Tuesday, January 23, 2007

More On Distribution Fraud in Search

Happy New Year everyone; I've not posted in ages, but hopefully I'll have a bit more time to post going forward.

I wrote back in December about distribution fraud in the world of search, and the article quickly became the 3rd most read entry on my blog. In it I talked about the fact that a growing percentage of Google's search network traffic is, in fact, AdSense for Domains traffic where there's no searching involved - only navigational clicks and non-contextual ones at that.

Google's decision to condone this distribution fraud will cost them tens of billions in market cap - mark my words. For the time being it appears they're going to choose pleasing investors over pleasing advertisers, and the result will be either

a) chargebacks by advertisers, perhaps aided by class action lawyers who, unlike SEM's and advertisers, don't need to stay in the good graces of Google to conduct business

b) accelerated advertiser adoption of Ask.com and AOL direct ppc ad buys. After all, once an advertiser has Google.com, Ask.com and AOL search traffic, they can turn of Google's search network with no appreciable loss in conversions.

c) accelerated adoption of Yahoo and MSN ppc

d) hastening of the arrival of the point of diminishing returns for advertisers on Google and thus deceleration in Google's growth rates

There's a SEW thread on the topic of AdSense for Domains; start reading post #21 on page 2 and go from there. The thread started over a year ago and picked up again early Jan ’07. In it there are some pretty powerful, negative anecdotes on the ROI advertisers are seeing from AdSense for Domains – and strong opinions on why Google is doing evil by not letting advertisers opt out of it.

The second is an equally detailed blog post by Richard Ball at Apogee Web Consulting which covers both the history of AdSense domain traffic and what appears – to Richard and I and many others, at least – to be a very clear cut case of Google’s revenue ambitions getting the better of their ‘do no evil’ mantra.


Blogger Meme chose said...

Isn't there something more than a little odd about Google choosing to do this, even if we assume they are weighting their own interests above those of their advertisers, beyond the point of 'doing evil'?

I thought their whole success had been built on selling great advertising performance for not much, and then letting the auction system drive up the prices to reflect actual results.

Given how well that appears to have worked for them, why would they now divert from that path and start watering down the product in this way?

10:33 AM

Blogger searchquant said...

Two possibilities:

1)Google's content distribution partners are somehow getting into G's search network without G's knowledge. Having learned how focused and advanced these folks tend to be, I wouldn't rule that out.

2)It's very possible that Google honestly considers some large domain partners as deserving of 'search partner' status. I know that many in the industry do, and that many other who don't are too scared of G & Y!'s power to say anything about it.

1:56 PM

Blogger Richard said...

"Distribution fraud" vs "click fraud" - I like that. No wonder Google hasn't refunded (at least not yet) the garbage clicks. I need to tell them it's a "distribution fraud" and not a "click fraud" problem.

If you look at the chart on this post, I think you'll see why this "distribution fraud" is going to be a big issue for 2007. No way PPC advertisers aren't going to notice this garbage traffic.

I think Google knows exactly what it's doing. They are actively looking for partners who manage large domain portfolios. That they distribute Search network ads to these parked domains is, indeed, distribution fraud. Well said.

2:34 PM

Blogger Buster Fife said...

Distribution fraud is RAMPANT on Yahoo. Any owner of sites bidding on high value terms can provide hundreds (or thousands) of examples of distribution fraud.

I've posted a bunch about it on my blog http://www.ppcrecovery.com because every example I post on webmasterworld about it has been deleted.

9:53 AM


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