PPC issue to keep track of: malicious redirects

It would obviously be a Very Bad Thing if large numbers of consumers ever decided it was a risky proposition to click on paid search ads. It appears, however, that a very sophisticated entity(s) is succeeding, through URL redirects, to get their malicious software installed on computers whose users click onto ad links after searching for legitimate sites. Washington Post's blog covered this yesterday, but what's alarming for me is hearing several first-hand reports in the last two days of advertisers' AdWords accounts being hacked into to put the damaging redirects in Google sponsored links in the first place.

This is all ultimately made possible by the fact that Google in its sponsored links shows the display URL for the ad rather than the actual URL the consumer is taken to upon clicking on the ad. Of course, G must do this because the alternative - showing a lengthy, non-sensical tracking URL - would result in far lower CTR, and perhaps user revulsion over PPC in general.

The process is:
1) Bad guy hacks into someone's AdWords account
2) Bad guy changes credit card billing information so that [sometimes very large] charges incurred in malware campaigns don't alert the advertiser.
3) Bad guy creates new ad group that looks like other of advertiser's ads but which redirects searchers to a site that exploits a known Windows security hole to install malware on the computer without the searcher ever actually seeing the redirect site. The searcher is still delivered to the site they were trying to get to, but with a short, invisible redirect.
4) Malware observes the computer it's now on and captures banking [and potentially other] info

My guess is the hackers recognize it's not in their best interests to do this on a massive scale, and so this will simply low-grade simmer while driving increased usage of security toolbars like McAfee's SiteAdvisor.

Video: Data Recency in SEM

David White, my colleague and the day-to-day head of European service delivery here, taped a short video discussing data recency as applied to SEM and which I think some people might find interesting. We are still working on our video production capabilities, but you get the picture...

Search Engine Marketing: Data Recency
Uploaded by efrontier

You Need These In SEM

Advertisers, don't work with an SEM unless they have some of these...

What Do Sharks Have To Do With Search?

...well, nothing that I can think of other than they both have long tails, but I thought I'd put up some old photos from my 2004 trip to Guadeloupe Island nonetheless.

Let Me Be the First to NOT RSVP for Web 2.0

I went to the Web 2.0 conference in SF two years ago, in retrospect because it appealed to my sense of pride to be able to hob-nob with folks who've done well in the Internet. What I found was lots of people with black-rimmed glasses talking about lots of things that didn't (and still don't) really matter to the advertisers who pay my bills.

Last year I didn't go because I thought about it too late, and because I felt less of a need to validate myself by attending such an event. I did, however, attend the Ask.com cocktail event, but because they're a business partner of mine. Good thing, too, because everyone I talked to who went to 2.0 was either a VC looking in vain for reasonable investments, Wall St types looking for a research edge, or people as vain as I used to be.

This year, I'd like to be the first to go on the record as definitely not going. I will not be attending Web 2.0, and I actually believe that will get me in with the *in* crowd next year.

Why am I not going? As far as I can tell, there's not an iota of tangible business value on the agenda, and I would just as well write a love poem to every Web 1.0 C-level exec if it's really only going to be about Web 2.0 hob-nobbing with v1.0.

Online Marketing Conferences: Who Attends?

Sometimes as an exhibitor at a search or online marketing related conference, you get pre-show attendee lists. I looked at one for a recent conference and thought the numbers were interesting:

Investment bankers: 1%
VC's: 2%
Advertisers: 18%
Agencies: 20%
Publishers: 20.5%
Service Providers: 24.5%
Ad networks: 0.5%

I don't know what to make of this except to say there are too many agencies and publishers chasing too few advertisers, and why oh why are there more investment bankers than ad networks?

YouTube video: A Brief History of Bid Management

For those of you interested in the history of keyword management systems, here's a video we did recently. Notice how I keep my thumbs in my pocket the entire time.

keyword management in paid search
Uploaded by efrontier

A Reprise Reprise: Why Most SEM's Are Picking The Wrong Side

Another SEM got tired and sold out to a traditional agency for a low multiple yesterday. The Reprise team is great and gifted and proven, but I think they'll look back and realize they made a big strategic mistake. Here's my analysis:

1) Reprise probably got <$25M, not exactly a stellar price, but big agencies aren’t used to paying technology multiples.

2) I think SEM's maximize their potential in the long-term by endeavoring to be the best at what they do and being independent enough to sell to everyone, not just one particular global agencies’ clients. Reprise will within a matter of 1-2 quarters cease to be selling to anything but existing Interpublic clients.

