Thursday, December 14, 2006

F#@K Click Fraud! It's Distribution Fraud That Matters

Each week brings dozens of new articles on click fraud, all with different takes on its extent & Google's efforts to mitigate it; you've all seen this and you have your opinions.


What the industry's not talking enough about is DISTRIBUTION FRAUD. Most call this 'search arbitrage', but that's not the right language; nor should we be implicitly condoning this fraud by calling it arbitrage. The practice of buying large numbers of AdWords ads (typically at very low CPC's) and sending those users to pages filled exclusively with search ads (whether from Google, Yahoo, Ask, SearchFeed/Miva or some other PPC firm) is nothing if not fraud.

Why? Simply because paid search ads are bought by advertisers with the explicit understanding that those ads will only be viewed as a *direct* result of a search performed on a search engine. Contrary to this understanding, Distribution Fraudsters are taking *search ad feeds* (as distinct from contextual ad feeds) and showing them on domains whose sole purpose is to receive low-CPC clicks from Google AdWords and provide no option to the user but to click on a high-CPC *search ad* within the site; this constitutes a contextual ad, not a search ad, and those who argue the opposite are taking liberties with advertisers' ads that they have no right to take.

Secondarily, it's correct to call this Distribution Fraud rather than Search Arbitrage because this practice goes against the T's & C's of AdSense.

There's a great, great video I found on YouTube that thoroughly covers this and which I recommend people view [below] and share. Kudos to its creator.

You all know about search arbitrage, but my point in saying all this is that we in the SEM world need to start calling it by its true name - distribution fraud. It's one thing for the search engines to condone 'search arbitrage' - whose very name implies people just trying to make an honest middleman living - and wholly another for them to condone fraud. For those of us that care about advertiser ROI, Distribution Fraud is 10X more of a problem than click fraud.

Will the search engines (Google primarily, for their adspace is the starting point for the vast majority of distribution fraud) attack this problem with more than just Quality Score changes? Will they see fit to make proper landing page quality the legal obligation of those acting as both ppc advertisers and publishers? My suspicion is that they will, but only after they've exhausted all QS-based efforts and missed earnings as a result of lower CTR. Who knows when that'll be.

Tuesday, December 12, 2006

Searchquant [Mostly] SEM Predictions for 2007

I haven't seen any '07 SEM predictions on the blogs I frequent, so here are mine:

10. Growth in number of words per query not only stalls, but goes negative as SE's get better at personalization, geo and context awareness.
9. Keyword management systems vendors realize their systems can't optimize in opaque markets. Their advertisers realize this too, leading to huge churn and massive consolidation.
8. At least one startup gets funding to bridge the online/offline revenue measurement gap using novel approaches. Think Quick Response codes, Project Apollo, RFID readers in cell phones, stuff like that.
7. Y! Panama helps good advertisers do better, and poor advertisers to do worse.
6. Bay Area real estate bubble bursts, offset at the high end by Googlers buying everything in the $1.5M-15M range.
5. Ad copy and multivariate testing stampede starts in earnest, as advertisers fight to raise conversion rates and avoid extinction.
4. MSN doesn't get above 11-12% search market share.
3. George Reyes' fingerprints found on Quality Score knob at the 'Plex.
2. Domain traffic comes to be viewed as the lowest-quality component of Y! & G's networks.
1. Someone proposes via AdWords.

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