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August 31, 2005
Is Google serious about click fraud?
Over at Got Ads? blog they mention using Google AdSense and noticing Click Fraud happening at their own site. He questions why there is not more of an obvious way to report what is going on. Should they be afraid of doing the right thing by reporting to google, and if they do report will he get banned and lose the revenue that has built up in his account?
I think there's click fraud happening here." However, I can't find any place on the AdSense publisher UI that says how to report it.
Posted by Hans A. Koch at 05:15 PM | Comments (0)
August 29, 2005
AdWords click quality defined - FROM GOOGLE
How does Google detect invalid clicks?
Google's proprietary technology analyzes clicks to determine whether they fit a pattern of use intended to artificially drive up an advertiser's clicks or a publisher's earnings. Our system automatically identifies most clicks generated by unethical users and automated robots, and filters out these clicks before they ever reach your reports. Google has three powerful tools for protecting your clicks:
Detection and filtering techniques: Each click on an AdWords ad is examined by our system. Google looks at numerous data points for each click, including the IP address, the time of the click, any duplicate clicks, and various other click patterns. Our system then analyzes these factors to isolate and filter out clicks deemed invalid.
Advanced monitoring techniques: Google uses a number of unique and innovative techniques for managing invalid click activity that surpass the standard methods. We can't disclose details about the software, except to say that our team of pioneering experts is constantly working to expand and improve our technology in order to stay ahead of changing trends in invalid click techniques.
Human expertise: In addition to our automated click protection techniques, we have a team of human experts who use specialized tools and techniques to examine individual instances of invalid clicks. This team is a key component of our strategy to expose, monitor and track invalid click activity, ensuring a high level of click quality. When our system detects invalid clicks, a click protection expert examines the affected account to glean important data about the source of the invalid clicks.
Learn more about invalid clicks here.
Does high click volume mean that I'm getting invalid clicks?
There are valid reasons for an ad to receive multiple clicks from a single source. The following are some possible scenarios:
* Individual users may legitimately click on your ad more than one time when comparison shopping or returning to your site for more information.
* An Internet provider may assign identical IP addresses to multiple users by geographic area.
* You may see an increase in traffic if your ads have recently been approved to run on search and content sites and products in the Google Network, if you recently opted in to the Google Network, or if new sites for which your ads are relevant join our content network.
* Click traffic may vary due to seasonal interests or current events. For example, fluctuations due to seasonal promotions or special sales are common, and keywords popular at particular times of the year will also experience a higher click volume regardless of whether you have made proactive seasonal changes to your account content.
These scenarios all represent legitimate users accessing your advertisement in expected ways. If you are uncomfortable with the increased click volume, we recommend optimizing your campaign.
How do I report suspected invalid clicks?
While we're constantly working to improve our invalid click detection capabilities, we can combat the problem best by working together. We encourage you to contact us if you believe you have been affected by invalid clicks.
We have a team of experts who investigate invalid click activity on a case-by-case basis. Including some or all of the following information may help expedite their time-intensive investigation:
1. The campaign(s), Ad Group(s), and/or keyword(s) associated with the suspicious clicks.
2. The date(s) and time(s) of the suspicious click activity.
3. Any data in your weblogs or reports that indicate suspicious IP addresses, referrers, or requests.
4. A paragraph describing the trends in logs and/or reports that led you to believe the click activity is invalid.
The verification and research process can be time consuming, and we appreciate your patience while our investigation team reviews your account. Please allow 3-5 business days for us to respond. If you have any additional information, please be sure to let us know so we can include it in our review.
To learn more about our click protection strategies, click here.
To learn how Google deals with invalid click activity, click here.
What does Google do when invalid clicks are detected?
Google actively implements several click protection techniques in order to combat invalid click activity. Clicks that Google determines invalid are automatically filtered from your reports. In addition, we apply the following policies for the protection of AdWords advertisers:
* If our experts find that invalid clicks have escaped automatic detection, you'll receive a credit for those clicks. This credit will appear as an Adjustment on the Billing Summary page of the 'My Account' section in your AdWords account. (Other types of credits, such as promotional credits and overdelivery credits, may also be labeled Adjustment.)
* Any advertiser or publisher participating in invalid click activity or any related offense is subject to legal prosecution. We will also take the appropriate action on the related account.
If you believe your account reports reflect click activity that is more extreme than ordinary user behavior or that exhibits strange patterns, please click here for more information and instructions.
Other Sources of Clicks
If you notice click activity that doesn't fit your usual patterns, please keep in mind the following possible explanations:
* Individual users may legitimately click on your ad more than one time when comparison shopping or returning to your site for more information.
* An Internet provider may assign identical IP addresses to multiple users by geographic area.
* You may see an increase in traffic if your ads have recently been approved to run on search and content sites and products in the Google Network, if you recently opted in to the Google Network, or if new sites for which your ads are relevant join our content network.
* Click traffic may vary due to seasonal interests or current events. For example, fluctuations due to seasonal promotions or special sales are common, and keywords popular at particular times of the year will also experience a higher click volume regardless of whether you have made proactive seasonal changes to your account content.
These scenarios all represent legitimate users accessing your advertisement in expected ways.
For more information about our click monitoring system, please visit our Click Quality FAQ.
What kinds of clicks does Google consider invalid?
Some sources of invalid clicks include:
* Manual clicks intended to increase your advertising costs or to increase profits for website owners hosting your ads.
* Clicks by automated tools, robots, or other deceptive software.
We closely monitor these and other scenarios to better protect you from receiving invalid clicks. To learn more about what we do to combat invalid clicks, please click here.
What can I do to help monitor or prevent invalid clicks on my ad?
You might consider using tracking URLs to monitor click activity on your ads. Tracking URLs make it possible to accurately identify all the traffic that comes from Google (or other sources) to your website. Once you know the sources of your clicks, you can track which keywords generate sales and give you the best return on investment.
To take advantage of tracking URLs, just place a parameter at the end of your URL. For example, if your URL is www.yourdomain.com, your tracking URL would be www.yourdomain.com/?referrer=Google.
It's important to test each new tracking URL in your own web browser to verify that it's linking properly to its specified page. If you find that a tracking URL isn't linking properly, you might want to eliminate the forward slash after the domain. For example, instead of www.yourdomain.com/?referrer=Google, try using www.yourdomain.com?referrer=Google.
Once you've created your tracking URLs, you can look at your web server logs or third party tracking software to get traffic data for your ads.
Web server logs provide electronic recordings of where your website traffic originates. To open the log file in your Web server software, use a text editor such as Notepad. This log file has an entry for each click to your site. To see how many clicks come from a particular source, just count the entries where the source (such as 'Google' or Google Network sites and products) appears in the referring URL.
What else can I do?
If you believe your account reports reflect click activity that is more extreme than ordinary user behavior or that exhibits strange patterns, please let us know.
Why might my website logs show different click patterns than what Google reports?
You might see a discrepancy between your weblogs and the reports in your account. If your weblogs show more clicks than your reports, keep in mind that our proprietary click protection technology filters out most invalid clicks before they ever reach your reports. To maintain the integrity of our advertising program, we work to make sure you're being billed for legitimate clicks on your ads.
If your weblogs show fewer clicks than your account reports, this discrepancy occurs when clicks to your ad are not detected by your web tracking software. The information below should help you reconcile your weblogs to the statistics reported within your account.
How our system works
Since our results pages host your ads, we are able to detect and record all types of clicks to your ad. If you are looking for more accurate reports than your current web tracking system, many users have found that the weblogs from their server are more reliable for comparisons with our reports.
Additionally, Google's reporting technology can record clicks that other web tracking programs may miss. Some tracking programs may not register clicks that occur while the destination site is down, or they may have limitations on the kinds and sources of clicks they detect.
Reconcile your weblogs
The following variables are the most common for those advertisers concerned about a discrepancy between their reporting statistics versus those reported via Google AdWords:
* Google Network statistics: Google displays ads on a growing network of search and content sites and products. Typically, Web tracking software is not able to recognize clicks from the Google Network as being Google's clicks. These are generally labeled with the third party site name, not as clicks from Google. If your ads are currently, or have ever been, distributed to the Google Network such as About.com, AOL, and Netscape, we recommend you visit our Google Network FAQ to determine whether some of the referrers to your site were from the Google Network.
* Time discrepancies: Time discrepancies between different tracking programs can throw off click estimates. Be sure to compare the appropriate time periods. All of our reports are accumulated on U.S. Pacific Standard Time (08:00 Greenwich Mean Time). To ensure the highest level of accuracy, there is a delay between the moment when a user actually clicks on your ad and when that click is reported as a statistic within your account. This delay represents the time required to evaluate and report the click as a valid one.
* IP selection: Your system may filter out visits from your IP address; however, AdWords does not. Also, if you currently use a shared ISP provider (such as AOL or EarthLink), you may be sharing one or more IP addresses with other users. Therefore, multiple clicks from the same IP address could be legitimate clicks from multiple users; each one would be reported as an individual, valid click within your account.
How will Google credit my account for invalid clicks?
Google constantly monitors for, and strictly prohibits, invalid click activity. We work hard to maintain the integrity of our advertising program and to make sure you're being billed for legitimate clicks on your ads. If we discover that you've been charged for invalid clicks in the past two months, we'll apply credits to your account.
You'll find any credits, including credits for invalid clicks, in your billing summary as a line item labeled Adjustment. Please note that other types of credits, such as promotional credits, may also fall under the Adjustment line item.
Will my reporting be affected by invalid clicks?
Our proprietary click protection technology filters out most invalid clicks before they ever reach your reports. To maintain the integrity of our advertising program, we work to make sure you're being billed for legitimate clicks on your ads.
However, if you feel that your account reports reflect invalid clicks, please let us know by following the steps listed here.
Please note that by creating an AdWords account, advertisers agree to accept the Google AdWords reporting system and reported metrics as provided via the AdWords program Terms and Conditions. We rely on our own servers' weblogs to supply the most accurate site traffic data to include in your reports. Similarly, we rely on our data to determine whether or not a credit for invalid clicks is due. If we discover that you've been charged for invalid clicks in the past two months, we'll issue an appropriate credit, but we're unable to retroactively change reports.
https://adwords.google.com/support/bin/topic.py?topic=35
Posted by Hans A. Koch at 09:11 PM | Comments (0)
August 28, 2005
What Is Click Fraud?
