
Google Issuing Refunds to Advertisers Over Fake Traffic, Plans New Safeguard - nkurz
https://www.wsj.com/articles/google-issuing-refunds-to-advertisers-over-fake-traffic-plans-new-safeguard-1503675395
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sharkweek
Pardon my rudimentary understanding here, but I sort of assumed in such a wide
scale auction, pricing would reflect acceptance of a certain level of fraud,
and that the price would balance out at a point where these fake clicks were
part of the equation.

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tonyedgecombe
Judging by my competitor's bids I don't think many advertisers have an
'equation'.

~~~
ssharp
Never underestimate the amount of dumb money in advertising.

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redm
A few honest questions for anyone who's an ad buyer for mixed media: I've
wondered how advertisers look at broadcast advertising compared to digital.
For one there's no direct correlation (as in a click) with broadcast
television. There's also no direct accounting of who actually saw it, just a
best guess based on Neilson numbers. It seems to me that DVR's are akin to ad
blockers as well. Why is digital so conversation obsessed (clicks/purchases)
and not focused as much on the branding values (CPM)? Is broadcast advertising
so much cheaper than digital that it makes sense to just blanket ads and hope
for the best?

~~~
throwaway284728
I work at a major advertiser who's media budgets measure in the billion dollar
zone.

> I've wondered how advertisers look at broadcast advertising compared to
> digital.

At our levels of spend, we build econometric models to understand media spend
effectiveness and spend a fair bit on tracking and vetting the methodologies
of trackers.

> For one there's no direct correlation (as in a click) with broadcast
> television.

Correct. Frankly, we're interested in valid human viewable reach, not clicks.
Not even Impressions though most our buys are CPM today and we want to buy
viewable CPMs. We use in fraud detection providers and generally don't pay for
Impressions detected as fraud.

> Is broadcast advertising so much cheaper than digital that it makes sense to
> just blanket ads and hope for the best?

In many cases yes... In some cases no - especially when there are demographics
who simply don't watch much TV which is increasingly a reality. At our scale,
digital - even the biggies struggle to give us reach affordably.

~~~
shostack
Fellow senior buy side guy. Used to work at a top search agency and am now
client side.

This is the correct answer. At that scale focus groups, surveys, econometric
modeling, etc. are what determine success. The harder part is for mid size
advertisers who don't have the budget to move the needle to make those things
viable, but still need to be branding heavy.

Beyond that, digital is way more trackable and often more efficient as a
result, even on the branding side.

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madars
In related news, certain subreddits have been promoting the use of
[https://adnauseam.io/](https://adnauseam.io/), a fork of uBlock origin that
automatically clicks all the ads encountered. The same redditors also
encourage searching for high-CPC terms (e.g. insurance or rare medical
conditions) to maximize the impact.

~~~
shubhamjain
It's hard to understand the level of _schadenfreude_ that warrants use of
AdNauseam. Ads can be hated. That's all right. But, why would anyone be so
hell bent on depleting advertisers budget. What if the advertiser is not a
rich company but a small business. How acceptable it's to destroy the
potential value of her budget?

Of course, Google might already be detecting it, but the intent of AdNeuseam
seems nothing but despicable.

~~~
convery
Or for the contentcreators, think Youtube, their CPM going from 2$ to 0.5$
just because people dislike Google seems a little cruel.

~~~
_pmf_
The cynic in me: Oh, no, my daughter will have less 2h videos of people
unwrapping Kinder surprise eggs to watch; a cultural loss.

~~~
radicalbyte
Killer feature! Does Adnauseum work on iPad? :)

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narrator
I always thought it was funny that Google's billion dollar revenue model
essentially relies on a trusted client.

~~~
z3t4
I wonder what will happen when the Google revenue is threatened, we'll
probably see something like ad DRM

~~~
throwaway2048
So about Google AMP...

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camus2
A big chunk of "google's ad traffic" is fake and always has been. It's hard to
quantify though, it's up to each business to evaluate whether paying for ads
on google makes sense.

[http://adland.tv/adnews/googles-ad-traffic-news-
fake/2940245...](http://adland.tv/adnews/googles-ad-traffic-news-
fake/294024572)

Personally I don't think it does.

