Google Adsense & PPC advertising

Today Google closed up 11.19%. Three days ago Chris over at WebsitePublisher.net reported making a record breaking amount of money off of Adsense this past September and had this to say:

What I’m curious about is if others have noticed significant revenue increases thanks to Google’s 728×90 redesign, and if so, I wonder if it is enough to move Google’s quarterly results. They report this week, it could be a good time to buy Google stock. I know in the past, being someone who pays attention to these things, when Adsense has done well for me Google has always reported a blowout quarter, so maybe my sample size is enough to show overall trends. I don’t know, but things are definitely looking up.

This is a very good indicator of the health of this industry.

Recently Google banned essay writing companies from advertising on Adwords. College students struggling to complete term papers on their own pay hundreds of dollars to these internet companies for completed work.

I was suprised to find that Google still allows illegal ponzi schemes to advertise with them. HYIPs, an acronym for High Yield Investment Program, is actually a simple ponzi scheme where older members are paid out on the pay ins of newer members. Its kind of like the US’s social security program except one is illegal and the other is not!

Next I checked Yahoo, they too allow these cons to perpetrate. To Microsoft’s credit, when searching HYIP ads were displayed however they directed to sites like ebay and less harmful paid surveys.

It does not take a genius to understand these web sites are scams. Some may first appear “legit” but all you have to do is take a look at their claimed returns. This is easy, common sense stuff. 22% a day? Yeah, I don’t think so.

Consider this excerpt from Wikipedia’s entry on HYIPs — “As a comparison with a typical 1% per day claim, Warren Buffett, one of the world’s most successful investors, made around 30% per year during his most successful period; that is on average, less than 0.1% per day. As the claimed returns of 1% per day are extremely unlikely to be produced legitimately, all HYIPs are therefore likely to be Ponzi schemes, and so most investors will in due course lose their money.”

Still don’t believe me? Do this search on Google — hyip site:*.gov This will give you a list of all of the documents US government web sites have concerning HYIP scams — and thats exactly what they consider them. You’ve got some reading to do.

The Evidence:

I decided to take some screenshots to show you exactly is going on. The first is from Google.com, searching “hyip.” Click to enlarge it to full size.

The first ad is a little wierd. It includes GE’s logo on the page and only claims a 10% return. Perhaps legit? What really throughs me off is the ad copy “Tired of 3-4% Physicians go to work and I get Paid. I like that!” I don’t know about you, but that should send up the scam red flag — oh, and the domain is registered to some Jason Lavin at Golden State Communications through GoDaddy.

Below is a screenshot from another site that showed up on Google when searching “hyip.” The site is hyip-multiply.com and is listed as registered to Elizabeth Tyler at 5426 Rosecrans Lawndale, CA (could be fake whois, no clue.)

(run the numbers on these, I find it pretty hard to believe anyone can deliver me $22 million tommorow if I pay them $90,000 today)

Yahoo’s results were even more obvious that they were scams.

The #1 result was “E-Gold Investment Programs” claiming a 22%-49% daily profit. It mentioned forex investments so I wanted to make sure that it just wasn’t some forex program entrepreneur cashing in on a hot search term.

It didn’t look like it. A screen capture posted below, from their FAQ — http://www.egoldinvestment.org/faq.php — specifically says “you will earn a total of 220% divided into 10 payments of 22% daily” That is definately a claim, not an alleged possible return that top FOREX investors make.

HYIPs are very, very profitable for their owners. Many of their users do understand its a pyramid scheme. The attitude is that as long as I get in early enough, and re-invest my “earnings” I really don’t have much to lose. Thus, HYIPs continue to thrive. But, being a pyramid scheme eventually the smart users pull all their money out and move on. Then the party ends for every on left inside.

This is not a questionable or legal grey area — it is illegal! By allowing these sites to operate on their networks Google and Yahoo are hurting their own reputations and damaging their brands. This carries through to others who choose to advertise on the sites.

One of the screenshots above is from a site asking users to deposit up to $90,000 at once. If someone did that, and lost all of the money, how do you think that would change their opinion of Google or their trust perception of other companies advertising on Google?

Has either Yahoo or Google been too busy to notice the HYIP advertisers? For Google, certainly they spent some time and thought before purging essay writers from the system. Considering that Google and Yahoo will delete your Adwords/Yahoo Search Marketing ads for something as silly as a typo I consider it outrageous that they will allow ads to run claiming to deliver 22% daily returns.

For years Overture’s Keyword Selector Tool has been the most recommended site to use when seeking related key words and key phrases for search engine optimization. Other paid services have come along including Wordtracker, KeywordDiscovery, and Wordze.