Click fraud refers to illegitimate clicks on a pay-per-click ad that result in increasing the cost of advertising but return no benefit to the advertiser.
Who Commits Click Fraud and Why?
The culprits could be competitors that want you to overspend on advertising or skew search results. Every dollar you spend on useless advertising is a dollar off your bottom line. And if you have set a daily spend limit for your PPC ads, every fraudulent click dilutes that limit. Also, as your daily budget is used up, your ads can sink lower in the rankings.
Another source of click fraud is unscrupulous affiliates who make money from click-throughs. These affiliates sign up for a program where they are compensated per click-through to your site. If they send you legitimate customers it can be a win-win deal. But the dishonest ones can generate a large number fake clicks.
How Do They Do It?
Click fraud can be automated or manual. It can be as simple as a rival occasionally clicking on competitor ads just to push his advertising costs up. But click fraud schemes can be sophisticated as well. A common method is to use online robots, or "bots," programmed to click on advertisers' links. A growing alternative uses low-cost workers in China, India and other countries to click on text links and other ads. These fraudulent clicks are harder to trace because they can be spread across a large network.
How Can You Protect Yourself Against Click Fraud?
Web analytics companies are beginning to address the problem with their software. Urchin, for example, includes a Click Fraud Module that identifies repeat clickers by IP address and then does a WHOIS lookup.
But if your Web statistics package is unable to identify fraud, there are other services that can help you. ClickLab and Whosclickingwho, for example, make identifying and deterring click fraud their focus. They are available by monthly subscription. Both apply a statistical scoring algorithm to identify potential fraud. Reports can then be used to request refunds from the search engines and/or reevaluate search terms. A tactic used by both to deter fraud is to display a message to anyone that clicks through repeatedly. Whosclickingwho's is called the "ClickMinder," and reads like this:
"Your internet location has been detected visiting this site more than 5 times via links from one or more pay-per-click search engines. We appreciate the opportunity to serve you and thank you for your visits. To protect our customers from higher prices by keeping advertising dollars down, we routinely examine recurrent visitations from PPC Search Engines. Please help us pass the savings on to you by bookmarking our site for future reference. Thank you for visiting and please enjoy browsing our site!"
This is polite enough not to alienate legitimate clickers, but likely to deter at least amateur fraudsters.
For more information, read ClickLab's free white paper,"How To Protect Your Website Against Click Fraud.
More Click Fraud Resources
http://onlinebusiness.about.com/od/seo/a/clickfraud.htm
Posted by Hans A. Koch at 09:10 AM | Comments (0)
August 26, 2005
Beware of Google AdSense
If you're counting on your income stream from AdSense, beware. On August 5, 2005 I woke up to find a message in my inbox from Google saying my AdSense account had been disabled. The reason they gave was 'invalid clicks have been generated on the Google ads on your site(s)."
It went on to say "Publishers disabled for invalid click activity are not allowed further participation in AdSense and do not receive any further payment." That's right, they also decided they were going to keep the earnings in my account at the time they disabled it.
I knew this had to be a mistake. I never clicked on ads on my own site or asked anyone else to click on them. I don't even know how to use automated click tools which are mentioned in the AdSense Terms of Service. I checked my server logs for any unusual activity, and found nothing.
I replied to the email saying it must be some sort of mistake, and requested an explanation with further details so this issue could be resolved and my account could be re-instated. After two days passed and no response to my reply, I sent another email to adsense-adclicks@google.com. More time passed and no reply. I then sent an email to Adsense-support@google.com, once again explaining the situation, and asking for a reply so this misunderstanding could be worked out and my account re-instated. Again, no reply. I even made a phone call to Google's home office in Mountain View, CA. You can't actually speak with a real person, but the recording asks for your email address so they can respond to you. I left my email address and my phone number, and again explained my situation. Still no reply. It is now August 26, 2005, a full three weeks of trying to get some sort of explanation from Google, with no replies.
The bottom line here is Google can close your account at any time for any reason, justified or unjustified, steal the money you have earned, accuse you of fraud, and then just send you a form letter saying they closed your account. They should add a sentence at the end of the letter saying:
"By the way, don't try to contact us requesting an explanation of why we have falsely accused you of this crime, stole your money and closed your account because we will not give you an answer. In fact, we will not even acknowledge your existence."
Jeff
contractors4u.com
Posted by Hans A. Koch at 02:55 PM | Comments (0)
August 24, 2005
Click Fraud is Growing
Once again I turn to the topic of click fraud - you know, clicking on AdSense advertisements simply to either add up your numbers (ie: make money) or disrupt your competitors (make them lose money).
Experts, as reported in Inc.com, say that 20% to 35% of all clicks are bogus.
Okay, so lets look at it from the advertisers point of view, more so if you are a small business (ie: your marketing budget is stretched), paying for these bogus click-throughs.
I like Inc.com’s view of click fraud:
It’s as if thousands of people are charging you for window-shopping
Click Fraud is a real growing problem that needs to be addressed sooner rather than later by the folks over at Google … right or wrong: their reputation is at stake!
I’ve even heard stories of advertisers being too scared to complain for fear of being blacklisted by the search giant. I hope this is not true.
Further info about click fraud that might be of interest …
A quick primer on What is Click Fraud from About.com
In July, C/Net News.com wrote about it in Exposing Click Fraud.
Popular online forum, SitePoint, has an on-going thread about being banned from AdSense - AdSense Banned Me Today. Another post at the forum - Invalid Clicks on Google Adsense - Help! goes further into fears some publishers have.
feedbuzzard even points me to a WebProNews article on the issue.
I even wrote a small post about it back in June.
There has also been a flourishing industry developing over click fraud and services helping to combat it … ClickDefense.com, ClickDetective, ValidClick.com … to name but a few.
Can you see a trend in all of this?
August 24th, 2005
http://www.homeofficevoice.com/2005/08/24/click-fraud-is-growing/
Posted by Hans A. Koch at 09:00 AM | Comments (0)
Google Adwords and PPC fraud revealed
Your probably reading this article because you use Google Adwords to bring traffic to your website, or your a click fraudster yourself, wanting to see what kind of information I have for you. Most of you click fraudsters will think that I have no idea what I am talking about, and that I do not know your methods. Well, trust me buddy, I KNOW ALL ABOUT YOU AND WHAT YOU DO.
If you are new to the click fraud scene, here is an example:
1. Scumbag puts Google Adsense ads on his website.
2. The scumbag then proceeds to cheat Google Adsense by creating false clickthroughs and impressions, in return earning him a pretty nice profit, because he isn't even working on his website, just generating false traffic.
All of you people that run campaigns through Google Adwords are thinking, "This guy has no idea what he is talking about, Google has everything under control and they even state so publicly!"
WOW! What kind of pay per click company would admit that they DO NOT have click fraud under control? I wonder what would happen to their business immediately following that statement.
Estimates say that nearly 20% of all clicks for Adsense are illegitimate. In my honest opinion I believe this number to be around 30-35% from some of the things I have seen.
Alrite, now the big question, how are they doing it?
There are a number of ways that people are cheating, including the 'click groups' from India that click on your ads for you and create big pay checks as long as you pay them their $0.50 an hour so they can buy bread for their family.
But I'm going to show you the technical way that Google Adsense is cheated, not poor people clicking ads. I'm talking about extremely smart programmers that create hitbots to cheat Adsense. And, NO, I'm not talking about that piece of garbage 'CACA' or Clicking Agent that you find on Google. I am talking about PRIVATE programs and
scripts that are only used by private groups.
How do these scripts get away undetected you ask?
Simple, let's actually take a look at Google's click fraud protection (This is what I have summed up, I seriously don't believe they have anything other protection because people are still cheating using these methods as you read this article.)
If you actually take a look at Google's Adsense code when it is on your webpage you will find the URL that is used to retrieve ads. (Right-Clck your ad Iframe and click 'View Page Information' or something similar.)
Here is an example of the URL that you will find:
http://pagead2.googlesyndication.co...240&u_java=true
Now let's decode this up a little bit, shall we?
client=ca-pub-2521202633232871 - Your client code, this tells Google who to assign the click-through money to.
dt=1124847235453 - Javascript, if you use the command google_date = new Date(); document.write(google_date.getTime()) --- Which generates 1124847235453.
This shows you the number of milliseconds since midnite January 1, 1970. This is what seems to be Google's biggest automated proxy clicker fraud prevention. Doesn't seem too hard to generate with 2 lines of code now does it?
lmt=1124631699 - The last time your webpage was updated. LMT stands for Last Modified Time, pretty easy Javascript to generate this one too - document.write(document.lastModified);
--- Which generates 1124631699.
(Notice I'm skipping a bunch, that's because they are just showing the type of ad, colors, and size that you are using.)
cc=59 - Seems to be some random number based on the screen width, height, and color scheme. I've seen this number go from 20 all the way up to 400. I'm sure they don't use this to reliably track click fraud.
u_h=768 - Height of your screen settings.
u_w=1024 - Width of your screen settings.
u_ah=738 - Your available screen height.
u_aw=1024 - Your available screen width.
u_cd=32 - Color scheme on windows, e.g. 32-bit.
u_tz=-240 - Your monitor refresh rate or something else that isn't important, I've never seen it not -240.
u_java=true - Just seeing if you have java enabled.
There are some other variables that are sometimes in the URL such as 'u_his=' this means how many pages you have visited since you started up your browser. There's also some MIME type checks and how many plugins you have installed, but these variables come up very rarely. I think they are only meant for Netscape/Firefox browsers.
Now that we have 'decoded' the supposed unbeatable Google Adsense code, what do you think about click fraud? You still think it is rare?
After randomizing all the data and sending an automated query to their Adsense URL, all the scumbag has to do is parse out all of Google's click URL's and click one of them, giving him a click through. This can all be easily faked with even a Visual Basic program. A newbie programmer could in-fact cheat Google Adsense without much knowledge.
Alrite you say, they beat the javascript code detection but doesn't Google use cookies so they can't do this?
No, Google does not use cookies for Adsense.
Well what about IP-tracking? Someone can't have that many proxies!
There are click groups that leave these programs running on their computer. They each randomly click each other's URL's automatically. The person running the program doesn't even have to do anything, but he is still contributing to the success of their group and himself.
