Microsoft v. Lam
Wow! Click fraud is real? Click fraud costs online advertisers millions of dollars? Click fraud can be uncovered and the perpetrators caught and punished? Who knew? Well, we did.
This week Microsoft filed the a complaint in U.S. District Court (Microsoft v. Lam, et. al., case number 09-cv-0815) seeking injunctive relief and damages from a group of people found to be perpetrating click fraud through the Microsoft adCenter platform. This is only the second time (Google sued Auctions Expert International in 2004) that a search provider has ever caught and sued an individual (or a family, in this case) for click fraud. We congratulate Microsoft for their efforts to root out this activity and encourage them in their pursuit of relief. Online advertisers should appreciate knowing that click fraud does not always go undetected or unpunished.
For those not familiar with the case, it’s an example of what we call “competitor click fraud.” The motivation of the perpetrators was simply to obtain higher-placed ad positions for lower bid amounts by depleting the daily budget of their competitors. The verticals affected were auto insurance and the online role-playing game World of Warcraft. Microsoft identified two brothers and their mother who controlled adCenter accounts that benefited from this fraud. They believe that this scheme affected more than just adCenter advertisers, but also the advertisers on competitive search engines.
Microsoft’s complaint, now public information, is so well written it could be used as a tutorial on click fraud detection. The most fascinating section describes the nearly year long game of cat-and-mouse played with the defendants. Reading from the complaint: “When Microsoft took steps to mitigate these automated attacks, the perpetrators followed by implementing countermeasures to Microsoft’s actions. A cycle of events ensued whereby the Defendants would update their attack methods to bypass the fixes implemented by Microsoft, and Microsoft would take additional steps to combat the new click fraud attacks.”
The lessons here are pretty clear: Click fraud is still a problem and solving it requires constant vigilance. The online advertising community needs to work together – search engines, ad networks, advertisers, and third-party auditors – to protect ourselves from this threat.
Tags: adCenter, Click Fraud, Google, Microsoft, steve obrien, Yahoo