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Friday, June 08, 2007

Efficient Frontier Perpetuates the Domain Parking Traffic Conversion Myth

When I saw the Efficient Frontier AdSense for Domains case study last month (linked to from a Google AdWords help page about parked domains), I was worried it'd be used to perpetuate the domain parking traffic conversion myth. Sure enough, domainers are quick to promote the Efficient Frontier study:
domainer blogsThose posts are all from blogs I've recently added to a mini-blogroll on the main page of Apogee Weblog. Only one of those bloggers, Andrew Allemann of Domain Name Wire, seems to recognize that this study leaves some unanswered questions. Read his post, Domain Parking Sites Convert at Twice that of Search. It's very balanced.

I'm a little perplexed that Efficient Frontier published this study. Why? I first heard the term "distribution fraud" from Chris Zaharias, SVP at Efficient Frontier. When I wrote about the ridiculous garbage traffic coming from the Google AdWords *search* network, it was his post that made me realize this should be classified as distribution fraud and not as click fraud. Now his company is publishing a "case study" espousing the virtues of AdSense for Domains? No, something doesn't add up here. Note that I have great respect for Chris and am calling his company, not him, on this one. I gave him a heads up in May (read the comments here), before Efficient Frontier published the study on their site.

For any domainers reading this, I want to point out that I recognize the value of generic keyword domains and respect generic name domainers. I can appreciate the argument that genuine type-in traffic could convert as well as or even better than search traffic. After all, if the same keywords are typed with a ".com" on the end but in the address bar instead of the search box, advertisers don't have to compete with algorithmic search engine results. Unfortunately, this high quality parked domain traffic (I know many search marketers reading this blog will view that as an oxymoron but read my last sentence again) is being blended with garbage traffic across both the Google AdWords content *and* search networks. I know when I first started seeing significant amounts of garbage traffic from parked domains, I wanted to block them all.

Both domainers and PPC advertisers need greater transparency from Google (and Yahoo!). PPC advertisers need to be able to block the garbage traffic. Generic name domainers need their domains on a separate ad network from other domains and questionable content sites so they can earn greater returns on their domains (PPC advertisers will bid high for high quality traffic). Google needs to reduce the perception of click fraud. IOW, we all need to solve this problem.

Google is the gatekeeper. They need to stop distributing parked domain traffic on the AdWords search and content networks and to build a new, domain network. Doesn't that just make sense? On the AdSense side for publishers, Google offers: AdSense for Content, AdSense for Search, AdSense for Domains. However, on the AdWords side, there are only two networks: search and content. Google needs to add the third network and stop operating their hidden ad network. Or, are they really that reluctant to expose the "crazy aunt in the basement spinning straw into gold?"

Domainers are starting to realize that garbage parked domains hurt the reputation of the domain industry. I've listed specific examples of garbage traffic from both Google AdWords and Yahoo! Search Marketing. Domainers, put yourselves in the shoes of PPC advertisers. Would you want to pay for traffic from nonsense names? Would you actually spend your own money to buy any of the domain names mentioned in any of these posts from this paragraph? No, they're garbage.

Search marketers need to realize that, just as there are high quality and low quality sites on the AdWords content network, the same is true of parked domains. Trouble is, since there's no network dedicated to domains, PPC advertisers don't always know when traffic is categorized as AdSense for Search vs AdSense for Content vs AdSense for Domains, particularly when they don't separate search ads from contextual ads. But, don't paint all parked domains with the same brush.

Perhaps advocacy groups for domainers and search marketers need to work together to put pressure on Google (and Yahoo!) to distribute parked domain ads on a separate network. I'm thinking of SEMPO (Search Engine Marketing Professional Organization) and ICA (Internet Commerce Association). What do you think? Should Google create a domain network ad distribution option for AdWords to isolate the AdSense for Domains traffic? If so, who can convince them to do so?

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Anonymous Anonymous said...

"Google is the gatekeeper. They need to stop distributing parked domain traffic on the AdWords search and content networks and to build a new, domain network. Doesn't that just make sense?"

Google is run with a focus on the short-term quarterly numbers (contrary to everything said in their prospectus when they went public). Everyone knows that if they do not meet or beat the earnings estimates made by the outside stock analysts, the stock is at risk of collapsing.

So long as most advertisers are oblivious to the garbage traffic parked domains are bringing them, things will remain as they are. Google's mantra is: "If it makes money, do it!" (that "Don't be evil" slogan, is just for PR).

Sat Jun 09, 03:04:00 AM EDT  
Anonymous Frank Michlick said...


You (and Andrew from DomainNameWire) made some great comments here.

While I still see domains as a form of search, the report leaves too many questions unanswered.

I actually tried to reach the publisher for futher comments, but have not yet received a response.

We need more details in order to understand this case study. I wish the people could just get together and qualify some of the domain traffic.

And that's not really in the best interest of the search engines. While they like to take this traffic and more more money of it, in the end they would prefer it a lot if people did not search by entering domains into the address bar.

I don't have a problem with splitting out domain traffic, for the advertisers, as a matter of fact, I think it's time domainers form their own advertising network.


Sun Jun 10, 12:32:00 AM EDT  
Blogger Richard said...

Anonymous, I think you have a point. I look at Google as 2 separate companies: core Google search and advertising systems (AdWords + AdSense). The "don't be evil" idea does seem to still apply to core search, for the most part. That's pretty convenient, though, considering that 99% of the revenue comes from advertisers and ~half of that is not on Google's own properties.

Tue Jun 12, 10:24:00 PM EDT  
Blogger Richard said...

Frank, I appreciate you stopping by. It would be interesting to see a separate ad network for domainers. Google and Yahoo! do bring something to the table in that they have an available inventory of advertisers.

Still, I don't understand why Google talks the transparency talk but when it comes to domain traffic, they don't walk the transparency walk. Pretty lame.

Incidentally, I wonder how Sendori will fare?

Tue Jun 12, 10:30:00 PM EDT  
Anonymous Anonymous said...

I used to be of the opinion that such sites are indeed distribution fraud, as linked to in Chris Zaharias' blog. However, of late I have come around to thinking that such sites may offer some value. In fact, in my experience a lot of friends/family who look at these pages outside an SEM/SEO point of view, often click on the ads and find what they were looking for. So from that point of view these pages do provide a value to the user.

Thu Jul 19, 07:57:00 PM EDT  
Blogger searchquant said...

Hey Richard,

I've since left Efficient Frontier to start my own company, and wanted to clear up the air:

In My Opinion, the EF/Google case study is something EF would no longer agree with. Frankly, Google asked us to participate in the case study, but the person at EF they worked with (who's no longer at EF) didn't know enough to see the red flags.

Mon Sep 24, 07:24:00 PM EDT  
Blogger Richard said...

Hey Chris - Thanks for shedding some light on the matter. Best of luck with your new venture!

Fri Sep 28, 10:37:00 AM EDT  

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