Google listed click fraud as one of the potential “worries” that would-be investors should consider. In fact, they admitted to regularly paying refunds because of click fraud and stated that they may have to make retroactive payments.

Read more about click fraud in WebProWorld.

Google Getting Bitten by False Teeth…

Michael Bradley recently tried to pressure Google into paying $100,000 for his click fraud software, and though he was arrested by the FBI, his attempted extortion points to the weakness of pay per click advertising.

Click fraud remains a major topic among forums, and I imagine it will become a more mainstream topic in more mainstream media as people begin to inspect what’s affecting Google’s revenue.

The SEORoundTable blog linked to a recent thread in the IHelpYou forums called “fraudulent clicks today.” Barry named his post “Click Fraud: Pros and Cons” so I clicked through, wondering what the possible pros of click fraud could be from the marketers perspective (from any perspective, really – fraud hurts the ppc vendors in the long term).

AndyJ, a member of the IHelpYou forum, pointed out that “clicking on your ad boosts the click through rate. A higher CTR equals a higher position for less cost in many cases.”

I was surprised to read the number of people who consider fraud just a cost of buying PPC advertising – it seemed that many some who posted were resigned to paying more money for fewer real clicks.

AndyJ said, “Any of us that use AdWords or any other PPC has to pay for a certain percentage of fraudulent clicks. I factor it in as a cost of doing business.”

How long will ad buyers be willing to pay the extra cost? As long, apparently, as ppc still delivers value. The issue as I see it though is that buyers still don’t receive what they paid for.

The thread, later joined by a second tier ppc vendor who bashes Google ppc, decends into mild though interesting bickering as members rise to defend Google, but some members do voice some interesting points.

Junior Harris alluded to click fraud software in his post, and included a dishearteningreminder: “there are some pretty creative hacks out there auto generating everything from UA, referrals, and possibly IP addresses as well. The key to remember is not to spend more than you can afford to give away.”

WebmasterT pointed out that “itemized clicks would provide transparent and easy detection of fraud.” He then asked why, if Google can provide this information to AdSense partners why can’t they provide that same transparency to people who are paying for ads.

Regarding Google refunds from verified instances of click fraud, AndyJ said, “I have had 2 occasions in the past to report a gross fraud such as yours. After supplying the AdWords team with the required information, they did in fact resolve the problem and issue a refund within about 4 weeks.”

There’s a click fraud thread at JimWorld, however, that tells a slightly different story. One webmaster lost thousands through alleged AdWords click fraud and it took months of continued effort to get a refund. The thread runs from 9-29-03 through 11-15-03 (when he finally got his refund) but he alleges the fraud occurred three months before his first post.

Another click fraud thread at WebMasterWorld mentions fraudulent clicks coming from proxy servers in India.

Pierre Zarokian, President of SubmitExpress.com, offers the following advice for pay per click advertisers: