Google has an ad fraud problem: Facing a storm of fresh criticism for serving ads to websites with fake traffic, resulting in fake clicks on ads, the web giant has pledged to crack down on this long-running issue. Google will be issuing partial refunds to those affected and promises to develop a set of diagnostic tools to increase the transparency around ads served through their services.

According to an anonymously sourced report in the Wall Street Journal, Google has informed hundreds of advertisers and agencies over the past few weeks about its problem with ‘ad fraud’ — invalid traffic and fake clicks. Google’s refund specifically addresses ads bought through its DoubleClick Bid Manager during the second quarter of 2017, although the problem is allegedly more widespread.

Google refused to specify how much money had been refunded due to ad fraud so far, but advertisers cited in the article quoted figures ranging anywhere from the single-digits to hundreds of thousands of dollars.

What are fake clicks and ad fraud?

Most Google ad buys are conducted via a proprietary online auction house like the DoubleClick Bid Manager, which connects marketers to dozens of marketplaces where they can bid to target audiences across a wide array of sites. On sites that are affected by fake traffic, those ads are then subjected to fraudulent clicks; since these fake clicks will never result in a purchase or conversion, the money spent on those ads is essentially wasted.

One of the most common vectors for fake traffic is malware that can surreptitiously hijack a computer and direct it to join a ‘botnet’ of other infected machines, which are then directed to click on ads.

Fake clicks can also be generated by programs like AdNauseum, an adblocking browser plugin. In addition to blocking ads on websites, AdNauseum also generates fake user data and clicks for each ad served in order to intentionally muddle the advertising and marketing data harvested from these sites.

Google vows crackdown on fake traffic

Though the slice of Google ads affected by this fake traffic problem is still relatively small, it’s an area of growing concern for marketers, and rightly so — an estimated $6.5 billion in spending will be wasted in 2017 due to ad fraud.

For its part, Google denies all responsibility for this fake traffic problem, saying that it is simply a middleman connecting online marketers with websites through its ad-brokering system. For this reason, Google has so far only offered to refund its platform fee (roughly 10 percent of a given ad buy) to affected advertisers.

“We can’t disclose the information about third parties,” Scott Spencer, director of product management at Google told the Wall Street Journal. “So when we aren’t able to catch invalid traffic before it impacts our advertisers and we’re unable to refund their media spend, it hurts us, even if we’re not responsible.”

As part of its push to stamp out fake traffic, Google has weighed the development of a set of diagnostic tools that would grant advertisers more relevant data to target their ads and judge how they perform. Google says it is also developing technology to ensure automatic refunds for advertisers in cases where fake traffic is detected.

Earlier this year, Google joined the industry-wide Ads.txt initiative with the aim of addressing ad fraud. As part of this program, publishers embed a text file on their website listing all platforms that are authorized to sell ads on their site, so that buyers can confirm they’re purchasing ads from a reputable vendor.

Regardless of how this specific case plays out, the problems of fake traffic and ad fraud are unlikely to disappear anytime soon, which raises the question of how industry-leading firms like Google will address them. Firms like Google are increasingly positioning themselves as brokers for complicated advertising systems while using that middleman status to excuse themselves from internal or external oversight.

For marketers who want to take a proactive stance against fake traffic, a 2015 report by NiemanLabs recommends some best practices. These include protecting your visitor data against external surveillance, never reselling visitor data to a third-party broker, and avoiding vendors who offer to boost your website traffic or SEO rankings through less-than-reputable means. However, even these tactics can only mitigate fake traffic, not prevent it entirely.

Google seems to view ad fraud as just another cost of doing business to be mitigated; it remains to be seen whether the wider advertising industry agrees.

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