How Google defrauds Advertisers

This title is complete click bait - Google is not defrauding advertisers (no deceptive intent); bots / viruses / bad actors are.

The fraud mechanism is clicks on Google search ads which causes general distrust in advertising and so it is in both Google and advertiser's interests to block these clicks.

I don't doubt that click-fraud in Google advertising is common, maybe so common that it represents the majority of clicks. But I also believe that fraud causes a discount in the price over time. After all, very few people really buy clicks; what they're buying, however indirectly, are conversions: people that buy something, or sign up for their newsletter, or whatever. And when they set an ad budget, they do so with an empirical idea of the conversions/click, which will vary from context to context. Fraud drives down conversions/click, which in turn drives down the amount of money one is willing to spend on a click, which in turn reduces demand and drives down the price/click of advertising.

Just fyi, Google has massive resources devoted to detecting click fraud and getting rid of it. But I agree with the author. While many Google’s engineers and security professionals are focused on providing the most transparency about click fraud, the majority of the company (its business people) have all the incentives to reduce the appearance of click-fraud. If you were holding a spreadsheet that showed how 90% of your budget for self-driving cars, google glass, and other projects, is coming from a ponzi scheme, would you show it to anyone?