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Monday, May 28, 2007

Comment on The TechnoPinkos Are At It Again

I left the following comment on Sahir Sarid's post entitled The TechnoPinkos Are At It Again:
Sahar, I think Google and Yahoo have created a problem for the domaining industry. Think about this from the other side - who is ultimately paying domainers? Yes, PPC advertisers. Here's the problem, though. PPC advertisers have no idea their ads are being placed on parked domains. Google AdWords has a "search network" and a "content network" while Yahoo! Search Marketing has "sponsored search" and "content match" but no mention of parked domains. You have to read the fine print (and/or log files) to find the truth.

PPC ads running on parked domains are not contextual advertising. There's not content on these sites. A domain name in and of itself is not sufficient content for their algorithms. PPC ads running on parked domains are not search engine advertising. Yes, you can make a case that some generic keyword domains are essentially the same as a search. However, much of the PPC traffic I see is NOT from generic keyword domains.

Google needs to create a "domain network" and Yahoo! needs to create a "domain match" so the parked domain traffic can stand on its own. If advertisers want it, they can choose it. If it converts well, they will keep it. To distribute search engine ads or contextual ads on parked domains is distribution fraud. This fraud makes domainers look bad, but the real culprits here are Google and Yahoo! themselves. It is in the best interest of both PPC advertisers and domainers to increase the transparency of parked domain traffic.

Somehow, though, I doubt most domainers welcome the idea. What do you think?
BTW, read Domain Speculation: Attack of the TechnoPinkos for background on the "technopinkos" meaning. Much like Google and Yahoo! now make it possible to separate search advertising from contextual advertising, I think they both need to take the additional step and separate domain parking traffic as a new distribution option. Arbitrarily deciding that some parked domains qualify as search advertising and others as contextual advertising doesn't cut it. It's neither. Slapping a search box on a parked domain certainly doesn't make it eligible for AdWords search network distribution. I think it's worth reiterating the fine print in the Google AdWords help page that answers the "What are parked domain sites? Will my ads show on them?" questions:
Users are brought to parked domain sites when they enter a search query or unregistered URL in a browser's address bar rather than in a search engine such as Google. Previously, parked domain sites were blank pages, which meant that users arriving at one of these sites had to renew their search query.

Now, parked domain sites offer ads that can be relevant to a user's search query. Some parked domain sites also include a search box, which allows users to further refine their search.

Depending on the design of the site, a parked domain site will be classified as either a search site or a content site. That means your ads may show on parked domain sites if your campaign is opted in to the search or content networks.
The problem with this approach by Google is that parked domains should not be classified as a search site nor a content site. They simply don't fit into the current design of AdWords. Because of this, Distribution Fraud is the Real Click Fraud. The creation of a domain network, distinct from both the search and content networks, would solve this problem. It would fix AdWords which is currently broken.

Reading Putting users in charge on the Google blog today reminds me that Google forgets who their primary customers are. PPC advertising accounts for 99% of Google's revenue. Google should think about putting advertisers in charge. At the very least, let them choose whether or not to display ads on parked domains. Let them track parked domain traffic in campaigns separate from search ads and contextual ads. No, I'm not a TechnoPinko, but I can see what has them all worked up.

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Anonymous Anonymous said...

Hi Richard,

I think the philosophy here of both Google and Yahoo is advertisers don’t understand domain traffic enough, so they make the decision for them based on internal data or some other motives (read: $$$). It’s kind of like water in your house. It doesn’t really matter where it’s coming from as long as its clean and it’s coming.
I don’t know what google and Yahoo should do, it is for them to decide. I think the whole ppc industry is a house of cards that will fall flat on its face one day, then we will look back and say how have we lived with it for so long? Real conversions is directly related to sales, not to ip numbers and clicks.

I do see another major issue that is hurting domainers even further, and that is arbitrage players, either domainers who get into arbitrage or arbitrage players getting into domains.
Pure type-in portfolios will still be worth their weight in gold but if Google/Yahoo don’t differentiate between these two types of portfolios I think domainers in general will again look like the ones at fault, even though many of us don’t do arbitrage at all.

I agree with you most domainers would not welcome this idea, nor Google and Yahoo. There’s too much money on the table for Google/Yahoo to try something so radically different when they know what exist work well (they did say few times direct nav traffic is of the highest quality).
Think of it in terms of money. If google/yahoo implement an “opt in” approach it means most who don’t understand the domain channel will not opt in, making google and yahoo lose many billions of dollars on the channel. I don’t see this happening.



Tue May 29, 02:00:00 AM EDT  
Blogger Richard said...

Thanks for taking the time to respond, Sahar. Your point about different types of domainers (arbitrage vs type-in) is important. I've seen too much garbage traffic from on the Google AdWords search network that I've started blocking all traffic. Google has reluctantly divulged how to block parked domain traffic. Trouble is, it can't be done on a domain by domain basis. It's blocked at the partner level. So, I'm having to throw out the baby with the bath water. Any type-in domains that use domainsponsor will be blocked for all of my clients. Yes, Google needs to address this issue.