Does that sound too far-fetched? I am telling you that there are click groups that do this now and have been since the old Linkshare PPC days in 1999. Yes, if you were an advertiser on Linkshare back around 1999-2002, you got RAPED.
And that isn't all. I have read on the internet that there is currently over 100,000 people infected in the United States alone with trojan proxy servers. These proxy servers run on random ports so that Google can't just do a simple port 8080 or 80 check on it to see if it's a proxy. The majority of these proxy servers are used
for credit card fraud, but a lot of them are also used to cheat Google Adsense and other pay per click programs. These proxies are at-home users that look like normal dial-up, cable, and dsl users from all across the world, but mainly United States.
There is NO WAY to prove that they are a proxy.
Random User-Agent strings is another tactic that is often used by click fraudsters. This makes Google think that a lot of different browsers are clicking the links, just keeping them further from finding out the truth.
On a side note, you may be thinking that the new Yahoo! pay per click program may be the way to go. I checked into their protection and guess what? They are only using ONE of Google's protections and that is the Javascript GetTime. They are still in Beta though and this may change, but who knows?
To the cheaters: The benefits of cheating are short. Eventually you will be caught for what you are doing and maybe even sued by Google. There is a ton of money to be made legally with Adsense and I suggest that you stop cheating. Who am I to tell you to stop? I use to be one of you! Back when I was 13-14 I was making programs like the ones you guys are using now. You guys probably used one of my programs at one time. I am happy to say that those days of mine are all in the past now, and I am making a good amount of money LEGALLY with Adsense and other affiliate programs. Work hard guys and you will reap the benefits 100 times what you make cheating.
To the advertisers: You people that use Google Adwords now see that it is actually not very hard to cheat you out of your money, so be careful and MAKE SURE that you use a click fraud protection script such as ClickDefense. To lower most of your click fraud, just don't put your ads in the Content Network, only stay on Google's sponsored search results. Only Google gets paid when someone clicks the search results sponsored ads and nobody wants to cheat to make Google anymore money do they? Check the stock, it's currently at 279.58 a share.
To summarize my article I just want to state that no one should use this information for cheating Adsense and I am not responsible for your actions if you choose to do so. You will be caught because Google will evolve and get smarter, eventually.
Joseph Tierney is the owner of Auction Fraud Protection - http://www.stopauctionfraud.com A user-generated database of auction fraudsters. He is 2005 high school graduate and is currently studying for a computer science degree in college.
http://www.casinoaffiliateprograms.com/bb/google-adwords-and-ppc-fraud-revealed.7188.html
Posted by Hans A. Koch at 07:56 AM | Comments (0)
August 23, 2005
Google sued over 'click fraud' in Adwords
On June 24, 2005, a lawsuit was filed against Google for alleged click fraud on the Adwords pay-per-click program. The Plaintiff, Click Defense, claims Google failed to enact appropriate measures to guard against fraudulent clicks resulting in unwarranted marketing fees. Click Defense claims it has lost over $5 million to click fraud.
Click Fraud
“Click fraud” is a term with a unique meaning on the Internet. It refers to the deliberate clicking of pay-per-click advertisements by users that have no intent of actually making a purchase. It is common knowledge that unethical companies will set up click centers oversees where individuals are paid nominal wages to click on certain ads. Alternatively, companies will use programs called “click bots” that automatically search out ads and do the same thing. The end result, of course, is a bevy of clicks that drain advertising budgets.
Google claims it takes appropriate precautionary measures. This claim, however, is often met with a snicker since the sole source of revenues for Google is advertising. This causes an inherent conflict of interest since Google needs to maximize clicks to generate revenues. As a publicly traded company, Google is under pressure to continually show increased profits. Taking all of this into account, one must wonder how hard Google works to limit fraudulent clicks. If you have used the “content search” aspect of Google Adwords, the incredible poor conversion rates certainly must raise doubts in your mind.
Click Fraud Percentages
Neither Google, Overture nor any other search engine has been willing to publish click fraud rates for their paid advertising program. Hints have been provided regarding a rate of 20 percent. Active advertisers know, however, the percentages can be much higher depending on the competitiveness of the keywords in question. Click Defense, the Plaintiff in the lawsuit, is claiming a click fraud rate of 38 percent.
Will This Impact PPC?
The lawsuit against Google was inevitable. Every site using Adwords is aware of the problem with click fraud. Frankly, it is a problem with every pay-per-click search engine although our experience has been better with Overture.
So, will this lawsuit force the search engines to clean up their act? It’s hard to say, but there should be one definite benefit. As part of the lawsuit, Google may be forced to reveal the true click fraud percentages occurring in Adwords. If Google moves to quickly settle the case, you should take it as an indication it wants to keep the rates confidential. This, of course, will mean the click fraud percentages are high.
You should watch the progress of this lawsuit if you use pay-per-click search engines to promote your site. Some very interesting information should be revealed. Regardless of the outcome, click fraud is just another reason to pursue search engine optimization strategies.
Halstatt
http://www.marketingtitan.com/google_click_fraud
Posted by Hans A. Koch at 10:37 PM | Comments (0)
A New Keyword Advertising Model: An Interview with Mel Strocen of Jayde Online
The Independent Search Engine and Directory Network (ISEDN), founded in June 2005, is an alliance of approximately 48 niche search engines and directories. The innovative feature of the ISEDN is that members have agreed to use a new “hybrid paid inclusion” advertising model that charges advertisers a flat fee in exchange for displaying their ads across the entire ISEDN for the keywords they purchase, rather than use the standard pay-per-click advertising model. Recently, I chatted with Mel Strocen, the founder of the ISEDN, to discuss the network.
Scott Buresh (SB): Before we get into the ISEDN, please tell us a bit about your background, and about the history of your company, Jayde Online.
Mel Strocen (MS): Jayde Online was named after the first website I launched in 1996, Jayde.com, a search engine and web directory which was initially little more than a hobby site. As traffic and interest in the site grew, it began to take up more and more of my time. In 1999, I quit my full-time job which was totally unrelated to the Net and partnered with a newsletter publisher in Kentucky to co-found the iEntry newsletter network.
Two years later I sold my interest in iEntry and began to build the Jayde Online Network of websites which now number 20 web properties.
Back then, I had some fairly fixed ideas as to what type of website would be successful. Some of those ideas were right on the mark and others bombed big-time. Ultimately, SiteProNews.com, ExactSeek.com and GoArticles.com became the cornerstone sites for the network.
SB: This new network is being billed as "an affordable search engine advertising alternative to Pay-Per-Click". How does this model differ from the PPC model?
MS: There are two major differences. The most obvious is cost. Pay-per-click can be expensive, even for site owners who set monthly spending limits and who buy very targeted keyword terms to reduce irrelevant traffic. The model being promoted by the Independent Search Engine & Directory Network (ISEDN) sells keyword terms for a one-time, flat fee. The intial cost is the only cost. For example, purchasing a single keyword term for 3 months in our model costs $12. It's doubtful anyone can buy a keyword term on any PPC engine that costs $4 per month. The reality is that the better keyword terms on PPC engines can cost $4 or more per click.
The second major difference is in the area of click-fraud. It may be an overstatement to say that click fraud is rampant on the major PPC engines, but it is significant, possibly comprising as much as 20% of all clicks.
In the ISEDN model there is simply no incentive for click fraud to occur. Hostile competitor sites could click on your ISEDN listing all day, every day, and it wouldn't cost you anymore than what you originally paid.
SB: How does this model differ from the discontinued pay-for-inclusion model previously offered by Inktomi and others?
MS: The biggest drawback to the old pay-for-inclusion programs offered by Inktomi and others was that paid site listings and free site listings were lumped together in giant databases with little to differentiate the two other than that paid listings were indexed more frequently. Site owners who bought listings in these programs received no preferential placement and consequently had no better chance of having their sites rank well than site owners who had free site listings.
In the ISEDN model, advertisers are guaranteed top 10 exposure for their website listings across the entire network of search engines and directories. This kind of premium placement is made possible by the fact that the number of times any keyword term can be purchased is limited and all paid inclusion listings are rotated in the SERPs (search engine result pages) throughout the network.
Surveys of searcher behavior have consistently shown that few searchers look at more than 30 search results for any given query. We based the ISEDN model on that behavior and limited the sale of any keyword term to 30. On ExactSeek.com we display 10 paid inclusion listings per SERP in Google-type ad boxes. The ad boxes rotate randomly on the page and between pages for every search of the keyword term. If a keyword term has been sold less than 10 times, the paid listing always appears on the first page of search results although not in the same position. If the keyword term has been sold more than 10 times then paid listings begin to rotate between the SERPs. The worst case scenario for an advertiser would be to own a sold out keyword term in which case the advertiser's ad would appear on the first page of results roughly once of every 3 searches on his keyword term.
The same principle applies to all ISEDN sites, although not all ISEDN member sites display paid inclusion listings in Google-type ad boxes or have the same number shown on a SERP.
SB: If each keyword is limited to 30 advertisers, couldn't the best keywords become "sold out" very quickly (leaving potential advertisers with less to choose from)?
MS: That depends on how you define "best keywords". Best for me might not be best for you even if we happen to be in the same industry. There are literally millions of keyword combinations available.
Also, because paid listings in our model are tied to a fixed time period of 3 or 12 months, many advertisers simply forget to renew their keywords and as a result hundreds of keyword terms become available on a continual basis. However, in the event that keyword availability ever does become a problem, we may have to look at changing some program parameters to accommodate demand.
SB: Are there any plans to syndicate results to non-member websites the way Google does with its ads?
MS: No specific plans at this time, but the idea has been discussed and is a logical extension of our current advertising model.
SB: Let’s turn now to the search engine users. How do they benefit from the ISEDN?
MS: I think the real benefit to searchers will be the realization that there are some great search and directory sites on the Web and that search is not just the majors like Google, Yahoo! and MSN.
In the longer term, I'm hoping that the ISEDN as an organization can act as a counter to the gradual monopolization of search on the Web by a few a big players with deep pockets.
SB: Approximately how many searches per month does the ISEDN currently process?
MS: We estimate that pay-for-inclusion listings are displayed approximately 120 million times per month across the network. Unfortunately, there simply hasn't been time to obtain exact information from the individual members in the few weeks since the ISEDN was founded and given its rapid growth (approximately 3 to 5 new members each week).
