The Pre-Commerce Blog

Click Fraud - Don't Just Follow The Money

Mark Cuban started a discussion about click fraud today, focusing on what is and isn't clickfraud. Most of his points, and those in the comments, look at the problem from the side of the clicker (who is generally the one perpetrating the fraud).

This is all interesting, but an easier way to define it is taking the viewpoint of the advertiser. If the person who clicked does not have genuine intent to either learn more about, or purchase, the product/service being advertised, then the click is 'fraudulent' (or better-yet 'invalid' as Andy Beal suggest).

Another commenter suggests the CPA deals would elminate the problem, since advertisers would only pay when visitors actually purchase. In other words, turn all of PPC land into affiliate marketing. Not a bad idea, and a little birdy told me that Google is already testing the idea.

Take The Geico Challenge

Yesterday I read the MarketingVox reports that the folks behind those annoying 'gecko' ads had actually won a portion of their suit against Google. Turns out that isn't true.

Andrew over at Traffick clears up the Google/Geico conclusion, pointing to a full article in MediaPost.

So buying trademarked terms as keywords is OK, but using those terms in your ad copy isn't. Can someone tell me why Pepsi can call Coke out in tv commercials but not in PPC text ads? Or why href="http://www.precommerce.com/blog/archives/001443.html">DHL can race Fedex trucks down the street but not name them online. Any lawyers out there?

Update:Google General Counsel weighs in with his interpretation of the verdict.

Last December, the judge in the case ruled decisively in our favor on the issue of keywords. In her oral ruling, she stated that GEICO had failed to prove that using "GEICO" as a keyword to trigger ads was likely to confuse consumers. Then, earlier this month, she issued a written ruling explaining the reasoning behind the December ruling.

In her written ruling, she stated that GEICO's own evidence "refutes the allegation that the use of the trademark as a keyword, without more, causes a likelihood of confusion." That is a clear signal that Google's policy on trademarks and keywords is lawful.

What has generated the confusion is another part of the ruling, of little significance to Google, that relates to the use of "GEICO" in ad text. Google already has a policy that prohibits advertisers from using someone else's trademark in their ad text when the trademark owner objects

Local Search : Maps Make It Happen

The new Microsoft Virtual Earth, which joins Maps.Google.Com, is the clearest presentation yet of the fact that search (paid and hopefully organic) is going local in a big big way.

Look at the image below, and marvel at how nicely the list of bookstores is displayed, and each bookstore is 'pinned' on the map. And yes, they change as you scroll around the map.

Would you want to be a bookstore left off of this list? Neither will anybody else. Would you pay to be listed first? Lots of companies will.

Some Virtual Earth Reviews and comments: here, here, here.

Paid Search In The News

Two good articles caught my eye today. The first is about the folks who work for Google writing Adwords ads (from the LA Times):

She crafts text ads to intrigue Web surfers because advertisers don't pay Google unless the ads are clicked on. She has only three short lines — of 25, 35 and 35 characters each — and a link to make her pitch.

The other is about a topic near and dear to my heart - why paid search gets 95% of the budget when it only delivers 15-20% of the traffic. In this case, wise man Gord Hotchkiss calls it the 70/30 rule:

I asked the audience which section of the page they normally look at first. Almost every hand in the audience went up when I got to the top organic results. This was no great surprise. From our research into search user behavior, I was pretty sure this would be the case. Then I asked who in the audience dedicated at least 30% of their search marketing budget to organic optimization. A very few hands went up, probably less than 3% of the audience.

Posted by Craig Danuloff at 7:02 PM

We're Lawyers, And We're Here To Help

Clickfraud is a real problem, one for which it would be great to see a white knight ride out of the forest and make the world safe and fair again. Unfortunately, that doesn't appear to be happening, but we do have a bunch of lawyers who want to sue the problem away. Of course, I'm fairly certain they won't be suing the folks actually responsible, just those who have a lot of money and therefore will wind up (financially) liable one way or the other.

It's been obvious for some time that search has grown up. What milestone is it when the parasites arrive?