Regarding an "opt in" to a domain network, both Google and Yahoo! would make it on by default and force an "opt out" choice, I'm sure. That's what they do with contextual advertising. Most PPC advertisers don't realize they're purchasing search advertising + contextual advertising (+ parked domain advertising). If they put the burden on the advertiser to opt out, I don't think there'd be a big change from the point of view of domainers in the short term.

BTW, if it was possible to isolate genuine type-in domain traffic in a separate ad campaign on Google, PPC advertisers would likely choose this over content ads and/or bid higher. Revenues would actually increase for type-in domainers if Google (and Yahoo!) created a new distribution option for type-in domains.

Tue May 29, 07:59:00 AM EDT  
Anonymous Frank Schilling said...

Hi Richard,

Great post. I agree with Sahar, domain traffic often converts significantly higher than Google's own traffic but Google's 'smartpricing' holds their own lower quality traffic out as the 100% benchmark.

So if you have a domain that converts into sales for advertisers at 300 or 400% of Google's traffic you don't get a premium.

Most advertisers don't understand that targeted domain traffic (organic type-in traffic to generic names) is often the traffic that delivers conversions for them. I liken it to the crazy hunchback aunt in the basement spinning straw into gold. Nobody wants to talk about her or pull the curtain back because it reflects poorly on content publishers and the rest of the network.

I look at a lot of content sites like or certain blogs where the ads say: "Support our Advertisers" and tacitly encourage insincere visitors to click on a link just because they like the blogger or content. That is far worse than targeted traffic coming to a parked page on generic domain names, users clicking through on the related advertising.

I think some of the problems you've experienced come from poorly targeted domain traffic or bad arbitrage plays which drive untargeted visitors to the wrong ad content. Google typically adjusts for that in smartpricing. Some of your clicks would be $50 or $80 dollars per click of you stripped away every non-performing visitor and 'only' delivered the golden conversions.

In the end, I think this will sort itself out.. but after everything equalibrializes, I suspect you'll actually be paying more per click in 3-5 yrs.

Again, great discussion. Frank.

Tue May 29, 11:46:00 AM EDT  
Blogger Richard said...

Hi Frank,

Very kind of you to offer insight on my blog. I'm trying to think about PPC from the point of view of domainers as well as trying to get domainers to think about PPC from the point of view of the advertisers.

The trouble with Google's smart pricing is that it only applies to the content network. Any parked domain that is classified for the search network is exempt from smart pricing. It just doesn't make sense - parked domains should not be split between the search and content networks. What makes one parked domain eligible for the search network and another appropriate for the content network and smart pricing?

If Google's not going to create a separate domain network, they should be consistent and decide that parked domains are either search sites or content sites. If they're neither (or both), then they should build a new network. I still contend that AdWords is fundamentally broken.

I do agree that there's plenty of garbage traffic on the content network. That's why I was perplexed to find garbage traffic on the search network, after opting out of the content network. I don't care that garbage traffic comes from content sites or parked domain sites. I just want quality traffic for my clients.

If generic keyword parked domains bring quality traffic, I'd be happy to have it on the search network. I'm sure there is some quality traffic. When tracking PPC results, though, it's been very useful to be able to run separate campaigns for search ads and contextual ads. It'd be useful to do the same for domain traffic.

At any rate, thanks for stopping by. Nice photo in the latest issue of Business 2.0 magazine. ;-)

Tue May 29, 02:43:00 PM EDT  
Anonymous Bill Hartzer said...

"PPC advertisers have no idea their ads are being placed on parked domains."

As someone who manages PPC accounts and looks at traffic, I'm certainly aware of the traffic and what is being paid for when that traffic comes from sites that are obviously parked domains. There are some advertisers who don't really look at their stats, so they don't know where the traffic is coming from--which really is a shame.

Looks like the arbitrage players are going to need to look for some other form of revenue, though, like actually generating content on their sites.

Tue May 29, 04:51:00 PM EDT  
Blogger Richard said...

Hi Bill. Perhaps that was too broad a statement. These might be more accurate:

1) Most PPC advertisers don't recognize that many parked domains are on the AdWords *search* network.
2) Most PPC advertisers don't realize they can block these parked domains, even though site exclusion only applies to the content network.

BTW, thanks for including my firm's free keyword research tool in your 2005 Search Engine Guide article. I still see traffic from there.

Regarding the cleanup of arbitrage sites, I don't think this applies to Google AdSense for Domains sites. By definition, these sites have no content. The content is populated by Google - it's 100% ads. That's what's so peculiar about this whole situation. Google is cracking down on MFA sites on AdSense for Content sites but they run a separate AdSense for NO Content network that is lumped in with both the search network and the content network on the AdWords side. Google is trying to fit a square peg in a round hole. It's perplexing, to say the least.

Wed May 30, 10:14:00 AM EDT  

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