We expect members will begin to provide detailed search impression numbers in the near future at which time we'll be able to specify the network's overall search reach. Of course, that reach will grow as the ISEDN grows.
SB: What are your plans for this network in the future, and do you see it competing with the 'major' search engines?
MS: The network is really too new for me to speculate on how it might evolve. Although ExactSeek is the founding member of the ISEDN, it is only one member. I'm looking forward to sharing ideas and objectives with the other members. There are some very intelligent and talented people in the ISEDN who I believe will help determine exactly how the organization develops and evolves in the coming months.
Do I think the ISEDN can compete with the "major" engines? Absolutely. Certainly, that's true with respect to search engine marketing/advertising. And, although none of the individual members in the ISEDN may be able to compete with the majors in terms of search traffic, the ISEDN with 50, 75, or 100 members, can. Keep in mind that unlike Google or Yahoo, we don't need to funnel more and more traffic through a single entry point. All we need to do is sign up more members to aggregate more search traffic. In any case, we look forward to the challenge.
SB: Thank you for your time Mel, and best of luck with the ISEDN.
By Scott Buresh
August 23, 2005
http://searchengineguide.com/buresh/2005/0823_sb1.html
Posted by Hans A. Koch at 09:56 AM | Comments (0)
How the Affiliate Marketing Industry Is Dealing With Fraud
With so much legislation and buzz about other Internet marketing issues such as spyware, adware, spam and click fraud making daily news, it is simply a matter of time before an effort towards some solution solidifies into real standards. Information on sharing is still an essential element in stemming the tide of fraud.
Approximately 10 years old, the affiliate marketing industry is one of the newest in performance marketing. Legalities, best practices and associations are in their infancy stages. That said, affiliate fraud is rampant.
Every morning I tackle the previous night's Filinet affiliate signups to run through our anti-fraud checklist. Out of 50 applications, there may be 5 to 15 of which are actual, legitimate affiliates. The others are added to a very large database of red flag URLs, names, e-mails, IPs and so forth. The ones who continue to try and breach our network with applications, or use another person's contact information, are shared across our partner networks and on the affiliate message boards, minus the wrong contact information.
In the world of e-commerce Learn how the leader in Internet services can help you start and grow your business online. Network Solutions. Go Farther., Affiliate Fraud is defined as "Bogus or unlawful activity generated by an affiliate in an attempt to make money." While spam generally angers consumers and click fraud is more geared toward the merchant, affiliate fraud causes casualties on both sides of the industry, affecting both affiliates and merchants. Frauds steal from merchants by generating false leads or sales. They also cripple affiliates by stealing their traffic via replacing their affiliate IDs in links, so that when a buyer completes a transaction, the credit for that transaction goes to the thief and not the actual affiliate who worked so hard to acquire that buyer. These traffic stealers are also known as parasites.
There are, however, various strategies in place to deal with the issue of cowboy affiliates willing to lie, cheat and steal their way into making easy money.
Combating the Cheaters
The best strategy for fighting fraudulent affiliates is one of prevention, monitoring and communication. Preventing frauds from entering and exploiting an affiliate program is the clear first step in avoiding the affiliate fraud spiral, but that does not make for a complete solution. Aside from stringent applicant screening to catch the obvious perpetrators -- such as those creative folks who sign up with a highly recognizable domain name Latest News about domain name only to use a hotmail e-mail address and a disconnected telephone number -- there are other steps merchants and networks can take.
Once an affiliate is allowed into our network, they are constantly monitored. We receive their e-mail newsletters, we visit their Web sites and our traffic department constantly reviews patterns for any suspicious activity coming from affiliate links. While some may not like the constant review, affiliates who generate legitimate traffic have nothing to be worried about. All of these extra measures allow us to offer legitimate affiliates the tools and resources they need to successfully generate revenue for our merchant partners.
While this is still an internal part of our business Sprint has the infrastructure in place to meet all your business communications needs. From one company. Today. Click here and see how Sprint helps business. model, there are already several efforts within the industry to deal with rampant frauds. Here are some of the ways affiliate managers and career affiliates are tackling the issues of frauds and parasites by applying self-regulation.
ABestWeb Parasiteware Forum:
It shouldn't be a surprise to anyone that ABestweb, being the largest affiliate community on the net has a forum dedicated to outing parasiteware -- any technology that steals traffic from legitimate affiliates by replacing their links with new ones. The forum lists over a dozen of the best-known parasitic companies including Claria, eBates, Kazaa among many others. Affiliates and merchants share war stories about being the victims of parasites as well as tips and strategies to remove parasiteware from computers.
While we still research every advertiser we allow into our network, this forum makes it easy to keep abreast of known parasites so that we can proudly be parasite-free. After all, the affiliate industry is the tightest knit in all of Internet marketing, since you really get to know your affiliates and other affiliate managers quite personally. Having known parasites in your network is a big faux pas, and sure to cement you a bad reputation.
AffiliateManager.net Fraud Fighters Forum:
Another available forum is AffiliateManager.net, which can be used to check on known fraudulent affiliates that try to penetrate other networks and merchants' programs. According to Shawn Collins, the forum's owner and author of Successful Affiliate Marketing for Merchants, "There are dozens of affiliate managers that communicate often about the latest fraud trends and we share information on affiliates that pose threats."
AffiliateFairPlay.com:
AffiliateFairPlay.com is committed to establishing fair trade practices within the affiliate marketing industry. The site's owner, Kellie B. Stevens states, "There are no universal standards in place for the industry as a whole for defining what is even fraudulent [or] bad behavior. Each individual network or merchant is currently defining these. While individual entities certainly have the right (and need to have the right) to establish what is allowed within their own business relationships, if you look at most other industries, there is still a core set of guidelines for the entire industry." At this time, affiliate marketing does not have such core guidelines. So Stevens, who consults with merchants and networks, has dedicated herself toward creating such an entity in AffilaiteFairPlay.com, although it is an on-going process.
What Happens Next?
With so much legislation and buzz about other Internet marketing issues such as spyware, adware, spam and click fraud making daily news, it is simply a matter of time before an effort towards some solution solidifies into real standards. Information on sharing is still an essential element in stemming the tide of fraud. Then, either a third-party verification system for affiliates, merchants and networks will be created, or some type of software or list that may be subscribed to will arise. Here is one affiliate manager who is waiting with bated breath and ready to assist.
By Danay Escanaverin
www.EcommerceTimes.com
Part of the ECT News Network
08/23/05 5:00 AM PT
Danay Escanaverino is the Marketing Manager for Filinet.com, a division of Global Resource Systems.
http://www.technewsworld.com/story/45487.html
Posted by Hans A. Koch at 05:00 AM | Comments (0)
August 18, 2005
Click Fraud Claims Drive Lawsuits
A few years ago, Diane Frerick and Kevin Steele, co-founders of Karaoke Star, a Phoenix-based karaoke equipment seller, were on their way to $3 million in annual revenue. Then, in the summer of 2003, things came crashing down.
They owed much of their success to paid search advertising on Google and Yahoo Overture. By bidding anywhere from 40 cents to $3 for keywords revolving around karaoke (such as "karaoke player" or "karaoke song"), Frerick and Steele were able to generate $6,000 a day in sales from $2,000 in advertising, and were watching business grow at a brisk clip -- 35 percent a month compared with the year before. They dreamed of becoming the Home Depot of karaoke.
Then, in the summer of 2003, things came crashing down. Suddenly, the number of clicks on certain keywords jumped from 200 to 800, forcing Karaoke Star to burn through its advertising budget, but $2,000 in advertising yielded just $3,000 in sales. "Our orders went up thousands a day but our bills went up thousands a day," Frerick said. "The increased business cost more than it was worth."
Karaoke Star was a victim of click fraud, a web phenomenon that has been attracting increasing attention. In a way, it's like hordes of virtual ne'er-do-wells impersonating potential shoppers and generating a small fee every time they look at an advertisement. Over time, it can really add up. Karaoke Star estimates it lost close to $500,000 to click fraud. That led Frerick and Steele to plan legal action not just against the company they thought was trying to drive them out of business, but against Google and Overture. (Although all the parties have been served with papers stating Karaoke Star's intent to sue, the case has not yet been filed.)
Of course, Frerick and Steele aren't the first to lose money on fake clicks and hire a lawyer to extract their pound of flesh. Earlier this year, Lane's Gifts and Collectibles, a gift shop that advertises on the web, sought class-action status for a lawsuit against 11 search engines including Google, Yahoo, Ask Jeeves and Lycos, claiming they gouge advertisers. (Wired News is owned by Lycos.) In June, Click Defense, which sells click-fraud auditing tools, sued Google, claiming click fraud cost it a cool $5 million.
Although there's no way to know what percentage of clicks on keyword ads on search engines are fraudulent, estimates range from single digits -- that's what the search engines say -- to 20 percent to as much as 35 percent. Click fraud could even threaten the paid search industry's entire business model. At least that's what George Reyes, Google's chief financial officer, said last year in widely publicized remarks.
Those that stand to gain the most are search networks' content partners, which receive commissions on these fake clicks, and the search engines themselves, because they profit whether ads are legitimate or not. It could be a single user, or a team of users, repeatedly manually clicking on an ad. More likely, the fraud is the product of automated "hitbot" software.
Don't count on the search engines to confront the problem, though. Sure, they pay lip service to cleaning up click fraud, and issue credits -- not refunds -- to businesses they identify as having been victimized by false clicks. Usually, however, these refunds are a pittance compared to the revenue click fraud generates for them.
ecently, BlowSearch, a small meta-search engine based in Brooklyn, New York, beta-tested an application that successfully blocked fraudulent clicks and watched its own traffic plummet, according to a former employee of the company. You can bet that Google and Overture, the two biggest engines on the block, have little desire to repeat this experiment, especially since paid search brings in billions of dollars in revenue for both companies.
For small businesses like Karaoke Star, such widespread, easy-to-perpetrate fraud threatens their very survival.
Frerick and Steele, after sifting through thousands of pages of click data, suspected the culprit was Ace Karaoke, a rival headquartered in City of Industry, California, which entered the business at about the same time the click fraud started. To test their theory, Steele bid on a keyword for a fairly obscure karaoke product that went for 10 cents a click. That day, four people clicked on it. Then Ace Karaoke started bidding on that same word. They went back and forth until Steele raised the bid to $2.95 a click and Ace Karaoke dropped out.