(Via SearchBlog)

Yahoo for Easy Track (Overture)

Tracking the specific keyphrase that drives paid search is a critical component of using analytics to drive your online marketing, but the process of tagging your PPC URLs to provide you with data has been a painful incremental step in an already cumbersome process. Not any more - at least on Yahoo Search.

Yahoo Easy Track automatically adds the keyphrase you purchased, the keyphrase the user searched, and the search type (content, standard, or advanced) to the inbound URL so your analytics package can capture and parse this data.

Google Adwords should add this feature immediately!

(Yahoo's help file describing this feature is in the extended entry.)

======================
What is Yahoo! Easy Track?

Yahoo! Easy Track is designed to provide more detailed information to advertisers who analyze their Web server logs. By clicking the "On" button, your existing URLs will be appended with information that will allow you to determine traffic by keyword, match type and raw search query.

Please Note: Yahoo! Easy Track may not be appropriate for all advertisers. While Yahoo! Easy Track has been designed to work with a broad set of technologies and platforms, we recommend that you test your links and closely monitor your traffic after opting in to this feature. There are several reasons why Yahoo! Easy Track may not work:

* Collision: You may already be using one of the parameter names Yahoo! uses within your URL (OVKEY, OVRAW or OVMTC)
* Length: Adding this extra information may exceed the URL length that your system can handle (usually up to null characters)
* Brittleness: Your system may only function with a single source variable
* Formatting: Your URL may require "non-standard" formatting to work. For example, your system uses a "#" symbol instead of a "?" to indicate the start of the query string. Check with your ISP or Webmaster if unsure.

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What are the values I might see for each tracking parameter for Yahoo! Easy Track?

OVKEY will show the keyword (or phrase) you entered, e.g., Used Car
OVRAW will show the keyword (or phrase) a search user entered, e.g., Honda Used Cars
OVMTC will show the Traffic Type used to match your keyword with the user's keyword - Content, Standard, and Advanced

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How will the parameters for Yahoo! Easy Track appear in my Web logs?

With Yahoo! Easy Track enabled, you'll see three additional parameters (and their corresponding values) appended to your existing URLs.

The Click Fraud Solution (OK, part of it)

Click-fraud could be Google's own Tsunami and the wave is getting higher and heading towards the shore. Seth Godin's post today may further help to clear the beaches. But I have a simple (partial) solution : # Google should require registration of users before they can click paid ads. # Users should be 'rated' based on how much registration information they provide - those who provide a verified name/address/demographic/email get rated higher than those who only provide an email, for example. # Advertisers should have their click-fees pro-rated against the rating of the user who clicks. Say the auction-set click fee is the base, and there is a 20% discount for no demographic data (just basic stuff like age/sex), and an 80% discount for free email only (the hotmail account users of the world). This of course assume a few things: # Google is going to keep all the reg data 1000% private. None of it goes to advertisers no matter how much they whine or pay. # Google creates a simple reg system that hackers can't trivially beat by just registering thousands of fake accounts. I don't know how they'll do it, but put all those PHDs to work! In this case, raising the bar against click fraud from the current 'none' to something substantial would be progress. It doesn't have to be perfect to be A LOT better than the current system. # Users have to get real. There will be the immediate and hysterical cries from the 'internet is free' and the 'I hate big brother' crowds. But if you have to at least take the time to come up with a fake name and password for the New York Times, isn't it reasonable to do so when you want to visit a web site that is paying for the right to have you visit? Google can leave organic result free and unregistered. But don't expect advertisers to pay for anonymous traffic when everybody knows that a large to very large % is fake. And worse, it's fake largely because there is no barrier (or law in many cases) against it being fake. The issues and implications of this are large and should be debated and a final set of solutions arrived at. The above is just an idea based on the premise that doing nothing, and hoping click fraud really isn't too bad or will go away, is no longer sufficient. Steps need to be take or PPC ads are going to get washed away. Update: I just found a site called whosclickingwho.com that claims to detect fraudulent clickers - either those who click repeatedly within a time period, or click into the same site from multiple click engines. Assuming this software works as advertised, why can't Google offer these features? (Here's a clickz article about them (written by the CEO) which still lends some credibility - I just found these guys 2 minutes ago so I'm not vouching for them yet.)