In the very beginning I did some dumb things. One of them was taking the Overture data at face value. Although its possible to make money building a straight-forward content site with articles based off of 100 results Overture returns, its damn inefficient.

Overture itself is very easily manipulated. Once I built a website from a keyword with blatently overly inflated results (think 1,000,000+) today Overture shows only 25,000 searches a month.

How about the other tools like Wordtracker? These guys don’t have Google or Yahoo’s data. Instead, they have a small sampling of searches from a meta-search engine or somewhere else. The tool then has to guess how many real searches are made a day. To top it all off, I suspect the data skews hard toward certain demographics while missing other groups completely. (Who do you know that doesn’t use Google, Yahoo, or MSN?)

If you plan on dumping a lot of time and resources into a website based off of overture data, forget it. You want real data? Run a PPC campaign on Google. Yes, if the niche is competitive it could cost you an arm or two. The fact is, unless AOL has another leakage, this is as good as it gets. You will see a real number every day for the actual searches for your keyphrase.

Keyword tools are not worthless. However, what it does mean is you should use them for keyword discovery, not for figuring out what the best keywords to focus on are. A few bloggers prematurely announced the death of the Overture tool giving alternatives free publicity. Right now I am also using Wordze.com. Its only $35 a month, which is really quite a deal considering I’ve found it more useful than the more expensive Wordtracker (which is currently $54 on a monthly basis.)

Here are a few implementation suggestions about mining for search data with PPC. First, turn off the content network. You don’t care about it right now, although it can give you a good indication how saturdated the niche will be for Adsense. Second, use exact match by putting key phrases in brackets [like this.] If you choose to use broad match (just the key phrases by themselves) then log all of your search data. Broad search data will give you an inside peak of what related keywords and phrases Google may be using for their latent semantic indexing.

So, is this expansive? You bet, expect to spend at least a couple hundred dollars for a single test, perhaps even thousands. Hmm, makes $250 for a years subscription to Wordtracker sound dirt cheap. If you want to build more effective sites you need real data; that data is not free.

Via Threadwatch — “Google just went live with Google AdWords/AdSense ads on Myspace.com. It’s part of the search network, so if you’re an AdWords advertiser you cannot opt out of your ads appearing on MySpace.” (example search here, Adsense on profile pages)

We knew this was on its way, but its still big news. Myspace certainly has enough traffic to influence pay-per-click ad markets. Will the traffic convert? If not, it could depress prices across the entire search network. What impact will this have on the Adsense publishing side, if any? After signing a billion dollar deal with News Corp, will Google even be bothered to make quality score adjustments?

Currently Adwords ads are appearing on a search page containing myspace.com results. That means user profiles. Is that really relevent? I am also seeing content ads on your own profile page, logged in view. It is no secret — social networking sites generate a lot of low quality, accidental clicks. Are smaller publishers going to be hurt if advertisers start lowering bids to compensate for massive amounts of garbage traffic?

As an Adwords advertiser I record all of my traffic sources for every single click. Within the next week or so I should be able to have some data to share with you.

Realistically, I think Google already knows this, and has it figured out. In the next few days we’ll know.

Note: As an advertiser you can remain in content but exclude yourself from Myspace, more info here. However, as threadwatch points out you can’t really opt yourself out of the Myspace search.

Google has publicly published what is and isn’t allowed in terms of image placement next to Adsense ads.

A simple summary — don’t place images that make an ad look like site content or navigation. This little trick has made publishers millions of dollars and is particularly common in Myspace layout sites, game sites (flash & web based), Photoshop tutorials, and the list goes on.

Another clarification Google has stated — “What if I place a space or a line between my images and my ads? Would that work? No.”

This official statement on Google still leaves room for interpretation, or the “grey” area as Shoemoney would say. However, Google’s image examples of what isn’t allowed sends a clear message of what you are not allowed to do (click blog link and scroll to the bottom to see.)

I hate tearing into journalists who may not be an expert at the particular subject, but hey this is fair game. Alice LaPlante wrote a particularly sloppy article for Forbes reporting that the ROI for PPC marketing is, in her words, “notoriously hard to prove.”

Affiliate marketers on WickedFire.com had their own opinions to share. Rob_TID said “That’s a great article. The more articles like this in big respected publications like forbes, the less competition we will have from big business.”

Here is the punchline from the article, that makes it enter sloppy territory “There are a number of shopping sites..that offer an alternative to the PPC model. With these, advertisers only pay when there’s an actual transaction.” Hmm, could this be something called, affiliate marketing? Ever wonder how super affiliates make so much money? Its no secret, its pay per click marketing.