"Then I got slammed," Steele said. "The next day the number of clicks went from four a day to 95, then 91."
Another piece of evidence came from Overture, which inadvertently included an excerpt from an internal investigation that fingered Ace Karaoke as a source of illegal clicks in a Feb. 19, 2004, e-mail to Karaoke Star. Frerick and Steele sent three follow-up e-mails to Overture about the investigation but Overture never responded and subsequently revoked Karaoke Star's status as platinum members without explanation.
But it wasn't until a former employee of Ace Karaoke e-mailed Frerick and Steele a video demonstration of Ace Karaoke's hitbot software in action that they decided to take legal action.
To prove its accusations of click fraud, however, Karaoke Star requires hard evidence -- and that can only come from the search engines, which store vast amounts of pay-per-click information. But they are loath to share it.
"It's frustrating because they're the ones with the data to either show this is happening or isn't happening, yet they won't give it out unless we pull teeth," said Jonas Saunders, one of Karaoke Star's attorneys.
Neither Google nor Overture would comment on the allegations or Karaoke Star's plan to sue. David Sue, founder of Ace Karaoke, denies the charges, and claims he too has been victimized by click fraud.
"Someone is trying to frame us," he said.
By Adam L. Penenberg | Also by this reporter
02:00 AM Aug. 18, 2005 PT
Adam L. Penenberg is an assistant professor at New York University and the assistant director of the business and economic reporting program in the school's department of journalism.
http://www.wired.com/news/culture/0,1284,68559,00.html?tw=wn_11culthead
Posted by Hans A. Koch at 02:00 AM | Comments (0)
August 15, 2005
Click fraud is Internet advertising's new plague
Pay-per-click ads may be too costly, not worth the investment
While the Internet is capable of providing unparalleled visibility for your practice, it has always been plagued with problems. The endless mounds of spam that make it to our inboxes are just the tip of the iceberg. Nevertheless, for today's physician, the Internet is the most important place to advertise.
To demonstrate where your advertising dollars are best spent online, this article will discuss both spam and click fraud, an emerging and perhaps more ominous crisis in Internet advertising.
Spam and other illnesses
Many experts believe spam poses the biggest threat to businesses that have an online presence. According to Brightmail Inc., a major vendor of anti-spam software, roughly 40% of all e-mail traffic in the United States is spam, up from 8% in late 2001 and nearly doubling in the past 6 months. By the end of this year, industry experts predict, fully half of all e-mail will be unsolicited. The armies representing the Internet's good guys may never be able to defeat the spammers.
Spam's opportunity costs collectively represent the greatest cost to employers using the Internet as a business tool today. The band width (Internet load) that spam occupies—along with the equipment, software, and manpower to handle it—represents the second biggest cost. According to Einstein Medical's internal calculations, this accounts for about 11% of the total money allocated by companies to provide e-mail services to their employees.
As costly as spam is, a new breed of crooks that may be even more dangerous than the spammers has been growing steadily over the past 5 years. Click fraud is the game and pay-for-click advertising is their ballcourt. The players could be your competitors. To understand the what, how, and why of click fraud, we need to revisit the story of the Internet itself.
Internet advertising
Internet advertising has undergone some dramatic changes since the launch of the first major search engine, Yahoo! in 1995. The first form of online advertising, known as "general run advertising," came about in the mid-1990s. This early stage of Internet marketing was not very targeted; in fact, the banner ads that appeared at the top of search engine results pages had no correlation to the search terms that produced the results.
For example, if a person searched for "LASIK," a Visa ad might come up on the results page. Conversely, searching for "Visa" could just as easily produce a LASIK banner ad. These advertisements were sold on a cost-per-one-thousand impressions, which is very similar to how TV advertising is sold.
The next wave of Internet advertising began in the mid- to late-1990s and centered on "key word search," a method that proved much more effective for advertisers and consumers alike. Key word search made it possible for potential patients to find advertisements pertaining to the searches they were conducting. When consumers searched using the term "LASIK," an advertisement that dealt specifically with LASIK would appear. Key word search provided a greater return on investment for advertisers and a greater search engine user experience for consumers.
The main problem key word advertising posed for search engines was cost. Many factors, including the number of small advertisers wanting to buy key words, the complex artwork required to design key word advertising, and the management associated with these factors, made key word advertising a very labor-intensive approach.
A successful overture
In 1999, Overture came into the market with what seemed like the answer to the administrative headaches of key word advertising. Overture's auction-based, pay-per-click (PPC) advertising eliminated the ingredient causing most of the pain—human beings—and replaced it with automated software.
Along with the two other major strategies used to achieve visibility on the search engines (Internet directories and search engine optimization), pay-per-click advertising's software-driven bidding process has enabled advertisers to get more visibility on the search engines. Potential advertisers simply navigate to the advertiser section of the search engines to start the bidding process. The highest bidder gets a link at the top of the search results page. Advertisers with lower bids appear further down in the results (the lower the bid, the further down).
This bidding process is similar to traditional auctions in some ways and dissimilar in others. Like traditional auctions, of course, the bidding for pay-per-click auctions goes higher for more valuable items. For example, on Overture the winning bids for the search term "laser vision correction" are much higher than for "hand surgery." But unlike traditional auctions, the winning bidder in pay-per-click auctions doesn't get to keep the spoils forever. In fact, the bidding for pay-per click auctions is perpetual, meaning you are only as good as your last bid! The bidding keeps going, with no permanent winner.
Pay-per-click leads to fraud
The advent of Overture's pay-per-click model had a colossal effect on the search engine world. Seeing the success Overture was having, in August 2003, search giant Google scrapped its old key word advertising strategy and created the pay-per-click-driven Google AdWords. Today, MSN is the only major search engine that does not have its own proprietary pay-per-click bid model strategy (although Overture advertising does exist on the MSN search results).
The effect of this Internet revolution on advertisers has been a mixed bag. While Internet visibility can now be achieved with the click of a button (more like the swipe of a credit card), advertisers are also much more likely to become victims of fraud. People with few scruples can click on their competitors' pay-per-click ads every time they see them on the search engines. If your latest bid is $5 per click, and a dishonest competitor clicks on the pay-per-click advertising 10 times, your bill suddenly becomes $50. If someone clicks on the advertising 50 times, it would be $250.
This is click fraud, and it's the reason pay-per-click advertising is a realm you may want to avoid. Disturbingly, our contacts in the field of Internet advertising estimate that 30% of pay-per-clicks are fraudulent. (Incidentally, that's one-third more money in the pockets of the search engines, which are loathe to crack down on the perpetrators of click fraud.) This statistic is particularly sobering when you consider that pay-per-click advertising has only existed for 5 years. Spam e-mail, currently the industry's biggest aggravation, makes up 40% of all e-mails—but it's been around for 10 years. At this rate, pay-per-click fraud will undoubtedly surpass spam as the number-one problem of Internet advertisers. And this calls into question whether pay-per-click advertising itself is worth investing in.
With less problematic, more effective Internet strategies like directories and search engine optimization available, why bother?
Aug 15, 2005
Ophthalmology Times
http://www.ophthalmologytimes.com/ophthalmologytimes/article/articleDetail.jsp?id=175972&pageID=1
Posted by Hans A. Koch at 09:59 AM | Comments (0)
August 11, 2005
Hacker Teaches Click Fraud At Conference!
I received a frightening email from one of my readers today following my newsletter titled:
The Great Google Meltdown.
Phil writes...
I expected to see this story break soon.
Two weeks ago, I attended Defcon 13 in Las Vegas. If you dont know Defcon is a annual hacker conference that is held the weekend after the Blackhat Briefings. A well known “hacker” (I use the term loosely, I think the guy is LAME) who has a following thanks to podcasting and blogging did a presentation called Hacking Google Adwords
.
During this presentation he covered much of what the marketing community has known for a few years already. He also went on to talk about the week security in Adwords and the fact that you can bump off the competition or companies that you have something against.
Long story short. He didnt mention CaCa but he did tell people it would be easy to script something that would simulate clicks and rotate proxy lists.
The problem with this is he introduced this to a room full of hackers and wannabes who never heard of this before. The information was not ground breaking, however, this kid managed to get a standing ovation.
My point in all of this?
The problem was just made worse and
I would expect to see new tools coming out over the next few months that make this easy for everyone to exploit
.
The word is out!
Yep. And click fraud will explode even more as hackers see the $$$ involved.
The speaker at the hacker conference has posted his Powerpoint presentation [Note: the presentation is from a hacker SCAN the thing for viruses!] and an article for you. The article was published in 2600 magazine which is THE magazine for hackers.
There are a shitload of podcasts out there that TEACH hackers how to screw you out of your ad dollars. And that should scare the piss out of you. Because it is only going to spread the word on how to do it…
Posted by Jason at 06:59 am
August 11th, 2005
http://goldblogger.com/wordpress/archives/hacker-teaches-click-fraud-at-conference
Posted by Hans A. Koch at 06:59 AM | Comments (0)
August 08, 2005
Google AdSense Fraud - How To Protect Your PPC Account
It's worthwhile to examine Google's definition of Google
AdSense and Click Fraud , before delving deeper into "AdSense Fraud" .
Google AdSense fraud is one of the diseases that plague the Ad
Words advertisers.
The AdSense program essentially allows website
publishers/owners to sign up with Google, enabling them to display
Google Ads on their sites. These publishers essentially act as "Google
Partners". The ads chosen by the Google bot for display are contextual
and the ads are related to the contents of the publisher's website,
more specifically that particular web page. The intent for Google is to
capitalize on the traffic to these (in practice) niche sites and
provide highly direct targeted traffic to the advertiser. A subset of
the users of the Google Partner website, click on those ads and Google
charges the advertiser per click. Google shares the booty with the
website publisher but the revenue sharing ratio falls under Google's
"undisclosed "criteria. While the exact amount can be reverse
engineered, the take home lesson is that the final amount is
proportional to Google's income from that click.
In theory it's a match made in heaven. The advertiser gets
good ROI through targeted traffic, the publisher gets to monetize the
traffic on their website and the web browser gets to buy that classic
CD that he couldn't live without. Not to mention that Google gets a wad
of cash. The gods of lucre smile beneficently on all.
