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Google Sued for Ad Fraud

Written By Drupad Sil | April 23, 2008 | Share This | Print This Post

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Legal firm Kabateck Brown Kellner filed a class action lawsuit against Google on Tuesday. The suit, filed on behalf of one David Almeida, accuses Google of deceiving its customers into paying for ads they didn’t expressly request. Elinor Mills at CNET gives the details:

“When participating in Google’s online auction-based advertising system, customers specify what they would be willing to pay for pay per-click for words or phrases that will trigger ads displayed on Google’s search site, as part of Google AdWords. They are also given the option of bidding for ads that appear on third-party Web sites, also called Google’s ‘content network’, which is part of Google AdSense.

On the system, customers see two blank boxes, one for typing in a bid for ads on Google.com, and another one, marked ‘optional’, for putting ads on content network sites. Sophisticated search engine marketers know to put a ‘0’ in the box for the content network AdSense sites if they don’t want ads there…

Google does not inform its advertisers that if they leave the box next to the content bid blank, Google will use the advertiser’s bid for clicks occurring on the content network, the lawsuit says.”

That’s not all, according to Dave Szetela at SearchEngineWatch:

“The truth is, advertisers don’t see this option during campaign creation. The only way for them to opt out of displaying ads on the content network is for advertisers to explicitly edit the settings of their campaign after creating it, and un-check the box labeled ‘Content Network’ – which is checked by default. Some would reason that this makes Google even more exposed to fraud charges.”

The question that people are raising is whether it makes sense for Google to knowingly exploit people using this tactic, draining Google advertisers of their online budgets. David Snyder at Marketing Pilgrim doesn’t think so:

“I’ve heard complaints such as these from several business owners…The issue is often discovered by advertisers when they see reports of low CTR.

The idea that Google would knowingly deceive advertisers seems a bit far fetched to me, well not that they would deceive, but that they did deceive.

Although I agree that they may have missed the boat on a usability flaw, which is something all of us are guilty of from time to time, I do not see that the giant of the online space has to gain by intentionally leading advertisers to third party publishers. In fact, such ad delivery means that Google has to give up a share of the advertising revenue earned. The company would probably prefer the ads be served on their own search network, where they can take in 100% of the revenue.”

We actually disagree. It’s definitely a gray area. The forced opt-out is a clear usability flaw of the kind that Google doesn’t typically make. But we also don’t think that someone at Google is intentionally trying to fleece advertisers by randomly placing their ads across a less relevant network.

This is more or less a legacy issue from the times when Google didn’t let you bid separately on content clicks - either you bought the whole shebang at the same price, or you were opted out of the network. The intent, at the time, was to prove to advertisers that the network had merit. Not necessarily equal to search, mind you (which is why the engines eventualyl allowed advertisers to set separate bid rates) but still valuable nontheless.

But at this point, the practice of auto-opting advertisers into the network, even if they leave the box blank, comes off as a bit sleazy.

Either way, it’s a story for AdWords advertisers to follow. Kabateck Brown Kellner has successfully sued Google for a $90 million click fraud settlement, and recently won a similar settlement from Yahoo. If the lawsuit is successful, and Google stops automatically extending campaigns into content, I wonder what the impact would be to their bottom-line? For now, Google has no comment.

Topics: Advertising: Online, Click Fraud, Google, Legal Issues |

5 Responses to “Google Sued for Ad Fraud”

1. advertiser [ April 23rd, 2008 at 11:34 am ]

   […] of deceiving its customers into paying for ads they didn??t expressly request. Elinor Mills at CNEThttp://www.searchviews.com/index.php/archives/2008/04/google-sued-for-ad-fraud.phpThe Herts Advertiser Herts AdvertiserCUSTOMERS of a Harpenden pub were delighted to see that it had […]


2. henrry134 [ April 23rd, 2008 at 12:17 pm ]

   That’s true. When participating in Google’s online auction-based advertising system, customers specify what they would be willing to pay for pay per click that will trigger ads displayed on Google’s search site, as part of Google AdWords.


3. legal search engine [ April 24th, 2008 at 7:54 am ]

   […] to put a ???0?? in the box for the content network AdSense sites if they don??t want ads there?? …http://www.searchviews.com/index.php/archives/2008/04/google-sued-for-ad-fraud.phpResearchBuzz Roundup 042208ResearchBuzz Roundup 042208 22nd April 2008, 04:55 pm New search engine […]


4. Mark S [ April 25th, 2008 at 9:27 am ]

   I completely agree. This has always been a point of contention in the SEM business as the automatic inclusion during campaign creation often leads to wasted budget if we don’t opt-out. It seems that Google should have made this fix a long time ago - or do they assume that there Content Network is so great that everyone wants in? I sure hope not. Depending on your geo-targeting (Ex. China), you can spend budget on some higly IRRelevant sites, at an alarmingly fast rate. It will be interesting to see what comes of the suit. I’d be content (no pun intended) if they just changed it so that you manually have to opt-in at setup.


5. Google Sued for Ad Fraud [ April 30th, 2008 at 2:56 am ]

   […] Tran Tinh wrote an interesting post today onHere’s a quick excerptThe issue is often discovered by advertisers when they see reports of low CTR. The idea that Google would knowingly deceive advertisers seems a bit far fetched to me, well not that they would deceive, but that they did deceive. … […]

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