Google opens click-fraud Web site

Issue is a threat to the company's pay-per-click advertising

Google Inc. has unveiled a Web site "resource center" focused on the thorny issue of click fraud, which many consider a potential threat to the company's main source of revenue: pay-per-click advertising.

Google developed the new Ad Traffic Quality Resource Center to give its advertisers a single place to find Google's information about click fraud, said Shuman Ghosemajumder, business product manager for trust and safety at Google, on Friday.

In the pay-per-click format, advertisers pay every time someone clicks on their ads, which are linked to a Web page. Click fraud happens when companies click on competitors' ads to drive up their ad spending. Another common click-fraud practice is for Web publishers to click on their sites' ads to increase their commissions.

With some organizations estimating click-fraud incidents at more than 30%, Google has gone on the offensive in researching the issue and stating publicly what it is doing and the extent of the problem in its own ad network.

For example, Google proactively monitors its network for what it calls invalid clicks, which include not only malicious clicks but also innocent practices that may look like click fraud, such as clicking on an ad twice.

It has concluded that less than 10% of clicks on Google ads are invalid, and that only 0.02% are declared invalid as a result of advertisers' complaints.

Along the way, Google has locked horns at times with companies that provide click-fraud monitoring and measurement services, questioning the validity and thoroughness of their methodologies.

The resource center is the latest in a series of click-fraud tools Google has been making available to its advertisers.

Originally scheduled for March, the resource center's debut was delayed as a result of shifting priorities within the group in charge of click fraud, Ghosemajumder said.

For example, the group decided to prioritize organizing a click-fraud forum for Google advertisers that was held at the company's Mountain View, Calif., headquarters in May, he said. A similar event will be held later this month in Google's New York offices, he said.

Already in place is a service called IP Filtering, which lets advertisers "blacklist" certain Internet Protocol addresses for suspicion of click fraud or simply because their clicks never lead to a sale, he said.

In mid-2006, Google began reporting to advertisers the number of invalid clicks to their campaigns, as well as what percentage they comprise of all clicks.

Google plans to beef up these reports with the amount of money Google didn't bill advertisers by detecting and discarding invalid clicks. This was also slated originally for March.

Click fraud has led advertisers to sue Google, Yahoo Inc. and other providers of pay-per-click ads. Google reached a landmark settlement of a click-fraud class-action lawsuit last year that many described as a big victory for the company. A loss could have cost the company hundreds of millions of dollars, but Google managed to settle the case for $90 million.

As part of the deal, all but several hundred Google advertisers forfeited their right to sue the company over click-fraud instances dating back to 2002.

The settlement also allowed Google, which admitted to no wrongdoing or liability, to pay a third of the settlement in cash -- all for plaintiffs' attorney fees -- with the rest taking the form of credits for advertisers.

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