PPC Pyramid

Extremely interesting chart from Mary Meeker, via Searchblog, showing both the impact of using longer search terms and the price 'inflation' over time.

Borrowing The Brand

I've never fully understood the argument of those who want to control how their brand names are used online. I see why they want to prevent others from buying their brands as keywords, or from using their brands in search optimization, but I can't quite follow the logic that they believe should give them that right.

I just watched a TV commercial for DHL in which 25 seconds out of 30 are filled with Fedex and UPS trucks (and the drivers, uniforms, and logos that go with them), racing through the streets to reach a delivery address before each other. The punch line comes in the last few seconds, when they both arrive to find the DHL guy already finishing his deliveries at that address.

Makes buying your competitors' keywords look mighty tame, doesn't it?

The Emperor's Padded Clothes

In 2003 Google took in $962 million, 95% of which came from PPC ads, according to CNN (and I assume, their S1). Wall Street, supported by tens of thousands of relatively ignorant private investors, are about to value the company near $25 billion as a result. (Lots of IPO coverage from the blog world.) So why isn't there a lot more talk about the clear and present danger of click fraud. An article today in the Times of India shows that click fraud is not isolated. It's a business.

"With her baby on her lap, Maya Sharma (name changed) gets down to work every evening from her eighth-floor flat at Vasant Vihar. Maya's job is to click on online advertisements. She doesn't care about the ads, but diligently keeps count — it's $0.18 to $0.25 per click. A growing number of housewives, college graduates, and even working professionals across metropolitan cities are rushing to click paid Internet ads to make $100 to $200 (up to Rs 9,000) per month. It's boring, but it is extra money for a couple of hours of clicking weblinks every day," says a resident of Delhi's Patparganj, who has kept a $300-target for the summer."

I have a friend that ran a very large PPC program several years ago - and claims that there are cities in eastern europe which should have streets named for him because he paid so much money to webmasters who were using click-fraud techniques. He told me months ago that these guys don't steal $100,000 from you via one site, they set up a 1000 sites and steal $100 a thousand times. It's easy these days to distribute web sites all over the world, and software to make automated clicks look like real ones is prevalent. I don't think he imagined that the market would be so lucrative, and wages so low in other countries, that you could build human click teams.

At the InternetWorld search conference in NYC a few months ago, I asked the folks at Google and Overture about click-fraud, when they neglected to mention it as one of their future risk factors. They gave the standard 'we have ways of detecting fraudulent clicks and don't think it's a large problem' answer. There are some women in India, and some guys in eastern europe, who would disagree if they weren't so busy earning their living scamming you...

I point this out because in as much as I've read the fawning over Google and it's IPO in the last few weeks, I haven't seen one single mention of this issue. Maybe it isn't a big enough problem to significantly impact earnings, but maybe it is. It clearly seems worthy of some serious debate and investigation by journalists and bloggers. Perhaps more importantly, this could be the chance for the advertisers - who are paying these PPC fees and are the ones actually being ripped off - to force the industry to provide more information and if necessary develop better prevention systems.

Clearly, a huge amount of the PPC click traffic is geniune. It wouldn't be producing actual orders and the great ROI that many people enjoy if this wasn't true. But since very few sites convert more than 20% of their visitors (and most a lot less) at least 80% of the clicks most people pay for aren't buying. I think it's easy to imagine that 10-20% of those could be bogus and nobody would even notice. But if that were true, then 10-20% of your PPC expense is wasted, and that 10-20% of Google's earnings are questionable. I'm guessing that 10-20% number, but it seems hard to believe the number is zero. What is it? Shouldn't we know?

Coke Adds Life

It’s nice when a big company like Google comes out and admits that I was right. Their decision today to start accepting ads on all trademarked terms is a wise one. Trademark owners should be able to protect their brand names from fraudulent or misleading use, but not from being put into unfriendly context or comparisons.

Burger King put their restaurants on street corners across from McDonalds to gain context and comparison. The Pepsi Challenge was about context and comparison. So are generic or store brand drugs that say things like ‘same active ingredients as Tylenol’ on the package. The online equivalent is buying a competitive keyword and saying to consumers ‘if you think you want that, check this out.’

