Google To Refund “Fake Traffic” Advertising Revenue

One month ago, consumer products giant Procter & Gamble – one of the largest and most sophisticated advertisers in the world – launched a mini crisis in the online advertising space, when the company announced that it was scaling back its online advertising spend, stating that “digital ad spending was lower versus a high base period and due to current period choices to temporarily restrict spending in digital forums where our ads were not being placed according to our standards and specifications.” The implications to this admission that online advertising was either being gamed by bots, or generally underperforming were significant, as it jeopardized the future revenue streams of two of the biggest companies in the world, Alphabet (aka Google) and Facebook, both almost entirely reliant on online advertising. How long before other anchor names decided to similarly cut back on their online ad spending?
So, one month later, in its first tacit admission that its ad network has few protections against “fake traffic” such as ever more sophisticated ad bots – and that P&G’s criticism was spot on – the WSJ reports that Google will issue refunds to advertisers for ads bought through its platform that ran on sites with fake traffic “as the company develops a tool to give buyers more transparency about their purchases.”
Hoping to avoid further spending cuts and outright contract losses – especially to arch rival Facebook, which has similarly admitted to having ad exposure problems on numerous occasions – in the past few weeks Google has informed hundreds of marketers and ad agency partners about the issue with invalid traffic, also known ‘ad fraud.’ According to the WSJ, the ads were bought using the company’s DoubleClick Bid Manager.

This post was published at Zero Hedge on Aug 25, 2017.