Google to refund advertisers as fraud case rumbles on

Industry Contributor 27 May 2019 - 2 min read

Google to refund advertisers as fraud case rumbles on

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Tags: google, ad fraud, AdTrader, class action, advertising, digital

Google is set to refund advertisers some $75m as a lawsuit over refunds linked to higher than normal levels of ad fraud or ‘invalid traffic’ on its Display & Video 360 platform wends its way through the justice system (Wall Street Journal).

Key points:

AdTrader filed suit in late 2017 claiming Google withheld payments to both advertisers and publishers after higher than normal level of ‘invalid traffic’
Court documents show Google engineer testimony that it withheld an estimated $75m linked to spend on its own products
Technical difficulties cited, including billing systems – and that some parts of the business did not know what the other part was supposed to be doing
Google has offered to pay refunds, according to WSJ, citing unnamed sources
AdTrader plans class action
“This may be only the tip of the iceberg, so weʼll keep at it.” - AdTrader attorney Randolph Gaw
Google modified terms to head off class actions in September 2017 after fraud discovered

The engineer’s testimony is interesting. It suggests that Google, vast repository of data, is struggling to join the dots internally – and that systems migration is a debacle, even for tech giants.

What is puzzling is that $75m is chump change for Google. The company took in $116bn in ad revenue in 2018. Even as competition starts to bite, annual growth remains strong double digit. Yet it has taken almost two years to cough up. It is also telling that Google changed its terms in 2017 to head off class actions: Given it takes around one in four U.S. digital ad dollars – and analysts suggest North America is the single biggest component of a $42bn ad fraud market – is it right to anticipate more?