Congratulations to Google for this bold move. I’m sure they’re ready for the barrage of lawsuits that are sure to show up – they wouldn’t have made this reversal without being really ready to defend it to the end. While I don’t think they did this out of any love of free speech – their revenue stream was going to disappear one keyword at a time if they let the ‘banned brand’ trend continue – everyone wins in the end, including the free markets at large.

For the record, I don’t agree with the second part of their decision – to allow trademark holders to keep their trademarks out of other peoples’ ad copy. But I can understand why they might make this decision. Allowing the use of 3rd party trademarks in ads creates a real opportunity for fraud and misleading ads. By banning that use (upon request of the trademark owner) the folks at Google can avoid thousands of judgment calls and arguments. It’s hard to blame them for that.

See Also: John Battelle comments, Search Engine Journal, and Traffick too.

Pay Per Action (PPA)

SearchEngineLowDown points to a new service being developed by FindWhat and Incognito that provides temporary phone numbers for online ads - the idea is that anyone calling the phone number must have got it from the ad so it provides a way to do a pay-per-click equivalent with the telephone. Of course, you can do the same thing if you have enough phone numbers and the ability to track/count inbound calls, but if it's priced right there is no doubt that this will be an important service in the years to come. (Well not this service, but the knock-off that Google and Yahoo introduce...) Just another step in the transition of advertising into a measurable media type. With this we'll need at least two more pieces of the puzzle to make other response forms measurable: * A unique bar-code generator that can be connected to online printable coupons. The customer would get an incentivized offer online, print their coupon to take to the offline store, where the coupon would be redeemed and scanned into some cheap internet-connected bar-code reader. * A set-top-box gizmo that lets users who see a TV ad click a button on their remote to get an incentivized offer via email. So anyone watching an ad on television can 'respond' and get counted. Tivo has a feature where certain commercials display a small icon telling you to click now to have that program recorded when it is on - this would work like that except the click would trigger the email. Maybe one or both of these exist. I have no doubt both will - in some form or another - within a few years. Trackable, measurable marketing is too powerful to stop with little text ads. By the way, a measurable pay-per-click display ad system has existed for about a year already - AdMarketPlace. Not sure why I don't hear more about this. I'm sure the Adwords version is going to be a dynamo.

Bet You Can't Click This

So Yahoo and Google aren't taking 'online casino' advertising anymore. Let's see how many things we can count that are wrong with this: # Collusion – I want these two companies to be fierce competitors. Not buddies who have a beer and decide what’s going to happen on the internet. # Censorship – The slippery slope gets steeper and greasier every day. Do these guys really want to be in the business of stopping certain kinds of speech? Every whacko paranoid group in the world is about to call for the end of advertising for something or another. # Hypocrisy – This move was clearly driven by political pressure, not because someone drew up a list of the most nefarious or socially damaging ads that they were making money from. I don’t know what would top that list, but it wasn’t online casinos. # Government Intervention – The article suggests that fear of the DOJ played a role in this ‘decision’. It’s John Ashcrofts world, we just live in it. # Ineffectiveness – Ads are out, but no mention that content pages would be excluded from the indexes. So all those third party gambling directory sites will have even more incentive to get top ranking and earn all the ad money themselves. Is there any chance this move stops even one person who wants to bet from doing so? Just say no. I’m sure there are ten more. Add yours to the comments. I may revisit this one later when I have more time. Other Blogs On This Topic: SearchBlog, and SEO Roundtable.