Unfortunately, this happy façade hides blemishes. Severe
ones. For all Google AdSense Publishers are not created equal. While
(we daresay) many advertisers have a genuine website, providing a
valuable or interesting service to the world wide community, there is a
significant number of unscrupulous operators who are out there to prey
on the advertisers. These creatures of the night (and we will explain
later why we use that term), make websites for the express purpose of
milking AdSense revenue.
This category of fraudsters deserves a taxonomy of its own,
which we have developed (the other categories, click fraud and
impression fraud are even bigger problems in some industries). In the
interest of not being gender biased, we have alternated between
genders. We hope that our lighthearted tone does not mask the revulsion
that we feel towards these cheats.
Regressive Fraudster ( aka ClickMonkey ):
This guy is at the bottom of the food chain. Inspired by the
riches of his neighbor Ms. Jones, who has been making more than ten
grand a month in AdSense revenue, he plans a course of action. He
"invests" in a clickbot software( a simple google search reveals many)
and gets a list of anonymous proxy addresses. He then goes to register
a few domains and hires someone off of elance to create a "network of
sites"and " click bot " . He hopes that the interlinked sites will
provide each some "link popularity" and increase his page rank. If only
it were that simple! He then proceeds to use the $30 clickbot to start
clicking on the sites. Or he could click on them himself manually using
the proxies. We don't call him click monkey for nothing. He clicks and
clicks all the way to see his account getting banned. No banana for
this monkey! His calls of despair to google fall on deaf ears. This
person is likely to quit, but sometimes retries to get up the food
chain, the Wanna -Be-Fraudster.
Wanna -Be Fraudster ( aka BOZO):
This girl searches for high paying keywords like "home loan
equity" (current ad words rate: $45), or "web hosting" (ad words
costing $20). She correctly guesses that the AdSense payout is
proportional to what Google earns and therefore homes in on such words.
Her strategy is to make a page with contents that are appropriate for
the targeted high payout keyword. She moves ahead by clicking on the
link multiple times and recruits friends and family to give them a
click. Or ten!
Little does she know that Google has a 45 day inspection
period before she get her nubby little fingers on that cash. With
little to no knowledge of Click through Ratio , her greed couples with
her ignorance. Seeing her ill-gotten paper wealth multiplying in her
AdSense interface, she increases the clicks. Google however inspects
the CTR and throws a fit when they see a CTR exceeding 20%.
Furthermore, Google notices clicks mostly originating from a few IP
addresses and that essentially seals her fate (or rather docks her
earnings). That virtual cash is now just some deleted bytes on a hard
disk on Google's servers. She moans, nay she rail against the cruelty
of Google's policy. Some of these people wisely cease and desist such
activities, perhaps philosophizing about the NFL (no free lunch)
theorem. Others however see it as ground school for the next stage of
nefarious behavior. The Almost-There Fraudster.
Almost-There Fraudster ( aka SmartAlec ):
The archetypical ATF is supremely confident in his ability to
fool Google. Like the BOZO, he looks for high paying keywords and makes
appropriate website(s). Let's assume that he is in a third world
country, just to make the case more interesting. The case described
here is 1 year old news. He has read this article and taken the learnt
the subsequent lesson . He knows that that the clicks from the IP
Addresses of USA, UK & Canada are worth much more than the clicks
from the IP Addresses from the third world countries. He therefore
seeks to befriend people from such IP addresses by logging onto
messenger services.
This way, he gets the unique, unrelated IP clicks and (he
hopes) that Google is fooled. Remember "creature of the night". Well,
these people typically are more than a few time zone removed from the
US or Canada and therefore are up at odd hours whenever they feel that
their targets are most likely to be active. Plus they sometimes have to
deal with "inconveniences" like a day job.
AT fraud thinks that the clicks he obtained by trolling on
these sites is a job well done. He has got clicks from the IP address
of his choice .. An interesting factoid is that for AdSense, state also
matters. Clicks from Washington and New York State have the highest
payout for AdSense Fraud.
He has just one problem. His tragic flaw. While he worked so
hard to get the unique IP and high earnings, he is not able to maintain
a good CTR. He is likely to cross the limit of 30-40% of daily CTR and
10-20% of overall CTR. He ends up in the same purgatory as the BOZO.
The account is banned, and he gets the abominated email. Yes, the
"AdSense account closure". Almost-There is never good enough in this
nether world of AdSense gaming. Although it is possible that he would
have made a few thousand dollars before the punishment catches up to
his crime. Crime doesn't quite pay, now does it? Well, gentle reader,
unfortunately crime _is_ paying to the next category. Fraudster Maestro
( aka Satan's Spawn).
Fraudster Maestro ( aka Satan's Spawn):
This category of fraudsters is the most sophisticated and
rarely gets caught by google . She has researched the high paying
keywords as well as the CTR issues well. She has the smoothest lines in
the business of soliciting clicks. She can flirt online, and ask to
click the "link" for her picture. Or she may claim that clicking the
link causes the hungry child to be fed in Ethiopia . Let's follow a
typical "simple" chat session:
US User : hello
FM Fraud: what are your coordinates, handsome?
US User : NY , NY
FM Fraud: Oh! Wish I could be there. Can you help out a damsel in distress?
US User : sure
AT Fraud: I have made a site and want to see if all the links
on this page are working or not. Can you please click on the links and
see if the other page loads?
US User: Sure. Link?
FM Fraud:www.fraudstersite.com/high-value-keyword-page.html
US User : wait! Yes I checked all the links and they are working fine.
FM Fraud:
Thanks
US User : so can we talk about you now? ( Message Not Delivered
as the fraudster has blocked the User and is busy looking for a new
victim)
And she has lots of tricks up her repertoire besides chatting
up strangers. She knows about opt in lists, usenet and blogs where she
can snare the victims. Technically savvy and able to empathize with her
victims she doesn't let arrogance get in her way to success. Since she
is very mindful of the CTR issues she has a secret weapon. She has
optimized her site for some low paying keywords which are really not
competitive. She organically gets lots of traffic (but for things
unrelated to those competitive high paying keywords). In her website,
she may be giving away free greeting cards Or free screensavers. End
result is a fabulous impression count. The second step for her is to
makes unrelated pages on the same site and these pages pertain to the
high paying keywords. These keywords are used to attract the victims of
chat sessions. The process of getting the clicks is different but the
results due to CTR are very lucrative.
So, how does all this geek talk affect the PPC advertiser?
It's a $5 billion+ dollar market(for exact projections onto the future,
please check out our FAQ, and with a 20% + fraud rate, we are talking
about a 1 BILLION dollars fraud per year. Even Dr. Evil may be
impressed by such a number. It's greater than the cumulative GNP of a
few banana republics. And a fair chunk is ending up in the coffers of
these fraudsters. We know from anecdotal evidence, how people are
clearing up to 20 grand a month. All, courtesy of the hapless PPC
advertiser.
We want to emphasize that there are lots of authentic sites
serving genuine content. But unfortunately the existence of these
people (as discussed above) reduces the ROI of many advertisers to the
extent that they rethink their interest in PPC. In the word of one of
our organic SEO customers, with PPC "you always get a little less back
than you put in". It needn't be that way, if you watch carefully where
your ad words traffic is coming from and take some steps (such as
traffic analysis or at the very least a log file analysis) to protect
arm yourself. Look for patterns, some of which are obvious(such as
large traffic spikes from India). Unfortunately other patterns may
require a doctorate in artificial intelligence. Still the keyword is to
stay nimble. Convincing search engines to refund money is a lot tougher
and a lot more work than proactively watching for problem visitors and
taking steps that you deem appropriate. Before the situation goes out
of hand. Remember, an ounce of prevention…
Have we started a revolution?
We have been getting a lot of email from adsense publishers,
not all of it complimentary regarding our piece above. We will be
writing a piece from the point of view of the publisher and the issues
that they face. Meanwhile, send your comments to:
no-fraud-zone@sofizar.com
About the Author:
Aamir Farrukh is an experienced SEO professional working with a US Based company sofizar that is currently developing a click fraud solution applying Computer Science, Statistics, Economics and Behavioral Sciences.
Aamir Farrukh | Contributing Writer | 2005-08-08
Posted by Hans A. Koch at 10:19 AM | Comments (0)
August 04, 2005
Interview with the AdSense million dollar man, Jason Calacanis
When Jason Calacanis wrote in his blog that he was on schedule to make a million dollars with Google AdSense over the next twelve months, he created a phenomenal buzz about the financial possibilities of running AdSense on blogs, as he does on his Weblogs Inc. network.
If back in September when we started playing with Google Adsense someone told me it would turn into a $1M a year business I would have laughed. A million bucks without a sales person? Give me a break!
However, yesterday we broke our $2,100 record with a $2,335 day. That’s an impressive number I know, because if we can take that number to $2,739.72 we’re at—wait for it—$1M a year.
I asked Jason if he'd care to answer some questions on how he does it, he graciously did just that, sharing his thoughts, ideas and advice on AdSense.
Why did you decide to try out AdSense back in September?
We were launching blogs quicker then we could sell advertising, so we figured we could either give the ad space away (like magazines do) or we could try to make a little money from it with 3rd party ad networks like AdSense, Tribal Fusion, Fast Click, and Burst.
Did you initially place AdSense on all pages, or did you gradually add it over time? Do all pages on Weblogs Inc now run AdSense?
We started with a couple of blogs and then quickly put it all over the network.
What single change do you think made the biggest leap in your AdSense income?
1. Taking off the borders around the advertisement
2. Making the links the same color as the links on the blog
Why did you select the ad unit location that you did? (Curious because it is not generally a high CTR position).
We were sold out of leaderboards on our big blogs, so we figured we could slip the thin horizontal banner without it feeling like too much advertising. People tend to like--or not care about--Google Adsense ads. Which is great compared to graphical banners which people sometimes hate.
How successful have you found rotating the ad unit colors to combat banner blindness?
Never tried that... thanks for the tip!
You use channels on your sites, do you also check your channel reports on a regular basis? Have they helped you with making decisions regarding AdSense?
We do channels for each blog, and now we are doing channels for each position on each blog. This is a lot of work because we have seven positions across 80 blogs. I wish Google Adsense would automatically do reports by format (anyone listening over there?!).