I think this writer could have done a wee bit better job than this one page article reported. Yes, absolutely some segements of pay per click marketing are horrendously unprofitable. Its even more unprofitable when you don’t understand the conversion process, have a mediocre product, or are just plain lazy (another quote, this one from a small business owner, “‘The best keywords are too expensive, and what’s the point of buying the more obscure ones?‘”)

Pay per click certainly is a hard game to play, but thats hardly an excuse for a sky-is-falling no-one-makes-money-from-this article from Forbes.

For affiliate marketers making lots of money from PPC ad buys, this is great. For web site publishers, this sloppiness is unneeded.

Aaron Wall made an eye-opening post about Adsense titled “Google Adsense as a Terrible Business Model.” If you think you are going to take things nice and steady and still be making money off of Adsense 10 years from now, you should probably read it.

I’ve decided to list a few positive things about Adsense.

1. It works. If you have lots of diverse content its just about impossible to monetizing it with affiliate offers, your own products, etc. Some people have discovered you can make a ton more money from free, openly indexable content than hiding it behind a brick wall and charging a cover fee.

2. Its a pretty sure bet. This is what gave me the idea to write this post. I was just looking through my files and noticed I have enough failed projects to make a grown man cry. These are sites I build that never made a dime. In contrast, nearly every Adsense site I’ve created and bothered to get a couple of links to makes money. Sure, the total revenue isn’t breath-taking, but its there.

3. Its easy. You have content, you add a code to the content, bam you start making money. Some very basic color/placement testing can have a big impact on your earnings.

These pros are also the reason why there are cons. Truth be told, it works, its a sure bet, and its easy when you have the skills a web publisher needs — being able to write, use a computer, do market research, linkbait, etc. Thats something not everyone can do. Had I paid the market rates for people to do all of this work for me, hell yeah, Adsense sucks as a business model.

There has been some buzz today about Google’s recent update of their Adwords algorithm. The rumours are that this has been done to squeeze the profit margins out of PPC and affiliate arbitragers.

Thinking back to some of Google’s past algorithm shakeups I wonder if it has really helped them. Radical shakeups have made internet-reliant businesses intently aware of search engine optimization. Is it really better to have an entire industry obsessed with gaming the system rather than a handful of “elite” fighting over gambling and prescription drugs?

Its no secret that Google is working hard to recruit the best and smartest candidates as employees. Is that good enough? Will they create a “god” algorithm or will this be a cat and mouse game for the next two decades?

I am happy with the cat and mouse game. Continual shakeups mean new opportunities. It also means that those who are well-diversified have nothing to worry about.

I like ideas with hard data to back it up. Here is a tip that can make you more money with minimal effort.

Over at ForumTrends.com Chris Kenworthy wrote that he found out Firefox users are almost 3 times more likely to click on Google Adsense link units on the very top of a page than IE users. Why? Because Firefox users use tabs.

I have been using horizontal Adsense link units for a long time. They perform very well despite sending users to a pretty ugly page and requiring two clicks for monetization rather than one. Personally, I would love to see Google allow Adlink integration like they have done with Adsense for search.

As you may or may not know, Google offers a domain parking service for high-traffic domain investors. As an Adwords advertiser a lot of traffic comes from these sites. While some people consider a web site with no content but ads a con or scam, I have found domain traffic to work modestly well.

Since some of my campaigns do particularly poorly in either search or content, I will often change my bids or turn one of the networks off completely. My question was, does Google’s domain parking traffic qualify as the search network or content network?

Here is the response I recieved:

Thank you for your email. I understand that you would like to know if AdWords ads syndicated through Google’s domain parking qualify as search network or the content network. Please note that ads syndicated through Google’s domain parking qualify for both search network and content network.

Google AdSense for domains is part of Google’s family of monetization services that enables effective and legitimate distribution of your ads. It has been proven to deliver high quality and high value traffic to advertisers. Like all our ad solutions, advertisers are only paying for the actual click generated once their ad shows, not for the impression.

Being on both the publishing and advertising sides of the playing field gives me a two-viewed approach to these issues. On one hand, as an advertiser I would like to be able to pick and choose traffic channels very specfically based on how the traffic converts. Since AOL traffic converts great, being able to bid double what I pay on Google’s SERPs could help increase my profit margins.

On the publishing side of things, I don’t want to miss out on potential income because a really picky advertiser thinks my site is ugly. If all traffic is created equally then I can increase my income by sending lower quality traffic to advertisers in volume.

Thats not all. Some publishers are concerned that a massive volume of Myspace traffic (thanks to a billion dollar deal signed with Google) is going to drive down their revenues. PPC advertising is a real market and more inventory between the same number of buyers will impact your revenue.

Traffic discrimination based on the source is an interesting issue. Whether you are an advertiser or a publisher you don’t have a whole lot of choice. Google is looking at these issues from one perspective — their’s.