Google and Its Partners Will Issue Refunds to Advertisers Over Fake Traffic

By Jack Marshall 

Alphabet Inc.'s Google confirmed Thursday it will issue refunds for ads bought through its systems that ran on websites with fake traffic, and said a handful of its partners have agreed to do the same.

The Wall Street Journal reported in August that Google was issuing refunds to some advertisers after ads purchased through its DoubleClick Bid Manager tool ended up running on websites with fraudulent traffic.

At the time, Google was only prepared to reimburse advertisers for the "platform fee," which ranged from 7% to 10% of the total ad spending. That reflected the fee those advertisers paid to use Google's ad-buying tools.

The rest of the money flows through to dozens of online ad exchanges, which connect marketers to ad space across a vast number of websites through real-time auctions. At issue is when ads run on sites with fraudulent traffic, including those loaded or clicked by software programs known as "bots" instead of humans.

In a blog post, Google said a handful of major exchanges have now agreed to issue full refunds for fraudulent ad space that was purchased.

"Supply partners like AppNexus, Index Exchange, OpenX, Teads, Telaria and DoubleClick Ad Exchange have been very supportive of these changes and have committed to provide advertisers with refunds for invalid traffic detected up to 30-days after monthly billing," the blog post read.

The DoubleClick Ad Exchange is Google's own ad exchange.

Google said it is also working on a system to automate those refunds, which it intends to implement "in the coming months." The company also said it is investing in reporting features to give both advertisers and its ad supply partners better visibility into what its ad fraud systems detect.

The ad industry has been working aggressively to tackle fraud. Some $6.5 billion in ad spending will be wasted this year to fraud, down 10% from 2016, according to a report released in May by the Association of National Advertisers and ad-fraud detection firm WhiteOps.

Write to Jack Marshall at [e-mail]

(END) Dow Jones Newswires

September 21, 2017 17:47 ET (21:47 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.