I hadn’t heard of the Center for Digital Democracy or the U.S. Public Interest Research Group, which isn’t surprising since I am in Australia, but perhaps they need the publicity. They have complained about Microsoft adCenter and other online services that collect information. The PC World article says:

CDD Executive Director Jeff Chester called on the FTC to shut down new forms of online data collection until consumer safeguards are in place. “Consumers have the right to have the option to opt in [to data collection],” he said. “What is wrong with letting the consumers make decision about how their data is used?”

Privacy fanatics want to be totally anonymous unless they deem otherwise. It’s a nice thought but most of them don’t run businesses, so they ignore the notion that business owners just might be able to deliver better service if they can collect some information about their customers. Similarly, there is a whole personalisation and CRM industry out there telling business owners to serve different customers differently (look up Peppers & Rogers).

Given my background in marketing and being a user of PPC advertising, I am on the side of CRM but this isn’t about me. When Microsoft launched adCenter, I applauded the ability to refine the demographic target audience for my ads. I don’t want to waste my money on an anonymous audience but I don’t want to know their names and personal details.

I wonder if these complainants are aware that Google also allows demographic targeting. Why didn’t they pick on the larger player? Here is the quote:

Chester called online data collection “pervasive and ubiquitous” and said the two groups focused first on Microsoft because it has told potential advertisers its data collection techniques are better than those used by rivals such as Google and Yahoo.

How is this relevant to click fraud? It is, in the sense that to protect these privacy fanatics against phishing and other nasties (and advertisers from click fraud), someone needs to collect information, in this case, about the bad guys. I don’t know if there is any way to identify the bad guys without collecting behavioural information!

I am active in running volunteer user groups and recently set up the Zune User Group. I used adCenter Labs to see what information was available about my target audience. Not surprisingly, I found that the target age group is <18,>

Wharton professor Balaji Padmanabhan and Yinghui Yang, a professor at the Graduate School of Management at the University of California, Davis have published a paper entitled, “Clickprints on the Web: Are There Signatures in Web Browsing Data?” They reveal how it is possible to identify unique users based merely on their browsing behaviour.

These professors are on the right track, but they are looking at finding click patterns of individuals more so than finding suspicious click behaviour. This could be useful for “confirming” that a single user at a multi-user IP address is generating invalid clicks.

Finally, Google has bowed to pressure and given advertisers a way to see what it calls “invalid clicks”. Anyone managing a large account has known that Google chucks random little amounts as account credits, which are explained as refunds for invalid clicks.

I have said in this blog for some time and in WIRED magazine that Google is good at keeping click fraud at bay, so I am not surprised to see a low rate of invalid clicks in one account.

Several participants in the AdWords forum on Webmasterworld have shared their own invalid click statistics. It seems to be below 4% for most of the posters.

But it all depends on the total spend. For a $45,000 spend, 4.2% is worth $1900 of savings because Google detected it. For a $65,000 spend, 3.7% invalid clicks add up to $2400. Advertisers can still speculate how many invalid clicks won’t be picked up by Google. The “get paid to read ads” scams are still around.

Back to the WW discussion, europeforvisitors made a good point, “ROI is what determines whether an advertiser is in or out.” Many advertisers seem to treat invalid clicks just as a retailer treats shoplifting – as long as the ROI is good, click fraud is part of the cost of doing business.

There is still a place for independent click fraud detection services. It would be great if Google were to release some more information about those invalid clicks – where they came from, IP addresses, time of day, number of clicks from each source. This is unlikely to happen, as it would drag Google into lawsuits between advertisers and the alleged invalid clickers.