It happened again!
On February 2, 2017, the online marketing company, WickFire LLC, was awarded $2.3 million in compensation for lost earnings due to fraudulent clicks.
Although authorities recently uncovered the largest ad fraud scam in history, the details of this latest click fraud lawsuit are pretty appalling, to say the least.
You may remember a while back when we wrote about all the reasons why it doesn’t pay to go to court with Google over click fraud. Well, at least with Google, you would be able to expect some level of respect and decency. With this case, it seems like a lot of people involved forgot to take an ethics course in business school.
That may be a bit harsh so before we start shaking our heads in contempt, let’s examine the case more carefully.
The Plaintiff, WickFire and the Defendant, TriMax Media are both companies that are hired to create ad copy and manage pay-per-click marketing campaigns online for their clients. According to an article in Law360:
“WickFire said TriMax CEO Laura Woodruff engaged in multifaceted click fraud to spend WickFire’s ad dollars and make it look like WickFire was breaking client contracts.”
In the end, A Texas federal jury concluded that 95% of the fault could be placed with Woodruff and the Defendant was ordered to pay $1.984 million for interference with client contracts and $334,000 for interference with prospective business relationships.
But before the verdict was announced, things got pretty explosive.
“According to a fourth amended complaint filed in October 2015, the day after TriMax client Freshology decided to go over to WickFire and instructed TriMax to halt it’s ad work for Freshology, IP addresses in Dallas, where TriMax is based, started systematically searching for Freshology-related terms and systematically clicking on the WickFire-placed ads that popped up in response.”
And they didn’t stop there!
WickFire also claimed that the same fraudulent clicks were inflicted on dozens more of their customer’s ad campaigns and stated that TriMax had impersonated their CTO and other company insiders by using their names to create fake Google AdWords accounts.
TriMax fires back!
TriMax goes on the defensive and claims that WickFire intentionally stole their clients and that WickFire was guilty of committing click fraud. TriMax goes on to accuse WickFire of multiple counts of misconduct including:
Instead of boring you with all of the confusing details, we want to at least note this important claim related to “Predatory ads”
“The alleged predatory ad scheme proceeds in three steps. First, WickFire submits a bid for an ad (the predatory ad) and set of search terms. The predatory ad, however, does not link to the relevant merchant’s website, but to a placeholder website, such as a search engine or coupon website. Because that placeholder website is less relevant to the consumer’s search than the relevant merchant’s website, the predatory ad ‘generally run directly below’ the winning ad. Second, once the predatory ad is placed, WickFire incrementally increases its cost-per-click bid on the predatory ad, which drives up the cost-per-click price of its competitor’s winning ad. The higher cost-per-click price rapidly exhausts the budget for the winning ad, causing the ad campaign to pause and the winning ad to be removed from display. Third, with its competitor’s ad budget exhausted and campaign paused, WickFire immediately decreases its cost-per-click bid on the predatory ad, allowing a WickFire ad linking to the relevant merchant’s website to move into the winning position.”
In a nutshell, WickFire then claimed that TriMax had little to no evidence to back their claims and the court agreed.
Is your head spinning yet?
To be fair, you were warned. This case makes the click fraud lawsuit between Criteo Vs. SteelHouse seem like a walk in the park. Don’t worry if you don’t understand everything. But if you are starting to wonder if you have ever been a victim of click fraud, consider the following.
In cases such as these, there must be a very high burden of proof in order to receive any compensation for damages. In this specific case;
“WickFire had to prove by clear and convincing evidence that the harm to WickFire resulted from actual malice or gross negligence.”
Ok, enough with all this legal jargon!
Basically, this entire case was needlessly complex with both the defendant and plaintiff filing thousands of pages of accusations against one another. In the end, WickFire was awarded millions of dollars but we have to wonder why no one mentions how much money WickFire’s clients lost.
Do these large marketing companies even care? After all, the real victims in all this are all those companies that hired WickFire to manage their online advertising campaigns. And even though the jury came back with a verdict, this case was so complex that we think it’s safe to say that this is far from over. So stay tuned and keep an eye out for new blogs about click fraud lawsuits.
The moral of the story:
Don’t let this happen to you! All of this courtroom drama could have been avoided because there are ways to detect and prevent click fraud. If you hire a company to manage your pay per click advertising campaigns, make sure that they use some sort of click fraud detection and prevention tool.
Suggested reading: Who’s Behind That Click Bot And Why You Need To Know