How do you balance the user experience versus advertising revenue? Do you deliberately chose the less intrusive AdSense ad formats on Weblogs Inc?
We don't like to abuse our users. We like to give a lot of content on one page (15 stories), and keep the heavy advertising up top. So, after the first page down your past most of the advertising.
You mention that your AdSense revenue would be higher if it wasn't for advertising commitments already made on blogs such as Engadget. Is AdSense successful enough that you plan to place AdSense in those more prominent ad spaces when they become available, or is the current secondary placement on those blogs working well enough?
AdSense doesn't reach the level of display advertising ($3-12 CPM) and it never will--unless Google started selling display advertising! Wait a second... that's a really good idea!
Do you ever worry about someone attempting to target you for click fraud?
Not at all. Google has the issue totally under control. Besides, the advertisers correct click fraud by lowering the price of each click by what they think the cost of fraud is. So, if people were paying $1 per click, and they thought 5% were fake they would move their bid to .95. This is why the whole issue of click fraud is overblown: the advertisers look at the results and bid accordingly! People who bring up this issue--like the press--don't understand that Google Adword buyers are very, very smart and take into account a certain level of fraud.
Every system has fraud, look at credit cards! Should we stop using credit cards just because there is massive fraud? No, because on a percentage basis it is manageable. There is an acceptable fraud level in any economic system and we balance the freedom of having a credit card with the fact that someone could scam the system.
Do you plan to test Yahoo Publisher Network when it becomes available? What will be your deciding factor when choosing between the two - strictly revenue or something beyond that? What about some of the other contextual ad networks on the market?
This is all about performance. If Yahoo Publisher Network makes us more money we will give them the inventory. However, we don't have all the time in the world to swap out these networks all day long, so we can't try every ad network out there.
In fact, I've been telling the smaller ad networks that come to us now that they have to give us a "floor CPM." They would pay that floor rate in advance in order for us to even test their network. Out of the 10 ad networks I've told this to 8 think I'm crazy and two are considering doing it. So, I'm making some progress. :-)
In another year large publishers with quality products are going to be able to demand a minimum "floor CPM." Some folks might be getting this already. I would love to see Google or Yahoo say "we're gonna pay you at least a .25 CPM for your traffic, or 65% of the value of the clicks--whichever is greater." They could give you a report each month with both results.
If someone is going to beat Google at this game that is how they will do it, with a guaranteed minimum CPM. If I were trying to beat Google I would do three things: 1. disclose the % of the split, 2. give a floor CPM, and 3. direct sell CPM based advertising on top websites. In other words, add the direct selling that BlogAds or Tribal Fusion does to what Google already does. Then an advertisers could say "I'll pay a $5 CPM for the top leaderboard on your site, and .50 for ever other click you can get on your site."
That is the future: blended buys through one ad network.
I'm sure Google and Yahoo will offer this in the next year.
What is the best piece of advice you have for a publisher brand new to AdSense? What would you have done differently when you started with AdSense, knowing what you do now.
I would have run four ads per page, taken off the borders, and made the links the same color as the links on the blog. I would have also made channels for each position and blog so I could track things better.
How many times do you login to AdSense a day? Are you a stats junkie who checks every ten minutes? Or do you check only once or twice a day?
I have about 50 saved Adsense reports in a folder on my Opera browser. Every day I click on it and autoload the 50 pages. I then scan and look for trends. Sometimes I find a CTR spike or an eCPM of note. However, it's pretty steady at this point.
The best thing you can do to make more money is produce world-class content. That's what I spend my time on: finding people who can make world-class content... and pay them!
How successful have the AdSense for Feeds ads in your RSS been? Have you had a problem with readers not wanting ads in their feeds from you?
Like three folks were upset about RSS ads. Now, we have millions of people coming to our sites every month so we're not going to stop the revenue for three freaks who want free content without advertising (don't we all want that?!?!).
If you did a survey and asked people watching Desperate Housewives if they would consider paying to have it without commercials people would say yes. You could ask the same group if they would like to save money by watching the Sopranos for free with ads in it and they would say they would consider it!
Ads in RSS are no big deal. They are just like banners or text links on a web page. If you produce great content people will deal with the ads, and if you produce really great content a certain percentage of those folks will pay for the content (if you want to go that route). So, it's important that when you're running a business you ignore the freaks and listen to the real fans. Real fans of the site understand you need to make money in order to produce free content, and those real fans even visit the advertisers and buy their products knowing that it will support the product they love.
Jason will be at Search Engine Strategies next week in San Jose, and will be joining myself on the Earning from Search & Contextual ads session. You can read a bit more about the session here.
Thank you Jason for the interview!
August 04, 2005
http://www.jensense.com/archives/2005/08/interview_with.html
Posted by Hans A. Koch at 04:46 PM | Comments (0)
August 03, 2005
Should Keyword Arbitrage Be Called "Click Pimping"?
I have a friend who calls keyword arbitrage - the practice of buying cheap clicks on one PPC engine and then collecting a higher CPC based on ads served (and clicked often enough) on a content-oriented site - "click pimping."
I take it this term is at the level of oral folklore only at this stage, and hasn't found its way into general usage (only two instances of it in the Google index, so if I've actually mentioned it here before, well sorry... I need Google's index to act as my memory bank...).
Well, good. I'm glad this silly term never caught on. (Sorry, Mike... really just needed something keyword-rich to post about today... and keyword arbitrage was it... hope you understand.)
Some points:
1. It's nothing new to buy advertising ultimately to sell advertising. There is nothing inherently wrong with a publication using search marketing for customer acquisition. That's not arbitrage, it's targeting.
2. In the case of sites that don't add much genuine value, the question becomes one of traffic quality. Specifically, how can these sites turn a profit if they are buying clicks and only a small percentage of visitors actually click on something? Unless their conversion rate of click to click is really high, they'd need to be getting $1 per click in revenue for every dime spent on clicks, you would think. Not really. Some of these publishers do have totally legit conversion rates of click to click of 50% or higher, because some of their readers might click on five or six different paid links, bringing up the average. However, a small minority of these sites are committing systematic click fraud. It will take more than sticks and stones namecalling or a slap on the wrist to stop these bad apples. They need to be prosecuted.
Click pimping? No. Call it what it is. It's either a perfectly legitimate targeting strategy, or in some rare cases, it's a cover for out-and-out click fraud. Calling it click pimping gives it a dangerous, nebulous middle-ground cachet that would serve to needlessly attract certain louts, and needlessly dissuade quality publications from buying ads low, to sell them high.
Pimp on!
Posted by Andrew Goodman
Wednesday, August 03, 2005
http://www.traffick.com/2005/08/should-keyword-arbitrage-be-called.asp
Posted by Hans A. Koch at 04:42 PM | Comments (0)
August 02, 2005
As Much as 29.5 Percent Click Fraud in Google's Pay-Per-Click Search Engine
Reports MarketingExperiments.com; New Research Published in The Marketing Experiments Journal Sheds Light on Growing Click Fraud Problem
ATLANTIC BEACH, Fla. --(Business Wire)-- Aug. 2, 2005 -- Research recently published in MarketingExperiments.com's online publication, The Marketing Experiments Journal, reveals up to 29.5 percent of paid search traffic may be fraudulent.
"From our research, we found that it is unlikely an individual committing click fraud by clicking an ad over and over will go undetected by Google," said Flint McGlaughlin, director of MEC labs. "But our research also shows that when more sophisticated systems and software are used, only a small percentage of the fraud is detected, with fraud increasing proportionate to the bid price."
The click fraud research brief can be found at www.MarketingExperiments.com and outlines what click fraud is, how significant of a problem it is and how it can successfully be avoided.
The experiment was conducted in conjunction with Los Angeles-based Clicks2Customers.com and focused on three pay-per-click (PPC) campaigns running during a 10-day period in 2005. Duplicate clicks were determined by comparing IP addresses, language, browser settings, referring URL, time of click, operating system, browser plug-ins and country of origin.
"Our random sample of PPC campaigns uncovered as much as 29.5 percent PPC fraud and showed that Google was able to account for and credit only a tiny portion of those fraudulent charges," McGlaughlin said. "Whether it is click fraud or the lesser known impression fraud, these fraudulent clicks can cause a lot of damage to advertisers because it drains their budgets. Companies should be aware of how big of a problem it really is and be equipped to more aptly detect it."
MarketingExperiments.com is an online research laboratory that determines which online strategies and tactics really work in Internet marketing. Results of its experiments are published for free online in The Marketing Experiments Journal.
Those interested in finding out more about the pay-per-click fraud problem can visit: www.MarketingExperiments.com.
About MarketingExperiments.com
MarketingExperiments.Com (MEC) is an online marketing research laboratory dedicated to discovering "what really works" in Internet marketing. MEC engages in primary and secondary research and publishes results in The Marketing Experiments Journal. To conduct relevant, practical experiments, MEC partners with clients such as the New York Times, Reuters News Service LLC, and USA Health Care. MarketingExperiments.com is a member of the MEC Labs Group and a division of Digital Trust, Inc. For more information, please visit www.MarketingExperiments.com.
[August 02, 2005]
http://www.tmcnet.com/usubmit/2005/aug/1169316.htm
Posted by Hans A. Koch at 05:32 PM | Comments (0)
MarketingExperiments Survey Finds High Click Fraud Levels
One of the biggest scourges to the pay-per-click method of advertising is the threat of fraudulent clicks and with the growth of things like foreign click fraud farms, this concern has become even more magnified.
Even Google stated in one of their IPO amendments that fraudulent clicks of text ads was one of the bigger threats facing their revenue generation process. From Google's second amendment: "If we fail to detect click-through fraud, we could lose the confidence of our advertisers, thereby causing our business to suffer." As you can imagine, click fraud is something Google takes quite seriously. You can imagine their collective reaction when news about the MarketingExperiments.com survey broke.
MarketingExperiments Survey Finds High Click Fraud Levels According to the MarketingExperiments.com study (and subsequent press release), as much as 29.5% of clicks on Google's AdWords ads could be fraudulent. The blame for this increase falls on the aforementioned click fraud farms as opposed to the web owner who's clicking his/her site ads in an attempt to boost profits. This is made apparent by Flint McGlaughlin, director of MEC labs, who says:
From our research, we found that it is unlikely an individual committing click fraud by clicking an ad over and over will go undetected by Google. But our research also shows that when more sophisticated systems and software are used, only a small percentage of the fraud is detected, with fraud increasing proportionate to the bid price.
