Google Issues Refunds to Advertisers for Ads Affected by Fake Traffic

Tech giant Google has issued refunds to advertisers overcharged by the company due to ad placement on websites that use fake internet traffic to boost ad payouts.

The Wall Street Journal reports that Google will be issuing refunds to advertisers charged for ad views that ran on utilizing fake internet traffic to generate advertising income. Google parent Alphabet Inc. has reportedly warned marketers and ad agency partners of the risk of “ad fraud” and fake internet traffic, following the discovery that some sites had used fake traffic bought using the company’s DoubleClick Bid Manager during the second quarter of 2017.

Many advertisers are not happy with Google’s solution, however, as the company is only offering a refund of their “platform fee” which works out to be approximately 7 to 10 percent of the advertiser’s total ad purchase. This leaves many advertisers losing 90 percent of their ad investments to fake traffic click bots with little recourse to regain their lost revenue. Google claims that the 7 to 10 percent refund is appropriate as they have no control over the rest of the money spent.

Advertisers normally use DoubleClick Bid Manager to target specific audiences across a vast number of websites by connecting to multiple online ad exchange systems and marketplaces that allow buyers to work with publishers and bid on real-time ad auctions. The money spent on advertisements flows through these exchanges, but issues arise when the ads turn up on websites using fake traffic to generate ad clicks. This is a huge issue for marketers as in most cases, once the use of fake traffic is discovered, it is impossible to get the money spent back.

Scott Spencer, director of product management for Google, stated that refunds had been paid to advertisers affected by the recent use of fake traffic to boost ad revenue, but Spencer did not state exactly how much Google paid out. Reports from advertisers that received refunds vary with some stating that they received “less money than you would spend on a sandwich” whereas others claim to have received hundreds of thousands of dollars.

“Today, we can’t disclose the information about third parties,” Spencer said. “So when we aren’t able to catch invalid traffic before it impacts our advertisers and we’re unable to refund their media spend, it hurts us, even if we’re not responsible.” Google is reportedly working on ways to combat the use of click-farms and traffic bots to prevent similar situations in the future but is keeping very quiet about the methods they’ll be using to combat the issue. “We need to be very careful about commenting on or discussing specifics about bots or our detection,” said Spencer. “Often fraudsters will change their approaches and strategies based on our public comments.”

Google has taken steps to increase the reliability of their advertisement platform in recent months, even joining the Ads.txt initiative started in May by the Interactive Advertising Bureau. The Ads.txt initiative allows publishers to insert a text file into their websites which lists all of the advertisement vendors that are authorized to sell inventory on the publisher’s website so that ad buyers can determine which platforms are selling legitimate ads. Google’s involvement in the initiative is supposedly one of many attempts for the company to gain trust from their consumers.

“When people talk about [ad fraud], there’s a big specter to it and a big concern about invalid traffic in digital,” said Spencer. “It’s not that large in terms of a percentage of what people are buying, but it can be a little bit scary to buyers, and our goal is to remove that to improve the trust overall in the ecosystem.”