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Service drains competitor's Adwords budget

krebsonsecurity.com

21–30 of 60 posts

Re: Service drains competitor's Adwords budget

#21

Earlier quoted context omitted.

Fair enough but by bringing it up in a thread about someone with a botnet screwing people over...its pretty reasonable to conclude that is what you meant.

Whilst most VCs aren't doing anything anywhere near as patently unethical as funding a Clickfraud-as-a-Service app, if they're "disrupting" competition through little more than willingness to make negative profit margins on each sale, that competition ends up just as screwed if their pockets aren't as deep. Either if way they're spending money on making you poorer rather than themselves richer in the short term it's…

Good points & over all, I really appreciate the rational, yet learning/confrontational discussions here.

I was just trying to spread the word to other startups that the auction-based paid advertising model might work initially, but gets really tough to sustain as it naturally evolves.

In a non-auction based method, the evolution to "zero margin" may be a slower process. Yet those non-auction methods of paid advertising (billboards, magazine, TV) are just horrible for tracking & closing the loop as to be obsolete, and are often too expensive for startups to even enter anyway.

The best advertising is to realize that your customer service/support function is not an cost, but rather an investment in word-of-mouth advertising. Investing in great customer service is often the best modern marketing.

Re: Service drains competitor's Adwords budget

#22
Slightly different, but I had a user attempt to get my AdSense account banned by repeatedly clicking ads for days. Sadly, for the advertisers, Google didn't do a thing. This user racked up close to 10,000 clicks, my earnings skyrocketed for a day or two, and I contacted Google with clear evidence pointing to a particular IP address, and explained the situation in-depth with server logs.

This was submitted through their form to contact them about click fraud, and I never heard back. Those advertisers paid for thousands of fake clicks, and I ended up with a decent chunk of change.

I can't understand how they missed it. My clicks are level for years, and then during a couple of days, they increase 50-100x normal levels. This should have been a huge red flag.

Re: Service drains competitor's Adwords budget

#23
This reminds me of a nasty attack I learned about recently. I run http://unblock.us.org, a DNS/anti-censorship server. Unblock does tunneling for censored websites.

There are scripts out there that scan the whole internet for servers that accept HTTP and HTTPS requests to proxy. Those scripts are set up to simultaneously HTTP(S) GET tons of doubleclick.net etc. URLs to get the site owner kicked off Google Ads. I can imagine the black hat hackers selling their services for anyone willing to hurt a competitor's income.

Obviously my server detects those attacks and blacklists them right away, but I was shocked at the ease of carrying that kind of attack. One day I really need to blog about all the shocking stuff going on online that I learned about by running a public service.

Re: Service drains competitor's Adwords budget

#24
I setup a system to track every google adwords click by ip address then created a spreadsheet of the reverse dns and how many clicks to try and get a refund. It didn't matter how many times one ip address clicks through Google says that sometimes it might take a lot of clicks from one person because they are "deciding" if to buy or not. Anyway I sent several of these spreadsheets to Google and received a refund for a measly $28.00. They say they automatically do refunds but I get about $10 per $10k in refunds back automatically. It is not a very large amount.

Re: Service drains competitor's Adwords budget

#25

Earlier quoted context omitted.

Does he really defraud Google? They're still getting paid.

They get paid for another month, or maybe a few, until the advertiser sees that their ads now cost more than the revenue they bring in, as the fake/purchased clicks don't ever buy the company's products or services. At that point logic dictates that they cancel their ads with Google. Google would have earned that bit of money either way, but now they've lost all the future revenues from that business. If you dig into…

This is about Company A removing Company B, C, D, & E from the search results so that Company A gets all the sales and leads from that day. Company A would be happy if it scares them away permanently -- then they don't even have to pay the Hacker to deplete their daily budget anymore.

These particular hackers obviously have a service that Google's Invalid Clicks detection cannot pick up and it's successfully depleting advertisers' budgets -- hence the positive reviews they have.

Re: Service drains competitor's Adwords budget

#26
post #15

Earlier quoted context omitted.

I think the effect that you describe can happen. You seem to be suggesting that it's controversial, but I don't see it. If they want to make a loss and pay that much, good luck to them. They must be doing it with the expectation that it will somehow be worth it in the long-run, and it's their money (or the VC's money) that they're playing with.

They're doing it with the expectation that deeper pockets can substitute for innovative / better products. Sometimes they're right.

if the product by the bootstrapped startup is indeed more innovative (read: better), then it won't (or at least, shouldn't) matter that the VC backed startup tries tactics like this. If both their products are generic/simple, then yes, draining your competitor's ad budget is akin to you having more budget to spend. Advertising is a zero sum game after all.

Re: Service drains competitor's Adwords budget

#27
post #26

Earlier quoted context omitted.

They're doing it with the expectation that deeper pockets can substitute for innovative / better products. Sometimes they're right.

if the product by the bootstrapped startup is indeed more innovative (read: better), then it won't (or at least, shouldn't) matter that the VC backed startup tries tactics like this. If both their products are generic/simple, then yes, draining your competitor's ad budget is akin to you having more budget to spend. Advertising is a zero sum game after all.

But that's not true either. The very point of VC funding is that it allows you to be able to do things and achieve better growth than any bootstrapped could dream of, so even if the bootstrapped companies product is far more innovative, they can easily be squashed. That sucks, although I don't see any way of fixing it. An excellent product isn't enough, as well all well know.

Re: Service drains competitor's Adwords budget

#28

This reminds me of a nasty attack I learned about recently. I run http://unblock.us.org , a DNS/anti-censorship server. Unblock does tunneling for censored websites. There are scripts out there that scan the whole internet for servers that accept HTTP and HTTPS requests to proxy. Those scripts are set up to simultaneously HTTP(S) GET tons of doubleclick.net etc. URLs to get the site owner kicked off Google Ads. I can…

You really should - that sounds super interesting!

Re: Service drains competitor's Adwords budget

#29

As opposed to how VC's drain competitor's adwords budgets? Meaning, this is too often how I see competitive bids going over time: 1) You sell a widget for $100, and it costs you $50, so you spend $10 on the ad, & make $40 margin. 2) Your competition gets in, & has similar price/costs, & bids $11 on the ad. 3) After a few iterations, you both bid $49.50 for the ad, making near zero (positive) margins & stay in busines…

Same effect exists in restaurant industry, mainly in the low-end brand-less family-owned space.

Restaurant enters the space, decides to compete on price to build up audience to rake in the profits later on, giddily watches a competitor or two go out of business. Few months later another restaurant enters the same space, see the beginning of the paragraph.

Re: Service drains competitor's Adwords budget

#30

Slightly different, but I had a user attempt to get my AdSense account banned by repeatedly clicking ads for days. Sadly, for the advertisers, Google didn't do a thing. This user racked up close to 10,000 clicks, my earnings skyrocketed for a day or two, and I contacted Google with clear evidence pointing to a particular IP address, and explained the situation in-depth with server logs. This was submitted through the…

Because they have a monopoly on advertising it's not really in their interest any more to detect click fraud.
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