In an interesting case which may have a long term impact on online advertising, Facebook filed a motion to dismiss in a case where several advertisers sued Facebook for click fraud last year.
Facebook argues that the case should be dismissed because its contract with Advertisers states that advertisers have to pay for all clicks, regardless of whether they are valid or not.
According to Facebook in its motion to dismiss “The contract does not require Facebook to police its website for all instances of click fraud nor does it limit Facebook’s ability to collect fees generated by clicks on plaintiffs’ advertisements,”
Facebook alleges that all cost-per-click advertisers are required to check a box stating that they agreed to the company’s terms and conditions, which includes the following language:
‘”I understand that third parties may generate impressions, clicks, or other actions affecting the cost of the advertising for fraudulent or improper purposes, and I accept the risk of any such impressions, clicks, or other actions.”
If Facebook can protect itself from the entire issue by simply placing language in its contract with advertisers that they are not responsible for click fraud will Google and Yahoo be far behind?
I understand the argument that if advertisers don’t get “value” for their money they will go elsewhere, but if Facebook, Google, Yahoo and Microsoft all adopted the same policy, advertisers would have no where else to go.
Wow – this is scary! Policies like this will turn advertisers-away from PPC as this allows very low-quality leads to come through and at the same price as a targeted customer.
With an increase in click-fraud by both publishers and competing advertisers I would hope that companies like Facebook would take the high-road and attempt to create technologies to detect and prevent fraud rather than language in their contract to simply protect themselves.
For a company like Google this is more relevant than any and I do hope they don’t follow in Facebook’s footsteps here.
I find it amazing as these start ups become the next big thing, how their lack of concern for partners and users are NOT a consideration in business decisions!
Facebook has a looming credibility and trust issue coming in the form of a tsunami. I predict a class action or criminal lawsuit in the near future as a result of personal information breach. They are pushing everyone to the edge of their “social” tolerance of such a company.
Seems they borrowed from the Google mantra “Do no evil” – NOT!
I just analysed a Google AdWords campaign and it appears that in our case the majority of clicks come from fraudulent websites as well.
See http://www.muhimbi.com/blog/2010/02/using-google-adwords-on-content.html
I think click fraud is no big deal whatsoever.
If networks and sites just let the clicks pass through, advertisers will just adjust their bids down. They are going nowhere b/c they can’t find advertising this cheap anywhere else…..even with a bunch of fraud clicks involved. Now, making the pubishers happy with less per click b/c of all the fraud passed though is another story, but for advertisers they can suck it up.
It actually makes perfect sense for Facebook to say they are not liable. They then don’t have liability, don’t have to spend countless financial and manpower resources to combat click fraud, countless advertiser inquiries over clicks….even down to five or ten click level, etc…. It’s actually a competitive strength if your competitor is struggling to remove those clicks and you don’t have to remove every last one.
How many folks look at a TV, newpaper, or magazine ad…..or listen to a radio ad with absolutely NO intention of buying. Should their viewer/subscriber/listener stats be deducted from the monthly or yearly circulation form stats which are passed around by ad agencies or publications themselves passing off those numbers as actual potential buyers? Obviously some will never by buyers…….they might as well be bots…..you get the same result. It’s also the same with the Net.
It’s just that when you give an advertiser an inch they want to take a mile. And, with the Net ppc model advertisers can argue, with TV or radio they really can’t. What’s their alternative in the TV realm? Demand accountability?
If MacAfee and Nortons can’t get rid of all the viruses, what makes people think companies can get rid of all the fraud in ppc? They can’t, and never will be able to.
It actually makes perfect sense for Facebook to say they are not liable. They then don’t have liability, don’t have to spend countless financial and manpower resources to combat click fraud, countless advertiser inquiries over clicks….even down to five or ten click level, etc…. It’s actually a competitive strength if your competitor is struggling to remove those clicks and you don’t have to remove every last one.