To derive their position, MarketingExperiments conducted their study with the help of Clicks2Customers.com and focused on three PPC campaigns that were running during a 10-day period. Duplicate clicks were determined by comparing the IP address of the clicks acquired by the campaigns in question.
As of this article, Google had not responded to the results found during the MarketingExperiments survey, but one can expect the company to be concerned, especially if the ME findings turn out to be as accurate as their data indicated. For more on what Google considers to be a fraudulent click, please read their AdWords FAQ.
About the Author:
Chris Richardson is a search engine writer and editor for WebProNews.
Chris Richardson | Contributing Writer | 2005-08-02
http://www.webpronews.com/insidesearch/insidesearch/wpn-56-20050802MarketingExperimentsSurveyFindsHighClickFraudLevels.html
Posted by Hans A. Koch at 05:22 PM | Comments (0)
Putting an End to Click Fraud
Carat's Ron Belanger exhorts the second tier search engines to embrace CPA -- and shows us how everyone would benefit if they do so.
Every once in a while, I'll get a call from an analyst, a client or an industry peer looking to get some information that could signal the end to the search marketing boom. One buzz phrase that naysayers have embraced recently is "click fraud." Largely misunderstood, click fraud is by no means the David that can bring down the Goliath of search. As long as everyone plays their part, that is, and the industry does away with a very one-sided pricing model.
In looking at click fraud from a search marketing perspective, it becomes abundantly clear that there exists a large delta between the two juggernauts and the rest of the industry. The systems put in place at Yahoo! search marketing and Google do a comprehensive job of proactively mining referral data to identify any traffic that seems suspicious. This fraudulent traffic is then credited back to the marketer, all without the need for arbitration, disputes or lengthy ordeals. Since the majority of search marketers don't explore their options beyond Yahoo! and Google, most people do not need to worry themselves about this issue.
For marketers who embrace a more comprehensive distribution strategy, click fraud does begin to take form in a material way. Many of the smaller distribution engines, such as FindWhat and Kanoodle, have less sophisticated fraud detection systems in place. In the past, we have seen FindWhat drive the same volume of traffic, if not more, than Google on the same keyword portfolio. If Google represents roughly 55 percent of the market (including AOL), and FindWhat somewhere around one percent, a third grader could see that there might be something fishy going on. Once the difference in conversion rates is analyzed, it becomes clear that much of the traffic a marketer is paying for is not derived from genuine human beings earnestly clicking on your paid search listing.
Here is an example from one of our clients. This client runs a mature search marketing campaign based on a target cost per acquisition. In looking at year-to-date data, we see that their average conversion rate from search is 2.35 percent. For some of the Internet Yellow Pages (IYP) sites like Verizon Superpages, it is closer to a six percent conversion rate. However, the FindWhat channel comes in at just 0.26 percent for the year, making it a channel that we can no longer justify managing. It pains us to do this as there are some legitimate sales that are coming through this channel. Everyone loses in this situation. FindWhat loses revenue; our client loses some incremental sales, and our team ends up frustrated as they are unable to use all search distribution channels that are available to them.
Anytime there is an alignment of business goals such as the scenario above, a solution should be easy to reach. In the case of click fraud, there is an unfair assumption of risk that lives on the shoulders of the advertiser. The advertiser buys from a certain channel with the assumption that what they are buying are actual searchers and not an automated script or team of manual clickers somewhere offshore. It isn't until after the advertiser spends their marketing dollars and analyzes the data that they realize that the traffic is not quality traffic. A solution lies in the risk being shifted from advertiser to publisher, in the case of the second tier engines.
Let's stop for a minute and look at how our offline brethren tackle the risk issues at the television upfront.
During the annual boondoggle known as the upfront, a season's worth of television advertising is purchased in a frenzied week of late nights, endless parties and celebrity hobnobbing. Advertisers buy certain programs for their anticipated audience. Obviously, there is a high degree of guesswork being done when the audience numbers are applied to a given show. While the television upfront has its share of critics, the one aspect to it that does make sense is the concept of "makegoods." Makegoods are the networks' way of putting some skin in the game. Say, for example, next season's version of "The Apprentice" is a real stinker and only half of the anticipated audience tunes in. The network then has to deliver the promised audience that the advertiser paid for. This can be done by providing advertising time on other shows, or an extended run on the same show. Either way, the advertiser ends up getting the audience they desired. It is the one aspect of the television upfront that I think the online community should embrace.
Imagine for a moment that the Tier 2 engines all abandon their Cost Per Click (CPC) pricing model in favor of a Cost Per Action (CPA) model. Rather than sticking the advertiser with all the risk, the search engine would pick up the risk and put its money where its mouth is. This would fundamentally change the way in which search marketing is budgeted, forecasted and planned. First of all, the traditional model of initially launching with Yahoo! and Google to figure out a keyword portfolio -- and then migrating to the second tier -- would disappear. Search marketers would first launch with the Tier 2s to establish what phrases, categories and creative are the most salient for their audience. Only after some solid analysis of performance on Tier 2s would an agency recommend the higher risk (though higher volume) options of the larger engines. This would lead to a larger number of advertisers participating in campaigns with the likes of FindWhat, Kanoodle, Enhance and others.
To maximize revenues, the search engines could migrate to a dynamic pricing model, albeit on the CPA side. Rather than having click bid tolerance dictate who is number one versus number two, listings could prioritized based on what the CPA payout to the engine would be. Say for the keyword "airline ticket" there are four bidders, the highest of which agrees to pay the publisher a CPA of $12, versus $11, $10 and $8. This advertiser would appear first, allowing the search publishers to maximize their revenue opportunities, while taking the burden of click fraud from the advertiser.
The incentive for click fraud would disappear. No one would be getting paid for non-converting traffic. Trust me, if no one is getting paid for it, no one will waste their time building scripts and hiring people to click on paid search listings. It also eliminates the dirty tactic of competitors clicking on each other's listings to exhaust ad budgets.
For this model to work there would have to be some post-click data sharing between advertiser and publisher. Ideally, both publisher and advertiser would use a third party ad serving, bid management or analytics package to verify the conversion data. The usual precautions like mutual non-disclosure agreements would have to be established for data protection on both sides of the equation. It would seem to me that this level of effort would be well worth it for both parties involved.
So before everyone shorts their Google stock and writes off search marketing as the next spam, let us step up collectively and nip click fraud in the bud by shifting the risk assumption slightly off the shoulders of the advertiser. With no incentive for click fraud, the problem will go away and both advertiser and publisher will be better off for it.
Ron Belanger is Vice President of Search and Affiliate Marketing for Carat Interactive. Belanger is responsible for guiding the strategic vision of Carat Interactive's search engine marketing and affiliate marketing practices. Belanger has five years of search engine marketing experience coupled with nearly ten years of technology consulting and account management. Belanger has crafted successful search strategies for leading companies such as Radio Shack, Philips, Wachovia and Best Buy. He was elected to the board of directors at SEMPO (Search Engine Marketing Professionals Organization) in 2005, and sits on the MSN Search Advisory Council. He has appeared in publications such as B2B, OMMA Magazine, San Jose Mercury Daily News, Adweek and AdAge. He is a frequent speaker at Ad:Tech, Search Engine Strategies, and other events relating to interactive marketing. Ron Belanger earned a BA from Clark University.
Carat Interactive is a digital marketing agency committed to growing its clients' businesses by creating more profitable and enduring relationships with their customers across all interactive platforms. Carat Interactive is one of the world's largest interactive agencies with more than twenty offices around the globe. With North American headquarters based in Boston, MA, Carat Interactive has four additional offices in New York, Los Angeles, San Francisco and Atlanta. Carat Interactive is owned by Carat, the world's largest independent media agency with more than $15 billion in worldwide billings. Carat Interactive clients include Pfizer, Hyundai/KIA, RadioShack, Hyatt, UPN, and Palm, among others. For more information on Carat Interactive's services, visit its website at www.caratinteractive.com.
By Ron Belanger
http://www.imediaconnection.com/content/6439.asp
Posted by Hans A. Koch at 10:13 AM | Comments (0)
August 01, 2005
Google's Ad Network Spreads the Wealth
Google's Ad Network Spreads the Wealth
PC Magazine, August, 2005 by David Murphy
Keeping Kuro5hin members happy is easy. As a collaborative discussion site on technology and culture, with members numbering in the tens of thousands, Kuro5hin has a community that moderates itself. When a user submits an article to the site, it eventually has to run the gauntlet: All Kuro5hin's members have the opportunity to vote yea or nay on whether and where the article will appear on the site. But try to advertise to Kuro5hin members and the response may be less structured. "Our community is one of those where if there was going to be any opposition to an ad format, they would let you know about it," says Rusty Foster, Kuro5hin's founder. "A lot of them are rabidly opposed to advertisements."
Still, Foster turned to Google's AdSense program in late 2003 as a way to increase revenue for the site, and the text-based advertisements—still running today—have paid off in more ways than one. In general, members have accepted the ads, which are now an important facet of Kuro5hin operations alongside the site's in-house text advertising and blog ads.
Kuro5hin is just one of thousands of Web sites that participate in Google's AdSense, an advertising program that helps even the smallest sites bring in revenue through clicks on site-placed advertisements from Google's massive ad network. "It's good. It's definitely an essential piece of the overall strategy. I know a lot of people rely on it entirely for their revenue, but I'm wary of that," says Foster.
After you set up an AdSense account, you just copy and paste a block of Google HTML and targeted ads start showing up on your Web site. You can elect to run ads based on content or to establish an advertisement-filled Google search on your site. If your Web site is about cars, for example, the AdSense software is smart enough to display advertisements about cars. Or, if you set up a Google search box on your site, the results of visitors' searches will also feature advertisements matched for relevance. When a user clicks on an ad, you get paid. Google is mum about exactly how much money per click it pays sites.
The money comes from the dollars advertisers spend in Google's AdWords program, which is designed for Web advertisers. AdWords members' advertising campaigns are based on keywords; members decide on the amount they're willing to pay Google every time their keyword advertisements get clicked. They can increase