~~~
vosper
When you're on the inside the fake traffic is not so hard to quantify. Problem
is that if you've taken the time to quantify it then your staff might start
feeling obligated to do something about it. Like talking to customers.
Ignorance, as they say, is bliss.

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osrec
I am finding Google adverts less and less effective for an e-commerce business
my parents run. I think it may be because consumers are getting better at
ignoring the ad-noise on the web, and this is potentially quite worrying for
Google and other ad based businesses. It's not beyond the realms of
imagination that this fake traffic could be an attempt re-bolster their main
revenue stream, and they've been caught out by their customers!

~~~
remline
> It's not beyond the realms of imagination that this fake traffic could be an
> attempt re-bolster their main revenue stream

It basically is beyond imagination unless you think they have a new income
plan that just needs one more quarter. Google's long-term value is in the
conversion rates of long-term advertisers: drop conversions in half with fake
traffic and next month they are going to offer you less than half the bid or
nothing if they have high site costs per visitor. I.e. licensed booking
listings.

Probably partners that share immediate revenue with Google but are less
invested/secure in their portion of the long term value of that stream are
behind it.

~~~
osrec
I don't disagree with your comment, however, I am often surprised by the
short-termism demonstrated by executives. It may not be Google's strategy, but
I am sure they are well aware of it happening, and in that sense it feels like
a lie of omission. Apologies if I sound cynical, but I would guess that a
company that has been running an ad platform for the past 17 years clearly
knows the difference between authentic and fake traffic.

~~~
remline
It is a certainty that some traffic is fake.. In this case it is doubleclick
on websites and (from the commission numbers) probably over other ad networks,
so Google has one connection's header and a few ms to triage the traffic. But
the anomalies there are probably not so different than if I setup an open
proxy and invite real people to use it.

Being cynical makes sense, but then it is actually more likely that Google has
been generating fake traffic on fb than fake traffic for itself and vice
versa. FB spent years being irrelevant to much of the market while getting a
lot of money from less savvy advertisers for bot networks. I don't think the
short-term revenue was worth it to them and I would be surprised if their exec
bonuses weren't mostly hurt by missing targets and losing big advertisers.

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tannhaeuser
Clickfraud has been a problem for as long as online ads exist. Its
widespreadness has caused ad revenues to decline to the point of non-
profitability years ago, and many web media outfits to close shop. On what
basis should customers be refunded without actual, objectively measured
clickstream data? This piece feels like a media campaign to make AdSense
appear as premium service over alternatives to me.

The point is that, without incentives for quality content creation, there
aren't that many web resources worth searching anymore. Have you checked your
web usage recently? Do you actually go to Google search for your daily web
consumption? Or could your search needs be fulfilled by, say, better
StackExchange search?

Google is struggling to keep growth as ad revenues go to more evil companies
such as Facebook, as their AMP project shows.

~~~
bartread
That's an interesting point and I suppose the answer is _maybe_ but what I've
found is that the best, or certainly the easiest, way of searching
StackExchange is Google.

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drewmol
I agree, but wonder if it's mostly habit(been using that single search box for
over ten years, and I'm reluctant to add one more click/step to the process
when I can just press enter right now and then filter through the results
page). I still have to remind myself to use the !bang function of DDG even
though it's often a faster, more direct path to the results I want. For me,
only after it slowly becomes habit does it truly feel easier

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machtesh
While the article talks about Adsense fraud, there's a ton of fraud happening
on Adwords as well like competitors or bots that click on your ads to deplete
your ad budget. Google provides refunds for some of those fraudulent clicks as
well.

I'm a developer at [https://www.clickcease.com/](https://www.clickcease.com/)
a company that's been fighting click fraud for the past few years. If you're
affected by click fraud, we can detect fraudulent ad clicks and automatically
file refund claims with Google.

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runeks
I find this really interesting. We’re all familiar with exploiting vulnerable
software, but this appears to be exploiting a vulnerable business model.

