Here’s the situation: on the one hand you have your customers, insisting that there is a problem and that you do something about it. On the other hand, you have your engineers, insisting there is not a problem. Further complicating the issue is that your customers, unsatisfied with your insistence that their concerns are, in fact, not a concern, have gone and hired third party firms who then validate their concerns (and turn click fraud detection into yet another industry – see the ads on here). Then, of course, the press whips those concerns into a major frenzy, threatening your $100+billion market cap.
And all of this is due to one thing: you aren’t willing to show your cards as to why you believe your customers concerns are invalid in the first place. Doing so would dull the edge of competitive differentiation that made your product what it is in the first place.
This is the situation in which Google finds itself right now with its AdSense advertisers. It’s not a pretty place to be. So to dampen the criticism, Google has responded with a 17 page white paper attacking the methodology third party click fraud reporting firms use. They’ll have to walk a fine line here.
Titled “How Fictitious Clicks Occur in Third-Party Click Fraud Audit Reports,” the paper sets out to set the record straight.
“We have seen numerous reports of click fraud estimates which we believe significantly overestimate the impact on advertisers,” the report states in its background section. “The most fundamental flaw that we have seen in these reports is the existence of fictitious clicks: events which are reported as fraudulent but do not appear within Google’s logs as AdWords clicks. This report identifies the root causes behind these fictitious clicks and illustrates the extent to which this flaw impacts click fraud estimates from these firms.”
I am still reading this report, and was given a 9 am publishing embargo, so I’m going to go ahead and upload the document here, and let you all read it with me. I’ll be back with more thoughts as they occur to me, or please, add yours to this thread.
Update: Wow, the document reads far more combative than I thought it would. It’s more of an indictment of the nascent click fraud detection industry, and three firms in particular are called out. To wit:
We have been aware of the presence of fictitious clicks in third-party reports for some time. We have given feedback to advertisers (and indirectly, to some of these third-party auditing firms) and pointed out the various flaws weíve observed in their reports, but have met with little in the way of a positive response or interest in correcting their methodologies. They maintained that their click fraud detection methodologies differed from ours, and that fact alone accounted for any differences. ….
We discovered some basic engineering and accounting issues across the industry – problems which were in fact completely separate from the issue of accurate click fraud detection – which have in each case led to dramatic overestimation of click fraud rates by these firms. As an example, a single AdWords click may appear as five events in some reports, leading to (a) the identification of these events as “click fraud”, and (b) the reporting of five fraudulent clicks. …
Appendix B presents detailed case studies for three firms:
ClickFacts, Click Forensics, and AdWatcher. Click fraud estimates from ClickFacts and Click Forensics have
received widespread media coverage. And among third-party auditing reports submitted to us by advertisers, reports from AdWatcher are the most common.
All three cases studies exhibit the problem of severe click inflation in their reports primarily due to the presence of fictitious clicks, which generally render their published estimates on click fraud invalid.
I am still grokking this, I’m not a fraud detection expert. Watch SEW for more, I’d wager. Also, here is Google’s post on the report.
And lastly, coverage from SEW from Publishing 2.0. Sounds like there were fireworks on stage, so sorry to be missing the conference…