Google to Disclose Invalid Ad Clicks

Google Inc. plans to announce today that it will start telling marketers how many times their ads are clicked fraudulently or accidentally, trying to tamp down an increasing concern of its advertisers and investors.

Some advertisers have complained that Google, Yahoo Inc. and other search providers don’t do enough to prevent “click fraud”: clicking on a competitors’ ads to drain their advertising budgets or clicking on ads on one’s own site to artificially boost revenue. Advertisers pay only when someone clicks on their ads.

Estimates of the problem’s size vary widely, causing some investors to fear an advertiser backlash against the fast-growing method of advertising in search engines and on Web pages. Google has said it screens invalid clicks. In the past, though, it wouldn’t notify advertisers.

Google plans to give advertisers a tally of invalid clicks, as well as the percentage of all clicks that are deemed invalid.

“We think the most valuable data we can share about the problem is to advertisers as it relates to their own accounts,” said Shuman Ghosemajumder, Google’s business product manager for trust and safety.

Google’s approach has limitations. The company, not advertisers, decides what constitutes an invalid click. And if Google doesn’t recognize a click as being fraudulent, it can’t flag that click for the advertiser.

But Sapna Satagopan, an analyst at research firm JupiterKagan, said the move could help Google’s effort to be more accountable to advertisers, which can now compare their own click fraud estimates with those of Google.

Google has “not been transparent at all in terms of click fraud,” she said.

Google is awaiting an Arkansas judge’s final approval of a $90-million settlement involving allegations that the company overcharged for ads. An independent report by a New York University professor filed with the court last week concluded that Google appeared to be taking reasonable steps to fight click fraud.