Does this attack work with Facebook as well? I think the difference in client
authentication might prevent this attack on Facebook (just ban accounts that
click too many ads). But, on the other hand, Google might be able to use IP-
addresses to accomplish the same.

Taking it to the next (morally questionable) level would be a virus that
infects regular consumer devices, and delivers fake clicks from seemingly
honest clients.

~~~
paulgb
> a virus that infects regular consumer devices, and delivers fake clicks from
> seemingly honest clients.

Click fraud has been one of the ways to profit from a botnet of virus-infected
computers for years.

~~~
runeks
That should be relatively easy to detect, since the actors must have an
account with Google, through which they receive payments for ad clicks. Google
would just have to find a copy of the malware, and see which accounts the
clicks are targeted at.

What I’m talking about would be impossible to detect, since it just amounts to
regular users clicking regular ads. But it would also be more challenging to
profit from, so it would amount to sabotage more than a profit scheme, unless
somehow coupled with short-selling Google stock (a bit more far-fetched,
admittedly).

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Rjevski
Couldn't have happened to a nicer industry. :)

Just imagine for a second the total human time lost due to ads and all the
productivity that could've been done in that time.

~~~
qq66
For a different perspective, I had a business software product for a
particular targeted use case that could ONLY find customers through targeted
ads, particularly on Google. The company could have not existed without Google
ads and the customers would have not solved their problem without Google ads.

~~~
nindalf
Nike, P&G and Apple will get by if they can no longer advertise because
they're firmly entrenched in people's minds. But if you're starting a
competitor, or any new business really, I don't know how you'd find customers
without ads. If someone's saying "just use product hunt" or some other website
dedicated to new products, they should remember that the vast majority of new
businesses are small, local ones - barbershops, florists, massage parlours
etc, not tech startups that will eat the world.

It doesn't necessarily need to be targeted web ads, I suppose you could use
newspaper ads, or TV or physical letters, or spam email. Any of these work,
but I think a new business would probably get the most bang for buck by
targeting.

~~~
cobookman
Well that and product Hunt is basically a listing of ads

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cat199
Good to see this -

I've often questioned the somewhat symbiotic nature of scam sites and googles
ad revenue - if things were _too_ easy to find, there would be less need for
ads in the first place..

Not that the simple existence of such a program precludes this.. they could
just be using it to tune the equation when the sides get out of balance..

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RichardHeart
Google, I'll take my refund for childrens foreign language learn your ABC's
and Peppa pig traffic anytime you like. Or reimburse for hours wasted on phone
to your Indian call center.

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fatjokes
People just want free stuff. Google did introduce a program (Contributor)
which would allow users to pay to fund their content creators without seeing
ads. Last I heard that program was not doing well.

~~~
revelation
Patreon is doing very well I believe.

~~~
mcbits
Patreon itself seems to be going strong, but I've only seen a handful of users
making anything close to a livable income, and I check out profiles almost
every time someone plugs theirs. Usually it's a laughably small amount. The
successful users are popular enough to make still an order of magnitude more
with ads, sponsorships, etc. I love the model and hope it keeps growing, but
it's not there yet.

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cyphar
Despite what your opinion might be on the ethics and justifications of the
people involved, I find it quite concerning that they're being painted as "ad
fraudsters". This sounds like the same Orwellian re-definition of words as
"piracy". There is no implicit or explicit, social or legal contract that says
if I click an ad that I must then purchase the product. Nor is there any
agreement that if I click an ad that I have to be interested in the product.
So you couldn't really argue it's deception. And most importantly, I have no
financial gain from doing it (EDIT: assuming that I'm not the person who is
making money from the ads). The term "fraud" is an intentional misuse of the
word to frame the conversation in a way that is quite deceptive.

Is exploiting a flaw in the existing CPC advertising system "fraud"? No. Is it
unethical? Possibly, depending on what your view is on the justification. You
could argue that devaluing the worth of tracking-based advertising is trying
to do a net good, and that it might counteract Google's attempts to become a
monopoly in online advertising. But you could also argue it's going to ruin
small businesses that rely on advertising as a significant part of their
income.

