Recent reports of Adwords fraud from Google bring the New England Patriots to mind. Love them or hate them, the Patriots know how to win Super Bowls. Having captured the NFL’s most coveted trophy five times since the turn of the millennium, few teams have commandeered as much respect–or hate–as the Patriots. The kings of 21st century football undoubtedly have an incredible team–look no further than their near impossible comeback against the Atlanta Falcons in Super Bowl LI. Yet their path to greatness has not been marked by integrity. Perhaps the most famous of the Patriots’ screw ups was the 2007 “Spygate” fiasco. Bill Belichick and his staff were caught videotaping defensive signals of the New York Jets, clearly breaking NFL rules. In the aftermath, a staffer turned over several other videotapes, evidence that pointed to an ongoing issue in the Patriots’ organization.
Belichick and the Patriots were fined hundreds of thousands of dollars, going down as one of the biggest frauds in the modern era of sports. And obviously, they learned their lesson… maybe not. Deflategate anyone? Much like the Patriots, the kings of the tech world, Google is running into problems with Adwords fraud. The tech giant is having to issue refunds to a myriad of Google Adwords clients who have discovered that their advertising efforts have been marred by fraudulent web traffic.
Google’s Money Making Machine Encounters Web Traffic Issues
Google’s money making machine, its Adwords system, has recently been the victim of fraudulent web traffic. In an ideal situation, a company will pay Google a certain dollar amount per click for an ad. The price of the click is determined by bid and influenced by a variety of factors–the positioning of the ad, the time of day, and the content of the ad itself. Companies pay large sums of money for their products to show up in Google search results. Yet the large amount of web traffic–which is usually a good thing for companies that use Google’s Adwords services–is not due to normal human web interaction. Rather, as one report notes, the clicks “are generated by software programs known as bots.” Thus many companies have ended up paying large sums of money to Google not for genuine sales opportunities, but for fraudulent web bots designed to drive up the cost per click and minimize the percentage of legitimate business leads.
In response to the reports of Adwords fraud, Google has been issuing refunds to unhappy web marketers and advertisers. However, the refunds haven’t left a good taste in many clients’ mouths, as the refunds “typically range from about 7% to 10% of their total purchase.” Thus at the end of the day companies are spending a lot of money for nothing. Google claims that the refunds are more than enough compensation, as they aren’t responsible for money spent beyond their platform fee. Nevertheless, companies are still very upset, with some even claiming that the reimbursement was “less money than you would spend on a sandwich.” As Google works to limit the Adwords fraud as best they can, they are working on a solution which will help make the refunds and future credits more efficient. But advertisers are nonetheless concerned about the process going forward, as they “haven’t been given details about where their ads ended up or specific details about the exploits the fraudsters used, so that advertisers and agencies can apply their own safeguards in the future.”
Though it is currently a bleak situation for internet advertisers and marketers, things are getting better as a whole. The projected loss from bot-caused ad fraud is $6.5 billion, down 10% from 2016. The drop is the result of an industry wide push to eliminate ad fraud, something which Google and marketers alike have been striving for. So while Google is still recovering from this most recent bout of Adwords fraud, let’s hope they don’t take a page out of the New England Patriot playbook and get caught in another fraud-gate scandal.