
How Google defrauds Advertisers - tshtf
https://medium.com/@nesovok/investigating-fraudulent-clicks-in-google-adwords-f3c42da0ad62#.cmmf7cvok
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ariwilson
This title is complete click bait - Google is not defrauding advertisers (no
deceptive intent); bots / viruses / bad actors are.

The fraud mechanism is clicks on Google search ads which causes general
distrust in advertising and so it is in both Google and advertiser's interests
to block these clicks.

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goldfishcaura
Hi, I am the author. Yes, agree on the title. Thanks for keeping me honest.
Changed it to "Investigating..."

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vannevar
I don't doubt that click-fraud in Google advertising is common, maybe so
common that it represents the majority of clicks. But I also believe that
fraud causes a discount in the price over time. After all, very few people
really buy clicks; what they're buying, however indirectly, are conversions:
people that buy something, or sign up for their newsletter, or whatever. And
when they set an ad budget, they do so with an empirical idea of the
conversions/click, which will vary from context to context. Fraud drives down
conversions/click, which in turn drives down the amount of money one is
willing to spend on a click, which in turn reduces demand and drives down the
price/click of advertising.

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ksk
>Fraud drives down conversions/click, which in turn drives down the amount of
money one is willing to spend on a click, which in turn reduces demand and
drives down the price/click of advertising.

In an ideal world, yes, but it can also cause businesses to spend _more_ on
pointless things like redesigning their ads, buying more ads for other
keywords, etc. Then there is the fact of new businesses popping up as other
businesses cease to exist. Information asymmetry ensures that not everyone
knows about click-fraud, whether it is currently affecting them, how to avoid
it, etc. The real world is too messy.

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vannevar
As someone who lost a few hundred dollars several years ago to Google ad click
fraud, I agree. The market is not perfectly efficient, and people are still
hurt by friction as the price goes down.

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proofmaster
Just fyi, Google has massive resources devoted to detecting click fraud and
getting rid of it. But I agree with the author. While many Google’s engineers
and security professionals are focused on providing the most transparency
about click fraud, the majority of the company (its business people) have all
the incentives to reduce the appearance of click-fraud. If you were holding a
spreadsheet that showed how 90% of your budget for self-driving cars, google
glass, and other projects, is coming from a ponzi scheme, would you show it to
anyone?

