The main cause of fraudulent clicks, according to Google’s business product manager Shuman Ghosemajumder, are bots or other software that generate false clicks.
Ghosemajumder said that invalid clicks are less than 10 percent of all clicks since Google launched AdWords in 2002. Every percentage point of invalid clicks Google “throws out” represents more than $100 million lost in potential revenue.
Google determines a fraudulent click via a three-stage process. Most false clicks are identified in the first and second stages using Google’s proprietary software. The third stage is when advertisers report click fraud to Google and the company investigates. Just .02 percent of false clicks get past the first two stages, Ghosemajumder said.
“Click fraud protection is something we take very seriously, and it requires a great deal of research and development to do effectively,” Ghosemajumder said in the blog post. “We are disclosing these network-wide figures in order to provide greater transparency to Google advertisers and the marketplace as a whole.”
Online advertisers that are members of the AdWords program pay Google a fee from the number of click-throughs its ads receive, while site operators earn a commission for each surfer’s click. Google does not charge its advertisers for clicks it determines to be invalid.
Google’s critics have continually harped that the search engine giant has not implemented enough preventative measures to combat invalid clicks, which is costing its advertisers money. To answer critics, Google launched the AdWords Report Center, which gives advertisers the ability to track their ads and examine fraudulent clicks.