A recent Forbes headline read “Is Click Fraud A Ticking Time Bomb Under Google?” referencing the billions in revenue Google makes each year from online advertising and multiple estimates of the click fraud rate ranging from two to twenty percent.
Google earned $36.5 million in revenues from advertising in 2011 and $10 billion of this came from Google placing ads on third-party websites. In 2006 Google showed that click fraud was less than 2 percent of all clicks across their AdWords network and that Google filters caught a large portion of this so that the illegitimate clicks would not be counted against advertisers. However, Adometry, formerly ClickForensics, estimated that click fraud was much higher during the fourth quarter of 2010: 19.1 percent. Using traffic from over 300 ad networks the company estimated a 17.4 percent click fraud rate in Q1 2010 which rose to 18.6 percent in Q2 and to over 22 percent in Q3 before falling in Q4 for first time since mid-2009.
Using both Google’s 2 percent estimate and the more recent 19.1 percent click fraud rate estimate, the contributing writer estimated how much fraudsters are earning off click fraud based off of Google’s advertising revenue in the Forbes article. Based off the 2 percent click fraud estimate fraudsters could be raking in $99 million from click fraud, but based off the 19.1 percent click fraud rate estimate this would be $1 billion in ill-gotten gains.
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