3) Good SEM's should think of themselves as more akin to Atlas and DoubleClick in terms of being able to sell to many agencies, and having agency products helps that.

4) GOOG & YHOO are worth $200B+ together because online marketing matters most and because online marketing matters most, best of breed will matter to enough advertisers to allow good SEM's to control their own growth for the next several years at least (control meaning their own execution will determine their success more than external market/competitive factors).

5) I think the big traditional agencies will continue to largely ignore or be irrelevant to the search engine’s top 1000’s of advertisers = the web intermediaries. That said, with all these SEMs getting bought by big agencies, good remaining SEMs should actually be in a very good position to become solutions of choice for smart web intermediaries as well as the minority of offline advertisers who ‘get it’ online. For our part, I feel confident that our web-centric clients have built long-term businesses that will continue to challenge old school brands whose own business models are not web-ified enough to suit consumers’ changing media and buying behaviors. SEM’s within big agencies will, for their part, in effect be locked out of the non-traditional Internet business space, leaving it to us (and a few others).

6) I firmly believe the best SEM's will have to have dual technology-enabled services and self-service technology offerings. EF, for one, *is* a new model and one that exists because the opportunity exists to continue build out a thriving, independent SEM that will become attractive not to low-PE agencies, but rather to high-PE technology companies like SaaS, SAP, Oracle, IBM and Microsoft on the one hand, and high-PE Internet companies like IAC, Yahoo, Google, Valueclick, Aquantive and [dare I say] Omniture on the other hand.

7) If SEMs can be among the first and best at growing into mobile, directory, radio and TV along with the SE’s, we will get our share of agency business no matter what SEM they buy.

8) Lastly, I think it’s important to note that we’re currently in a relatively benign economic climate; if the economy heads into recession as I feel it will, bloated agencies have always & will be the first ones to feel it – not something Peter and Josh’s *employees* will find very rewarding.

Congratulations to Peter & Joshua (and Frederick and others) for making some dough, but in the most ironic of twists, they picked the wrong side.

SES NYC Day 2 Recap

If you were here today and heard anything interesting/new/groundbreaking, please let me know 'cause I sure didn't.

LPO Patent Wars To Start This Year?

With Google's announcement today of the production launch of their free landing page optimization(LPO) product - Website Optimizer - I recalled a conversation I had with a former colleague about Memetrics, an LPO firm out of Australia, in which I was told they had already been issue a patent covering LPO several years ago.

Sure enough, when I did a search for "Memetrics patent" I came up with this 12/06 announcement from them that they have engaged famed Silicon Valley IP Law Firm Fenwick & West to enforce their patent. It reads:

"We have enormous confidence in Fenwick and West's ability to help Memetrics protect our competitive advantages in the marketplace," said Hikaru Phillips, Memetrics CEO. "Seeking patent protection for our technology has always been a key part of our IP strategy," said Phillips. "As the marketplace for multivariate testing heats up, our U.S. and foreign patents become even greater assets in our bid for market leadership and we take our investment in them very seriously."

Memetrics holds a U.S. patent for automated online experimentation. Memetrics U.S. patent number 6,934,748 includes 43 individual claims for defining and conducting experiments and collecting user behavior data. The patent is one of the earliest in its field, and the US Patent Office has relied on it to reject later-filed applications covering related technologies.

My bet is Google has to pay an ongoing 8-figure/year royalty to Memetrics...by the end of the decade.

SES NYC Special Events Calendar

With SES NYC coming next week (4/11-13 to be exact), I want to make sure none of you Searchquant blog readers miss out on any of the related events; so check out the SearchEngineWatch discussion forum thread covering all SES NYC dinners & drinking events.

Of special note, Efficient Frontier will be hosting a ~30-person dinner at the China Grill (1 block from SES) as well as a post-dinner bar crawl (may or may not have 2 limos to drive us around). If you'd like to attend, please contact me at chris at efrontier dot com - we still have 5-7 spots left. Key requirements:

- You've seen an AdWords account before
- You know the difference between our SEM approach and others, and have an opinion on it
- You can drink *and* talk at the same time (at least until 2am)
- You can respond thoughtfully to the question "What are 2-3 things going on in SEM/SEO that no one's talking about but which are really important in 2007?"
- None of the above, but you spend $100K+/month on search #:^)

See you there!