Click Fraud is 0.02%, Invalid Clicks 10%, $1B Lost To Click Fraud Yearly

Mar 1, 2007 • 7:56 am | comments (3) by twitter Google+ | Filed Under Google AdWords
 

google-invalid-clicks.pngGoogle came out and finally gave us some numbers.

0.02 Percent of Clicks Pass Through Google's Fraud Detector:

Our Click Quality team investigates every inquiry we receive from advertisers who believe they may have been affected by undetected click fraud. Many of these cases are misunderstandings, but in most cases where malicious activity is found, the clicks have already been filtered out (and not charged for) by our real-time filters. Because of the broad operation of our proactive detection, the relatively rare cases we find of advertisers being affected by undetected click fraud constitute less than 0.02% of all clicks.

Invalid Clicks Account For Less Than 10% Of All Clicks:

Our invalid clicks rate – the activity rate – has remained in the range of less than 10% of all clicks every quarter since we launched AdWords in 2002. At Google’s current revenue rate, every percentage point of invalid clicks we throw out represents over $100 million/year in potential revenue foregone.

So, in a sense, click fraud is costing the industry $1,000,000,000 ($1 billion) per year.

Danny has an excellent break down on all of this, so I won't get into why Google released it and how this all makes sense. It is worth a read, so check it out.

Currently we have threads at both WebmasterWorld and DigitalPoint Forums, with WebmasterWorld having discussion in it. Here are some quotes:

totally misleading. How many advertisers can analyze (or choose to) the data and take the issue up to google?

Those 10% invalid clicks are identified as such by Google and are not charged to advertisers. What they are saying is that maybe 0.02% of those clicks are invalid *and* charged to advertisers. That sounds like peanuts and as long as advertisers have a decent ROI, I don't see what's the big deal, as long as Google is diligent with banning fraudsters. No advertising medium is 100% efficient.

Forum discussion at WebmasterWorld and DigitalPoint Forums.

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Comments:

Toivo Lainevool

03/01/2007 11:20 pm

You headline and story are very misleading. Google said nothing about what percentage of click fraud is going on, they just reported how many invalid clicks they catch. The actual percentage of click fraud may be higher. I have details on <a href='http://www.admoolah.com/blog/index.php/2007/03/what-does-googles-click-fraud-announcement-really-say-about-level-of-click-fraud/' rel="nofollow">my blog post about this.</a>

Barry Schwartz

03/02/2007 12:58 am

Tovio, Thank you for sharing that. I will review.

Joost

06/07/2007 02:44 pm

Why does it cost $1 billion? If $100 million/year per percent, if only 0.02 % goes through the filter wouldn't that be 2 million/year?

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