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Clicking hell: the Google way to bankrupt your rival
January 20, 2006
Page 1 of 2
Advertisers on the internet's most popular search engine can face devious opposition, writes Charles Miller.
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JOHN Carreras was once a contented Google advertiser. He used text advertisements that appeared alongside searches to bring people to his trade exhibition website. He happily paid Google a few cents for every referral, believing that anyone who clicked through to his site from Google was a likely customer. But then he attended a conference in Las Vegas, and he noticed something strange: the number of Google referrals he was getting dropped dramatically, only to rise again once the conference was over.
Carreras became convinced the "missing clicks" weren't from customers but from his competitors, who had been in Vegas with him. He believed his unscrupulous rivals whiled away their office hours clicking on his Google ads, knowing that every tap cost him money.
If you add in a second kind of scam, where people earn themselves a little money from Google by <- snipped -> they're hosting on their sites, you can see the potential for malice. Click fraud, as it's called, is acknowledged by Google as a problem: last year, Google's chief financial officer, George Reyes, described it as "the biggest threat to the internet economy".
While Google Labs, as the company calls its development division, turns out new products at a cracking pace, Google remains largely dependent on just one source of income: advertising. Google would never admit to being uneasy about that reliance. Why should it? Advertising is doubling the company's revenue every year, and is expected to generate almost $10 billion this year. But for all the undoubted strengths of its pay-per-click system, some worrying vulnerabilities have emerged.
Marissa Mayer, the company's vice-president of search products, is reassuring. She calls it "a serious problem for us, but also a very solvable problem".
In principle, the company will not charge its advertisers for clicks that aren't from genuine potential customers. Typically, Google is hoping to use technology to detect suspicious click patterns.
Which brings us back to Carreras. As a result of his experience, he got out of the trade exhibition business, believing that click-fraud detection would be a more lucrative field. He now sells software under the name Who's Clicking Who? that promises to solve click fraud for Google advertisers, first by sending "we know who you are" messages back to fraudulent clickers, and then by compiling click dossiers to help fraud victims reclaim their money from Google.
For the company, click fraud has the potential to become the kind of technological arms race that has been a drag on Microsoft in its battle against ever-changing security threats. Nobody knows the exact extent of it. But, says Google-watcher John Battelle, "right now, advertisers are getting such a good return on their investment that it doesn't matter to them whether [click fraud] is 5 per cent or 30 per cent". But he believes that as Google advertising becomes more competitive and the level of fraud grows, "eventually the rubber will meet the road and we'll see how much fraud there is in the system".
}January 20, 2006
Page 1 of 2
Advertisers on the internet's most popular search engine can face devious opposition, writes Charles Miller.
AdvertisementAdvertisement
JOHN Carreras was once a contented Google advertiser. He used text advertisements that appeared alongside searches to bring people to his trade exhibition website. He happily paid Google a few cents for every referral, believing that anyone who clicked through to his site from Google was a likely customer. But then he attended a conference in Las Vegas, and he noticed something strange: the number of Google referrals he was getting dropped dramatically, only to rise again once the conference was over.
Carreras became convinced the "missing clicks" weren't from customers but from his competitors, who had been in Vegas with him. He believed his unscrupulous rivals whiled away their office hours clicking on his Google ads, knowing that every tap cost him money.
If you add in a second kind of scam, where people earn themselves a little money from Google by <- snipped -> they're hosting on their sites, you can see the potential for malice. Click fraud, as it's called, is acknowledged by Google as a problem: last year, Google's chief financial officer, George Reyes, described it as "the biggest threat to the internet economy".
While Google Labs, as the company calls its development division, turns out new products at a cracking pace, Google remains largely dependent on just one source of income: advertising. Google would never admit to being uneasy about that reliance. Why should it? Advertising is doubling the company's revenue every year, and is expected to generate almost $10 billion this year. But for all the undoubted strengths of its pay-per-click system, some worrying vulnerabilities have emerged.
Marissa Mayer, the company's vice-president of search products, is reassuring. She calls it "a serious problem for us, but also a very solvable problem".
In principle, the company will not charge its advertisers for clicks that aren't from genuine potential customers. Typically, Google is hoping to use technology to detect suspicious click patterns.
Which brings us back to Carreras. As a result of his experience, he got out of the trade exhibition business, believing that click-fraud detection would be a more lucrative field. He now sells software under the name Who's Clicking Who? that promises to solve click fraud for Google advertisers, first by sending "we know who you are" messages back to fraudulent clickers, and then by compiling click dossiers to help fraud victims reclaim their money from Google.
For the company, click fraud has the potential to become the kind of technological arms race that has been a drag on Microsoft in its battle against ever-changing security threats. Nobody knows the exact extent of it. But, says Google-watcher John Battelle, "right now, advertisers are getting such a good return on their investment that it doesn't matter to them whether [click fraud] is 5 per cent or 30 per cent". But he believes that as Google advertising becomes more competitive and the level of fraud grows, "eventually the rubber will meet the road and we'll see how much fraud there is in the system".
