THE RKGBLOG

AdWords vs. AdSense Click Fraud — Why Do So Few Get It?

Everyone’s talking about clickfraud recently. John Battelle. Robert Cringley. Andrew Goodman. Heck, even Mark Cuban.

But not enough folks emphasize the key distinction: search click fraud vs. content click fraud. Follow the money. Content click fraud is the key issue.

Though not limited to Google, consider AdWords and AdSense. With 43% share, Google’s a reasonable proxy for the industry.

  AdWords Fraud AdSense Fraud
Harms Advertiser Advertiser
Benefits Google
Advertiser’s competition (a bit)
* * AdSense publisher * *
Google
Advertiser’s competiton (a bit)
Scaleable Inventory No Yes
Scaleable Fraud No Yes
“Death By 1000 cuts”
API

Consider AdWords fraud, where a person or robot clicks on a search result ad on Google or a syndication partner for the sole purpose of incurring the click charge.

Clearly, the advertiser is harmed. Who benefits? Well, Google makes a few cents. And the advertiser’s competitors gain slight benefit from the advertiser’s loss of a bit of their marketing budget. But both Google and any competitor of size have too much to lose and too little to gain by such mischief. There’s too much risk to build a clickbot or hire a firm to click fraudulently.
Besides, I believe that Google and major retailers act ethically.

Detecting bogus AdWords clicks is hard but possible, and I think Google does a good job detecting and purging them. And the AdWords click universe scales (relatively) slowly, driven by Google seizing market share, the increasing availability of broadband, and the growing adoption of search. The growth is limited to real people clicking on real search results. Clicks aren’t generated out of thin air. As a result, AdWords fraud scales slowly, both in relative and absolute terms.

In contrast, consider AdSense fraud, where a person or robot clicks on a context ad on an AdSense publisher site for the sole purpose of incurring the click charge.

As before, the advertiser is harmed. But who benefits? Again, Google makes a few cents. But more importantly, the publisher makes a few cents. And unlike AdWords fraud, AdSense fraud scales extremely well — the publisher can use scripts to create numerous sites easily (even more so now with the AdSense API). Across many many sites, a few cents here and there can add up to meaningful easy money. As the fraud can be spread across many AdSense accounts, it is much harder to detect, even with legions of PhDs. The AdSense click universe can grow quickly, driven by manufactured clicks on fake sites.

In general, I believe AdWords fraud rates are in the low single digits, and
AdSense fraud reaches as high as thirty percent.

From the retailer perspective, if the ads drive enough sales to meet target ROI, then the retailer should run those ads, search and/or content. The click fraud loss is just a cost of doing business. (Of course, an advertiser would be crazy to run search and content without distinguishing tracking.)

But one thing is sure: when analyzing click fraud, the search vs. content distinction is crucial.

Technorati Tags:

  • Alan Rimm-Kaufman
    Alan Rimm-Kaufman founded the Rimm-Kaufman Group...
  • Comments
    6 Responses to “AdWords vs. AdSense Click Fraud — Why Do So Few Get It?”
    1. Mattg says:

      Good article have lot of info.

    2. SirCommy says:

      Well said. I am running adwords but not adsense. I have been running adsense long time ago though. But when it comes to adwords, fraud clicks are on a much larger scale for the content ones. I chose my ad to display only on search and not on content or network partner sites. Those are the places where most fraud clicks are being done. For example, when I have content and partner sites turned ON, I was having over 10 clicks per 2 hours and no interested visitor. That’s because most earn from adsense when content ads are being clicked. So after I turned it off and left it for search only (sponsored ads on searches), I had few clicks, but real visitors and subscribers. The difference is huge. I am interested on the type of visitors that search specific terms and get my site, not intentionally displayed on I don’t know what type of sites.
      Good article.

    3. Adsense says:

      Yes your comments are spot on. I hate the possibility of fraud and hope I never get accused by accident. If someone hates you enough they can cause you some damage by clicking on your ads, even in Adsense or Adwords.
      Regards,
      Andy

    4. AdWords is a great marketing tool if what you sell is expensive and the profit margin is high. That’s why you see so many ads on loans, colleges, and medical care sites.

      For mom & pop type businesses, you’d need to do some careful analysis to be sure that you get value as an advertiser.

    Trackbacks
    Check out what others are saying...
    1. [...] coverage in the trades. We’ve looked carefully at this issue at RKG and feel the problem is largely limited to content advertising. But here’s a modest proposal for all search engines and shopping comparision engines: [...]

    2. [...] here at RKG have been, putting it politely, less than enthusiastic about running PPC ads on the content [...]