GoodGoogle? No, BadGoogle

To paraphrase Winston Churchill's famous quote on democracy: Cost per Click (CPC) is the worst form of advertising, except for all of the others that have been tried.

CPC is a beautiful concept- instead of merely paying for impressions (as in the traditional CPM model), advertisers are paying for performance based on how many times people click on their ads. Advertisers can easily track campaign performance, optimize on the fly, and sleep soundly knowing that they won't exceed their marketing budget.

However, anytime there is a great idea worth billions of dollars, unscrupulous types will try to game the system. In the CPC market, the leading form of misconduct is known as click fraud.

One recent example of click fraud involves GoodGoogle, a hacker (or group of hackers) based in Russia who trolls online forums offering to make competitors' Google ads disappear. GoodGoogle achieves this by using a botnet (computers that have been hjacked to repeatedly perform simple actions, like clicking an ad), as well as advanced algorithms to enable the individual bots to fly under Google's anti-fraud radar.

GoodGoogle directs the bots at advertisements targeted by its client, repeatedly clicking on the ads. With Google AdWords, an advertiser specifies how much it will pay per click for a given keyword, as well as a total budget. Once that advertiser's budget is met, Google will begin displaying ads from the second highest-bidder. Hence, by rapidly exhausting the #1 bidder's AdWords budget, the #2 bidder can gain the top spot while paying a lower price.

Even after paying GoodGoogle its fee (in the form of BitCoin or other cryptocurrencies), a shady advertiser can lower their overall campaign cost with these tactics. It's a fair assumption that a number of people have done this, since the service has been around since 2011.

At the time of writing,it is unclear whether GoodGoogle still exists (the reference article is from ~six months ago)- but if it does, I can't imagine it will exist much longer. GoodGoogle has several Gmail addresses linked, and even advertised its services on YouTube, so Google should be able to identify and pursue the perpetrator(s). Further, the onus is on Google to preserve the integrity of the AdWords platform- if advertisers don't trust that the clicks they are paying for are legitimate, the CPC model will collapse.


Sources: http://pando.com/2014/07/25/meet-the-russian-hacker-that-helps-advertisers-defraud-their-adwords-competitors/

http://www.google.com/ads/adtrafficquality/

Click Fraud Is On The Rise

A day after Professor Kagan discussed the relative significance of click fraud as a "dark side" of the PPC ad revenue model, the New York Times published an article heralding the increase in click fraud as the global economy has entered a tough recession. Although click fraud is broken into two categories -- bad clicks to make money and bad clicks to raise a competitors marketing expense -- the latter is most likely an insignificant portion of the total problem. The real issue is criminal organizations -- often foreign -- that create websites (aka link farms), join the Google Content Network (aka AdSense), place "relevant" text ads on their sites and then hire low cost workers to click on those ads. As a participant in the AdSense program, each click gives part of the PPC to Google (about 25%) and the remainder to the website publisher.

While Google historically promotes itself as a champion of click-fraud detection its most prominent detractor is Click Forensics, a click fraud detection business which asserts that the problem has increased dramatically. The company has concluded that 17% of all online ad clicks were fraudulent in 4Q08 and according to Outsell Inc., an information industry research group, 13% of total online ad clicks were fraudulent in 2008. That assessment is in stark contrast to Google's claim that "fraudulent clicks account for just .02% of all online activity."

Bottom line is that there are many ways in which the magnitude of click fraud can be manipulated. If you're Google you want to massage the figures to demonstrate its insignificance and if you're Click Forensics you want to hype up the idea that companies need to hire you to reduce their fraudulently spent marketing dollars. In the end it is incumbent on advertisers to carefully monitor how their ads are being placed within the AdSense network and make changes to their program criteria based on the data. If Click Forensics can help, then that may just be another cost of doing business.