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Tuesday, September 26, 2006

BusinessWeek Clickfraud Article Doesn't Click

The BusinessWeek article Click Fraud: The Dark Side of Online Advertising (found via Micropersuasion) doesn't click. The article focuses primarily on a single advertiser, Martin Fleischmann, from a company called MostChoice.com. Plugging that site into my firm's free keyword research tool, I see keywords like:
insurance, insurance quotes, life insurance quotes, term life insurance quotes, mortgage, health insurance, refinance
This MostChoice company is in a pretty competitive industry, from the point of view of PPC (pay per click) prices. Bids on Yahoo Search Marketing (formerly Overture) are in the $4-$10 range for the keywords they've stuffed on their site. The Business Week article mentions, "the validity of his clicks, for which he pays up to $8 apiece, has become an obsession. Every day he pores over fresh spreadsheets of click analysis." What appears to be missing is a strategy to structure the PPC advertising accounts in order to minimize fraudulent clicks. Perhaps these guys need to tweak their AdWords. Here's where the article unravels:
Fleischmann, like most other advertisers, has agreed to let Google and Yahoo recycle his ads on affiliated sites.
With both Google AdWords and Yahoo Search Marketing, advertisers can choose to opt out of contextual advertising. By opting out, advertisers would avoid most of the sources of click fraud. The Business Week article misses a fundamental point: Yahoo and Google sell both search engine advertising and contextual advertising. Advertisers can buy just search engine advertising, if they desire. If they choose contextual advertising, it's up to them to understand where the clicks are coming from and to structure their accounts to minimize click fraud. True, the search engines need to do more to combat click fraud. I argue in my post about the Google AdWords Philosophy that Google needs to entirely separate search ads from contextual ads. Here are some of the strategies advertisers can use to minimize click fraud from the Google content network (where contextual ads are displayed):
  1. Turn off the content network
  2. Run contextual ads in a separate keyword-targeted campaign
  3. Set lower bids for content ads
  4. Block sites in the content network (using the site exclusion feature)
  5. Run content ads in a separate site-targeted campaign
I do think Google should change its practice of opting advertisers into the content network, by default. I suspect most advertisers aren't even aware they're engaging in contextual advertising as well as search engine advertising when they open a Google AdWords account. However, Google does at least provide tools which allow an advertiser to manage content ads. I wonder if the companies featured in the Business Week article are aware of all of the options. Certainly doesn't seem to be the case, but the article might be painting an inaccurate portrait of the sophistication of these advertisers.

I'm more concerned about click fraud from search ads. When Google and Yahoo blur the distinction between search advertising and content advertising, that's where the promise of PPC advertising is in trouble. In a blog entry entitled Wired: Google vs Click Fraud from December of last year, I talked about this problem. Just like Google has evolved the AdWords platform over the past year to increase the ability to manage ads across the content network, it needs to give advertisers more control over the search network. For instance, why can't site exclusion work for the search network? That would have solved the ZapMeta problem referenced in the BusinessWeek article. Additionally, advertisers should have the option to not display ads on parked domains. Those are not search ads.

The battle over click fraud needs to be fought on two fronts: search click fraud and content click fraud. Advertisers can employ strategies to minimize click fraud from content ad clicks. The search engines need to do more to address click fraud that occurs from search ad clicks. Advertisers need to have adequate tracking in place to know where clicks are coming from and to identify those that might be fraudulent.

Free resources: tool to track Google content ad clicks, tool to track Yahoo ad clicks

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3 Comments:

Anonymous Michael @ MostChoice said...

Just a quick comment. I am the online marketing manager with MostChoice. While the article does not necessarily make this clear, the problem with the ads we saw were from the search network, not from the content network. We opt out of the content network because of the problems with traffic.

The issue is that Yahoo, and to a much lesser extent Google, have allowed certain "partners" into their search network which are utterly junk. We have no way to opt out that (with Yahoo) and that is the problem. If these bad sites were separated out, they would not be worth the expensive clicks we have to pay for them.

So it is not just the content network that is a problem but the "search partners" that are allowed in and lumped together with traffic from Yahoo and other real places.

And we agree about site exclusion -- if we were able to limit the sites, that would help tremendously. More then that, they need to look at making sure their partners are quality partners that send real traffic and do not try and bend the rules. Otherwise issues like this will end up depressing some of the faith in the CPC system of advertising.

thanks
-Michael @ MostChoice

Tue Sep 26, 05:44:00 PM EDT  
Blogger Richard said...

Hi Michael,

Yeah, I imagine you're not too pleased with the article. Notice that I said "the article might be painting an inaccurate portrait of the sophistication of these advertisers" in my original post. I also pointed out that "search engines need to do more to address click fraud that occurs from search ad clicks." Good that you've turned off the content network.

Now, here's what I'd recommend you do to help alleviate the click fraud on the search network: Split your campaign(s) into two. For simplicity, let's say you have a single campaign. Duplicate it. The original should be set for Google only and the duplicate for search network only. For the ad groups in the search network campaign, set lower bids than those on Google. Perhaps even use more comprehensive negative keyword lists. Additionally, consider a lower budget for the search network campaign. This sort of a strategy should minimize your click fraud risk.

HTH

-Rich

Tue Sep 26, 06:07:00 PM EDT  
Anonymous Michael @ MostChoice said...

Those are good suggestions and they are steps you can take to minimize the risk. Still, the search engines need to police their partners much better.

Most of the problem lies with Yahoo more then Google, since Google does give you more options to "opt out" of the different networks. The weird sites like insurance426.com or whatever -- that was on Yahoo. There was no way to opt out so we have to always watch our high risk categories and see where we are getting the clicks.

We already do much of that splitting based upon keyword groups and categories. Usually the worst type of fraud occurs in the expensive terms -- which is what you would expect. Generally that is where we will see patterns of surges of clicks.

We just want the traffic quality to be cleaned up because in the end that benefits everyone.

Wed Sep 27, 05:52:00 PM EDT  

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