SiteMatch Revisited

The good folks from Yahoo have jumped into the debate regarding their new programs. Following up on my earlier comments, I thought it would be fair to include some positive thoughts based on their feedback. First, they do a much better job now describing who benefits from SiteMatch and the conditions that would suggest using the program, and even more important have added an explicit description of attributes for a site that probably doesn't need the program. This type of clear and realistic information can directly induce customer to not spend money, and is therefore rarely dispensed. I think many people will be able to read this official 'Don't by it if.." list and save their money. Bravo Yahoo! Second, I'm impressed with the level of customer service and communication that they seem to be promising. I hope they deliver, as they suggest, to the level where people feel like they get full and reasonable answers to all related questions. This level of support clearly has a cost to them, and a value to customers. Even more impressive, is that they seem to be promising better dispute resolution even for non-paying sites - via an email address they set up where sites that have been 'banned' can plead their case or request further info. I think they owe sites this basic courtesy (because the sites make up their index in the first place) but clearly many engines don't even do that. Third, it's great that they've jumped in to discuss the issues. Most companies avoid these types of debates for all kinds of reasons. The web is making that harder, especially for web companies, but it still merits recognition when a big company breaks rank with the 'old way of doing things'. Defending anything in a forum is tough work, and they earn my esteem as long as they show up and make an honest attempt to communicate. It will be interesting to see how the thread pans out. My primary objection to the SiteMatch program hasn't gone away - I think the flat fee $0.15 and $0.30 per click fees are unreasonable. A PPC listing system disincentives all kinds of excellent content that is not transactional in nature. Ideas for how to improve this would take more space and time than I want to spend, but at a minimum there should be more granularity to the pricing, and there should be fee caps (say $1000 annually per listing). This isn't to say that the program doesn't have benefits, it's that the benefits aren't related to the number of clickthroughs. The responses Yahoo makes to these points are underwhelming: * "The new base fee is lower than the old base fees." All that matters is the total cost. It only takes about 1000 clicks in a year to make the new programs meet the old prices. A site with 100,000 or even 1,000,000 clicks will take little comfort in the fact that their initial check is only $49. * "Cost per click pricing ensures a higher level of user experience because only high quality pages will be submitted." This is true only if you define 'high quality page' as one that can earn in excess of $0.15 or $0.30. In fact, this policy prices many high-quality (defined as useful or informative) pages out of Yahoo (unless the free crawl finds them). * "Unless CPC is instituted, there is no incentive not to create lots of bogus pages and 'game the system'." This is the worst argument of all. People 'game the system' because it is profitable. Adding a cost where there was none will certainly be a filter, but that filter applies equally to people and pages that aren't 'gaming the system' but just want to communicate or distribute information. Welcome to the discussion Yahoo! Glad you're here.

Yahoo Is Looking For A Few Geniuses, And A Lot Of Idiots

The new Paid Inclusion Program from Yahoo, if you haven't heard, allows a web site to guarentee inclusion (but not position) for a fee of $10-$49 per page plus $0.15 or $0.30 per click-through. Not only do they guarentee that your pages will be in Yahoo (and all Yahoo Network properties) but you're pages will be re-indexed every 48 hours, and you'll get all kinds of tracking info and tender loving customer care. All of that sounds very nice, except of course for the $0.15 or $0.30 cost per click. Yahoo is asking site owners to sign an open-ended contract, promising to pay these fairly steep fees on every lead generated through any Yahoo property (Yahoo, Alta Vista, AllTheWeb, etc.) without any cap or ability to predict the total cost. They've invented the world's first search marketing program where participants will undoubtedly hope that it really doesn't go too well. Of course, there is a way out. Just stop making the necessary deposits into your account and the good folks at Yahoo will gladly drop your listings and you can be in the money-saving position of not being listed at all. In any Yahoo property. Talk about choosing the lesser of two evils. To make the choice even tougher, in the same breath that they announced this new program, Yahoo told the world that their goal is to have the largest possible free crawl of the web, and that participating in the paid inclusion program will have no effect what-so-ever on page position. In other words, your pages will probably be in Yahoo for free anyway, and paying doesn't help get your listings on to the first, second, third or even fifteenth page if they aren't relevant. Listening to the guys from Yahoo try and finesse the paradox of these two statements was entertaining. They bragged about the quality of their free crawl and boasted of their deep committment to find every page they possibly could find for free, but somehow they were able to leave just a little bit of doubt that they might not find your pages. The SiteMatch program was just a simple little alternative they came up with for people who 'wanted to be sure'. They also tried, with straight faces, to say that the real reason for SiteMatch was the '48 hour refresh, statistics and customer service.' That's worth $0.30 per click on every visitor day in and day out? I think SiteMatch will be popular with geniuses and idiots. The geniuses are the ones who can calculate their ROI to be clearly greater, after fully diluting all the traffic through their own conversion rates, than the $0.15 or $0.30 that Yahoo is asking, and who have large or frequently updated site. If you're making money every click buying clicks is a very smart move. This will be a relatively rare company, but clearly there will be thousands of them. The idiots will sign up out of fear, confusion, ignorance, or some goal other than profit. Let's look at each of them. * Fear. Many companies, especially in the growing 'search mania', will be terrified of being left out of Yahoo. They'll pay up. * Confusion. These programs are confusing. I'd say intentionally so. At SES, in rooms with over 500 full time search professionals, there were dozens of questions and nobody could agree on where the lines were or the truth was, and this was after hearing two senior Yahoo officials explain the program with PowerPoint and all. A week later it's no clearer. * Ignorance. A lot of people will find out that Yahoo has a program where you pay to get your web pages listed, and think that participating is how you get your pages into Yahoo. (Isn't it strange that it isn't?) Worse, search submit firms and agencies will either lie or confuse many others to think this is true. * Other Goals. Competive pressures, a boss who really doesn't get it, a lack of analytics, a budget that needs to get spent, and a hundred other reasons will cause companies to sign up and pay this money to Yahoo. For the reasons stated above I think lots of people will sign up, and Yahoo will make lots of money. I also think they deserve to be paid for their services. But I don't think that inducing confusion, contradition, and fear is a good business practice. As a result, I think the program will be dramatically changed by its first anniversary. At least I hope so. Note: I realize that the above does not cover all of the details and subtlety of SiteMatch. Others are covering these elsewhere, although the fact that it takes pages to fully discuss it sort of proves my point. I'll get back into more of these details, including the more positive aspects of the program, in the near future. Update: There's now a follow up entry - SiteMatch Revisited

