up looking like the biggest hypocrites.

But this news makes all of the above pale in comparison.

Click fraud concerns hound Google

…independent studies assert that anywhere from $100 to $400 of every $1,000 (spend on advertising by clients) stems from click fraud. If those estimates prove correct, Google might be on the hook for $1 billion to $5 billion in advertising refunds.

Click fraud takes different shapes, but the end result is usually the same: Merchants are billed for fruitless traffic generated by scam artists and mischief makers who repeatedly click on an advertiser’s Web link with no intention of buying anything.

…Google’s [settlement] offer works out to a $4.50 refund on every $1,000 spent in its vast advertising network over the past 4\ years.

That works out to between ten and forty percent of Google advertising revenue which as it turns out, stems directly from fraud. And Google seemingly has no intention of paying any significant amount of the stolen proceeds back to the advertisers who signed agreements with Google in good faith.

How much of Google’s overall revenue was made fraudulently?

No one knows.

And Google isn’t saying.

After reviewing [an advertisers] evidence, Google said its internal safeguards had spotted the suspicious activity as it occurred and never billed for fraudulent clicks. But [the advertisers] said the search engine didn’t provide him with any data to back up its findings in an e-mail signed simply by “Ray” from Google’s click quality team.

My question is how much of what Google is calling “click fraud” is actually just plain old fraud perpetrated by Google just simply over billing advertisers?

No matter what, Google will never pay back the fraudulent gains to the advertisers. Nor will they offer advertising credits or any other reasonable compensation, because they simply don’t have to.

More detail about Click Fraud can be found here at The Consumerist

Alan Chapell thinks he may have a Click Fraud Solution

Google is not alone, Yahoo Hit With Second Spyware Click-Fraud Suit