~~~
elorant
It's called fraud because it's systemized. An individual accidentally clicking
on an ad, or clicking on an ad without been actually interested in a product
is far from suspicious, we've all done it and we'll do it again. But that's
not what this is about.

Say you have a couple of web sites and you've strapped AdSense on them. Income
is ok but nothing spectacular. One day you decide to go black-hat. So you
purchase a couple hundred static IPs or even better rent them from private
proxies. Then you set-up a bot that systematically clicks on your ads. If you
keep it low profile without becoming greedy it could run for years without
anyone taking notice.

Then some other day you become greedy. You realize that if you scale your
model it could bring you shitloads of money. So you build a malware and
distribute it to tens of thousands of PCs. Actually you don't even have to
write the code yourself, malware has been commoditized these days. So now you
have 100k PCs which means that you have tons of traffic. And since you only
have a handful of websites you commoditize the "business", offering ad
clickthroughs for money to various publishers. Run it for a couple of years
and you've become a millionaire. At this point of course eventually Google
will shut you down because they have a whole department of very smart people
who're monitoring these things. But nothing stops you from building other
sites or no sites at all if you drive all your traffic to third parties. And
let's not forget that AdSense isn't the only form of advertising. There are
ads based on mere impressions. Which means that all you have to do is drive
traffic to those sites.

This isn't a far-fetched scenario, it's already happening in unprecedented
scale. Estimates indicate that at least 30% of ad traffic is fraudulent. Take
a look at Methbot [1] for example. A botnet that was set-up to deliver fake
video traffic and netted more than $5M daily.

[1].
[https://www.forbes.com/sites/thomasbrewster/2016/12/20/methb...](https://www.forbes.com/sites/thomasbrewster/2016/12/20/methbot-
biggest-ad-fraud-busted/#73a825804899)

~~~
cat199
DING DING DING we have a winnner..

Not to mention bots to scrape other legitimate sites and recreate them only
with slightly reshuffled texts and a bazillion other ads and links to
legitimate and illegitimate other sites, paid spamming to spread your malware
and drive traffic into your network, spoof SEO and fake promotions by spam
commenting on websites, blogs, etc. I'm probably missing a few thousand other
things.

Worked in webhosting for a couple of years.. it was amazingly eyeopening to
contend with the fact that yes, people actually _make_ all of that junk
content that I do my best to ignore, and that there are reasons behind it...

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Operyl
Off topic, ish, but this is the first WSJ article I’ve looked at in a loooong
time that didn’t paywall me. Did they change their practices on that recently?

~~~
adventured
No, not all of their content gets paywalled. They treat different sections of
the site very differently.

For example, if you check the section the article belongs to (CMO Today):

[https://www.wsj.com/news/cmo-today](https://www.wsj.com/news/cmo-today)

you'll notice this particular article doesn't have a key next to it indicating
a paywall. CMO Today seems to be heavy on the non-paywalling, for whatever
reason.

~~~
Operyl
Huh, good to know. I guess I just managed to always look at their paywalled
content.

~~~
stephengillie
Content can't cost more than its advertising, or it's a loss. You're probably
attracted to more-valuable articles, which likely cost more than their ads
generate.

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James_Owens_69
That's what they get for censoring people on youtube and google I guess.

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nerd7473
Not compromised... But you know what I mean.... :/

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nerd7473
You'd hope that Google would be better at such... Oh well, everything is
compromised eventually.

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DinoDano
Google is shameful organisation. They are fake and liars!

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hi3980
Some of us tried to sound the alarm on fake traffic before Google IPO'd and
WSJ or some other major news source wrote about it at the time days before
their IPO, but no one cared at all. Everyone wanted Google to become the
greatest in history based on a business model that acknowledges fraud but
regards it as mere noise as opposed to mortal threat. Well, the whole point of
warning the public before their IPO was to prevent the giant economic disaster
that this can lead to. But Google was clever and managed to find a profitable
business with Android and maybe other streams of revenue. I wonder how this
will play out.

~~~
fakeads
You got the business part wrong. Google is like 88% ads. The rest is barely
profitable or run at a loss.