More Lawyers In The Way

The issue of law, trademarks, & Adwords came a few times at the show. At one session I asked if pending trademark rulings were one of the risks the market faced. Not surprisingly, the answer was that Google respects trademarks and didn't see it as a huge problem or risk. Ha.

There was a full panel on the legal issues, but I wasn't able to attend. The slides from that one aren't up yet, so I can't provide any insight from those either.

Dana Blankenhorn at Corante recently wrote and linked in two posts on the American Blinds and Wallpaper lawsuit, which anyone interested in the future of free or paid search should be aware of. (Disclaimer: I happen to be an old high-school friend of the ABW CEO.)

In his first post, Dana says "If Google can't sell ads next to trademarked content, then all advertising is illegal." That's probably overstating it a bit, but it does suggest the can of worms that is this mess. He also correctly blames Google for already giving in to Dell (and Ebay and others) which sets a horrible precedent.

BTW: The irony of Ebay banning the use of its trademark while earning millions operating a search-and-find website using the trademarks of thousands of other companies is just too funny. What if Sony told eBay that they couldn't allow Sony searches because some Panasonic TVs were coming up in the results, which are after all paid results?

This is exactly the problem here, the guilt by association never ends. If I can't buy your trademark in a search engine, can I build a restaurant next to a McDonalds - isn't that the same thing. Don't they put Lowe's next to Home Depot to leverage the brand and ad spend of their competitors. Isn't a lot of comparitive advertising a way to leverage a stronger competitor? But doesn't it also benefit the public a lot more than banning it would? And isn't there a free speech issue here?

I understand why ABW is angry. They're being taken advantage of. Competitors are riding their coat-tails. But really the companies buying these words are just competing. And while it may be a new way to compete, it does not seem unfair or in any way fraudulent or misleading. The only harm that could come to ABW is the harm of losing sales for competitive reasons.

I never like it when people start banning things that were always possible just because they've become efficient. Another clear problem with all this is that very soon buying competitors keywords will be less necessary, because the 'broad match' technology in each of the paid-advertising systems will know that if you sell computers that a search for 'Dell' is a match and put your ads there automatically. And as Dana's article mentions, if you can successfully block related paid ads, how many days will it take until the court action begins to block related free/organic listings?

Misrepresentation, fraud, slander and all such similar activity is and should be illegal and prevented. Speaking, comparing, contrasting, and categorizing isn't illegal and should not be limited.