SAN JOSE, Calif.--Google is fighting back against what it says are exaggerations in industry estimates of click fraud in its bread-and-butter pay-per-click advertising system.
In a report released Tuesday, the search giant disputes claims made by third-party companies that sell services designed to combat fraudulent clicks--clicks that aren't from legitimate Web surfers seeking information from a given ad. Those companies have estimated that the proportion of advertisers paying for fraudulent clicks is as high as 35 percent.
But in a report titled "How Fictitious Clicks Occur in Third-Party Click Fraud Audit Reports," Google says the figures are often inflated because the companies are counting clicks that were never made on Google AdWords advertisements. (Google's 17-page report can be accessed on the company's Inside AdWords Blog.)
For example, a single AdWords click may appear as five clicks in some reports, leading to the reporting of five fraudulent clicks, according to Shuman Ghosemajumder, business product manager for trust and safety at Google. Ghosemajumder referenced the Google report during a panel on click fraud at the Search Engine Strategies conference here.
Counting of fictitious clicks can happen when a Web surfer browses more deeply into an advertiser's site and then hits the back button, presses the browser reload button on the landing page or opens a new browser window, causing a reload of the landing page, Ghosemajumder said.
In addition, Google said it found evidence that the third-party reports were inaccurately "counting one advertiser's traffic in another advertiser's report, even if the advertisers span different ad networks," from, say, Google and Yahoo.
The Google report also criticized the third-party reports for using small sample sizes in their analysis, which Ghosemajumder said prohibits advertisers from being able to cross-check the data.
Part of the problem with determining an accurate click fraud rate is that auditors need to see both the traffic conversion data at the Web site and at the search engine company, which Google doesn't provide. Not having both sets of data "makes it difficult for us to marry it all together," said Tom Cuthbert, chief executive of Click Forensics, one of the auditing companies mentioned in the Google report.
"I will stand behind our methodology," Cuthbert said in response to his company's data being criticized in the Google report. "You are Goliath and we are just David down here trying to do what we can...You and I are never going to agree on the methodology."
Google's Ghosemajumder replied that the report does not dispute the methodologies used but concludes that the third-party reports are overcounting clicks, which results in unrealistic estimates of click fraud.
Like the representatives from the other anti-click fraud companies, Jessie Stricchiola, founder of Alchemist Media, said she had not seen Google's report. She pointed out that it took several class-action lawsuits to spur cooperation from Google. "The gloves appear to be off at this point," she said, referring to the contentiousness of the session.
A judge has given final approval to a $90 million settlement of a click fraud lawsuit filed against Google, and a settlement between Yahoo and advertisers is pending.
Stricchiola asked Google what percentage of its AdWords customers it gets data from on advertiser conversion data, a measurement of how many people who click on an ad take a particular action, such as make a purchase. Ghosemajumder said Google does not publicize that information but provides free conversion tracking tools that enable customers to provide that data to Google.
Ghosemajumder and John Slade, senior director of global product management at Yahoo Search Marketing, said the search giants would commit to abiding by third-party independent audits after standards for defining click fraud are enacted.
Google, Yahoo and others announced last week that they are working with the Interactive Advertising Bureau and the Media Rating Council on standards for defining and measuring click fraud.
Abhilash Patel, director of Internet Operations at substance abuse treatment center Passages in Malibu, Calif., complained that he sees a "significant amount" of traffic coming to his site from "garbage Web sites" that are created merely to drive traffic to ads or to accomplish other fraudulent purposes, using a practice called "arbitrage."
Patel estimated that 15 percent of the clicks on his organization's ads are fraudulent.
The Google and Yahoo representatives said they kick Web sites off their ad networks if they violate the ethics policies.
Lori Weiman, director of KeywordMax, said that of a small group of customers, her firm found estimates of click fraud in the 8 percent to 10 percent range, but rates as high as 28 percent existed on the extreme end. KeywordMax data was not included in the Google report.
Today George Moore, GM of Windows Live, announced the 
As the outcry by advertisers grows louder than the assurances from Google that click fraud is not a substantial problem, representatives from Google and Yahoo! publicly stated today that they would accept independent click fraud audits. Of course the true independence of any audit will need to be closely watched. The pay per click advertising business is a monster - with billions of dollars exchanged annually. Yahoo! has made more than $9 billion since 2004 from all of its online advertising, Google more than $13 billion since 2001. 
