Google Puts Clickfraud Rate At Under 2 Percent

Andy Beal over at MarketingPilgrim has a nice

article on how Google’s click fraud rate is less than two percent, at least
according to Google’s own figures. This is based off the "invalid" click rate
that Google gave him, which includes click fraud and clicks that aren’t actually
billed. I could have sworn that Google had given this type of invalid rate
before but can’t track that down — so that definitely seems new. The idea that
Google self-reports a click fraud rate far below that of some third party
estimates is definitely not. Here’s a dive into Andy’s article, along with some
other reports for context.

Andy talked with Google’s Shuman Ghosemajumder, business product manager for
trust & safety, about click fraud detection. Shuman explained that a chunk of
all clicks are considered "invalid" and not charged to advertisers. Indeed, back
in July, Google

made it possible (and also see
here)
for advertisers to see exactly the percentage of invalid clicks that Google was
screening.

Not all invalid clicks are fraudulent clicks. For example, someone "double
clicking" quickly on an ad would cause the second click to be deemed invalid,
and the advertiser wouldn’t (or shouldn’t) be billed (see
About
invalid clicks from Google for more on this). But some of those invalid
clicks are fraudulent, people trying to make money by clicking on things like
their own AdSense ads or trying to hurt competitors by clicking on their links.

A portion of fraudulent clicks are NOT caught by Google’s filtering. That’s a
known fact, given that Google itself issues refunds. What’s the percentage?
Google doesn’t say. Plenty have asked, such as when
I asked Google CEO
Eric Schmidt about it earlier this year:

Danny: Google must know the rate of click fraud that is escaping
[you], or have some real estimates, but we never see numbers. It’s fair to say
Yahoo! doesn’t give me a number either. Yahoo! will say "we’re better than
industry standards." And I’ll say "what are you at?" [And they say] "Well,
we’re better than industry standards."

Eric: Just so you know, last week we announced a program where our
advertisers can see our estimate of the click fraud rate. So that’s an
example, and hopefully a good response to your question. To the degree that
our systems can detect click fraud, which is a very serious problem, we detect
it. We believe we have it under control. We believe that that is getting
better. And so we’re trying to get advertisers more of a sense of how it’s
working within the limits of how our systems work.

Danny: That’s a great example, because on the one hand, that is more
transparent— but then what you don’t tell us is, here’s the total amount of
money that was spent, here’s the total amount of money we issued in refunds
for click fraud that got past our system. You do the math, that’s your rate.

Google

has said click fraud is in the single digits on average, so at worst, less
than 10 percent. That brings us to Andy’s post today. He was shown a chart
listing the various ways that invalid clicks are filtered, with bars in
proportion to the amount of invalid clicks detected. Looking at the small bar of
"requested investigations" — the percentage of invalid clicks investigated
because Google itself has not flagged them — he asked if this was in the one to
two percent range. Shuman wouldn’t give him a figure but did say Andy’s estimate
was either near those amounts or that they were less.

So to be clear, two percent of all clicks are investigated by Google as being
possibly fraudulent after billing has happened. Some amount of fraudulent
clicks, of course, are never reported. That will take the figure up. However,
some amount of the investigated clicks will be cleared of fraud, taking the
amount down.

Of course, instead of this guesswork, Google could really be transparent and
do exactly as suggested above — report how much money it pays out in refunds
for clicks deemed to be fraudulent. That would form the basis of a real,
self-reported rate from Google. By the way, Yahoo could do the same.

Yahoo made much play when

announcing its own clickfraud settlement that it was found to have a
clickfraud rate below the "industry estimates." These are estimates that I’m
fairly certain Yahoo had previously said were inflated. Google certainly has
said that. I asked Yahoo if they were found to be so good, why not just publish
their actual clickfraud rate. Like Google, they declined.

For more on the internals of click fraud at Google, see my past article
The Abridged
Version: Independent Report On Google’s Click Fraud Detection Practices,
which has an expert witness in the click fraud case that Google settled
examining the click fraud detection system over time, 47 pages of examination!

For the issue of why Google disagrees with higher estimates third party firms
have given, you can see this

post Google made back in August that took aim at some companies. Fair to
say, some of those companies don’t agree with Google. A
recent estimate
came out in October that prompted Google to state again that the reports were
"considerably" more than it sees internally.

Postscript: See also Revisiting Google’s 2 Percent Or Less Click Fraud Rate