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Tuesday, August 09, 2005

A $400,000 click fraud loss

Inc. Magazine's web site is featuring a click fraud story where Kevin Steele, co-owner of Karaoke Star, a Phoenix retailer of karaoke equipment estimates that click fraud from a competitors has cost him nearly $400,000.

He normally spends $2,000 to make $6,000 in PPC advertising, when it started costing him $2,000 to make $3,000 he started getting suspicious. He got lucky and a supposedly an ex-employee of the competitor in question sent them a film showing an automated hitbot in use that was clicking Steele's PPC ads. Is this ex-employee a whistleblower or have they just cooked up a home video to get back at a former employer?

Steele has gotten all lawyerd' up and is now intending to sue the competitor in question AND Google and Overture. Why?

Because Google and Overture make the most money from click fraud and have the least amount of incentive for taking simple precautions to prevent the fraud

Well I would be upset to if I had been through the loss that Steele was through only to have the PPC networks get tight lipped on you...and this is your advertising 'partner'. Here is what happened straight from the article:

The problem is, getting a search engine to hand over a record of your advertising activity is no easy feat. Search engines treat such data as proprietary and are loath to share it. Karaoke Star’s Steele and Frerick, for example, expressed their suspicions to Overture and were given some 'token' refunds, Steele says. But Overture steadfastly refused to tell them who was behind the bogus clicks. Nor would it give Karaoke Star the data it needed to figure it out itself.

Full story: So Many Clicks, So Few Sales

Google sued over claims of excess advertising fees


Doesn't it seem like there's more bad news for Google these days than good news?

While the stock price for GOOG is iron plated and insulated with billions of dollars how long before there's a crack in the iron plating? These lawsuits could undermine the basic Google philosophy "We aren't like those other guys on Wall St. - we're out to cure cancer and bring about peace in the Middle East one search at a time."

I don't think Google can settle these lawsuits out of court, they need to protect their face and, because of their ideology, cant afford to with out undermining their beyond good guy image. Its all or nothing. It doesn't help that now ontop of click fraud conspiracy allegations, downplaying SEC documents of the threat and significance of click fraud by their own CFO that now its alleged that Google is ignoring advertisers set budgets and over charging them.

Of course these have all been rubber stamped with the comment:

"The claims are without merit and we will defend against it vigorously"

They have no choice but to defend them vigorously with a stock price of over $290 is at stake.

Full story: Google sued over claims of excess advertising fees

Monday, August 08, 2005

Google AdSense Fraud - How To Protect Your PPC Account

Aamir Farrukh has written an interesting piece on the different types of click fraud methods fraudsters can use. While his piece indicates that there may be only one main possible means of getting away from click fraud I would estimate that each method is a degree. Undoubtedly the Fraudster Maestro (aka Satan's Spawn) is the long term most successful of the bunch and one of the hardest to detect.

One way you could spot this type of fraud is to see if your conversions start dropping. It may start subtly at first but it should have a growth curve as the Fraudster Maestro's goal is to keep growing their profits from month to month. Greed on their part is their weakness and the growth of their greed will diminish your conversion and raise your cost-per-acquisition.

Full story: Google AdSense Fraud - How To Protect Your PPC Account

Yahoo Provides API To Analytics Firms

Well I almost got excited.

Yahoo! has decided to let advertisers SEND them information about their campaigns through an API...provided your a WebTrends, WebSideStory, Coremetrics or Omniture customer.

Well, that's nice but what advertisers need is information flowing FROM the PPC networks. So basically the information on what's begin down protect your online advertising investment is still non-existent.

Of interesting note is the comment that Bryan Eisenberg, Chairman of the Web Analytics Association said in a statement:

It's a common misperception that search engines have all of the information necessary to identify all unwanted clicks. The fact is, advertisers possess information in their web analytics data that is proprietary to their business and can help engines detect questionable traffic

What rock did Bryan crawl out from under? That is the opposite of what the PPC networks are saying. I have received emails and form letters from both Yahoo! and Google going into to detail of how exhaustive their processes are for finding click fraud and how many PhDs with large craniums they have on staff. Either Bryan is blowing smoke or the PPC networks are, well its probably both.


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