Google Adsense & PPC advertising

What do Domain Kiting and PPC arbitrage have in common? Not much.

A reader, J-P, made a comment under my post: Pathetic Post of the Day, Calling PPC Buying Publishers Con Artists. J-P thinks that most sites in the PPC arbitrage game are involved in “domain kiting” and are in fact criminal. I think J-P is wrong and here is why:

PPC arbitrage is the practice of buying incoming PPC traffic and sending it out through a higher paying PPC traffic stream. Typically this involves buying penny clicks on second or third tier PPC sites and sending them to a page with higher paying Adsense or YPN PPC ads. This is not fraud because the visitor has to consciously read and click the ad just like they would on any other site. I have observed from my affiliate campaigns that traffic on arbitrage sites does convert, so lets leave conspiracy theories aside on this one. (That being said, turning a profit from PPC arbitrage is no walk in the park.)

The second issue is domain kiting — which is unrelated to PPC arbitrage. Domain kiting was a term coined by Bob Parsons of Godaddy.com. Wonder why you search for available domains, come back a day later and they are registered? This is why. Click the Bob Parson’s link to get an in depth look at what is going on here.

Here are my personal views on the two issues:

Domain kiting is a problem with ICANN and Verisign’s rules. Perhaps an issue that could go to civil court but certainly not criminal, unless something else illegal is going on here — which I seen no evidence of.

PPC arbitrage — a completely separate issue — is a good thing. Just as there is nothing wrong with buying and reselling stocks, there is nothing wrong with buying and reselling internet traffic. This is an evolutionary market. As in any other real market some people don’t like arbitrage. Capitalists are called profiteers & exploiters, domain investors used to be called squatters, and the list goes on. This is the free market — and it works.

A few days ago I recieved an e-mail about a class action lawsuit, today I recieved two mailings about it one addressed to me, the other one of my LLCs. Since it appears any US resident/company advertising on Yahoo Search Marketing has recieved this, I am going to comment on it.

The search engines are feeling a lot of pressure over click fraud right now. Its a multi-billion dollar industry so obviously it is going to attract trial lawyers. Last week Google released a report refuting many of the click fraud claims that click auditing companies, such as Adwatcher have made. (For the record, I use Adwatcher, and I have recieved refunds from PPC companies based on the data it has collected.)

Since Google has been the main target it is not suprising that Yahoo has now also come under the crosshairs in this Checkmate vs Yahoo! Inc suit filed in California (by a Florida corporation against a Delaware corporation.. interesting.)

I was reading over the papers and found this very interesting:

“..including improperly collecting revenue by charging and/or overcharging Class Persons for clicks that were click fraud, click through fraud, fraudulent clicks, click spam, invalid clicks, unwanted clicks, unqualified clicks, improper clicks, non-converting clicks, inadequately converting clicks, clicks that were not reasonably expected by Class Persons or otherwise claimed by Class Persons as clicks for which Class Persons should not have been charged, and improperly collecting revenue by charging and/or overcharging Class Persons for clicks where users did not actively choose the Class Persons’ listings”

May be I’ve been in the dark, but since when is “unqualified clicks, improper clicks, non-converting clicks, or inadequately converting clicks click fraud?

I was thinking about this and I may have an explanation. One thing I have noticed with Yahoo Search Marketing is they like to change your ad copy for you. I have had both title and description mysteriously turn in to something I did not submit nor approve — and I have heard others say the same.

As usual, this just looks like a case to make some trial lawyers millionaires and hand out the actual plantiffs a couple of dollars (or coupons.) I’m not participating.

Amazon has launched a new program, called “Amazon Omakase.” What it does is not only pull contextual data from your page to find relevent products but also use behavioral data to display products the visitor looked at previously on Amazon.com.

Chris from WebsitePublisher.net who broke the story of Amazon entering the contextual ad market suspects that Omakase is what they were talking about.

I am not a member of Amazon’s affiliate program so I haven’t been able to test this out. First, I wanted to know if I could even run this on pages with Adsense. Other blog posts said it was ok, but I wanted to hear this first hand. What I heard was neither a yes or a no:

Hi Andew,

Thanks for asking about running additional ad services on your web pages. While we’re unable to comment directly on Amazon Omakase ads, in general, AdSense program policy does not permit Google ads to be published on the same page as other contextually-targeted ads.

Wow, that was informative!

If you are like me the technical aspects of this business easily become stopping points. Recently I’ve been having problems getting geotargetting working. Lucky for me John West, aka Westech, has written an article over at WebSitePublisher.net on setting up ad geotargetting with php.

Why is this important to do? First, Yahoo doesn’t want non-US traffic right now from YPN users. At best they won’t pay you for it, at worst they’ll kick you out. Many publishers have reported higher earnings from YPN over Adsense, yet they still have international traffic. It makes sense to geotarget YPN ads to your US traffic while delivering Adsense to the rest.

I want Yahoo’s YPN to do well. Solid competition with Adsense is good for publishers. By commoditizing contextual advertising publishers will recieve a bigger chunk of the revenue pie.

That being said, Yahoo has some serious issues they need to work out before YPN comes out of beta. A recent post on the official Yahoo Publisher Network really made me realise how sloppy some of the things they have been doing are.

Number one: Yahoo says “we don’t want international traffic.” Filter the traffic out in the first place, don’t kick out legitimate publishers who aren’t even getting paid for the international clicks. Setting up geo-targetting in phpAdsNew is not easy for everyone.

Number two: Get in line with Google’s standards. Right now Yahoo makes general statements about not placing images next to ads, while Google is doing it themselves.

Number three: The recent things not to do post says “Don’t use inappropriate ad targeting. If your site is about flowers, it’s not cool to be targeting finance.” Why should that even be an option?

Number four: This statement on that blog post really sticks out to me “Don’t go nuts with the ads and place them all over every page like they’re your content or something. It looks like you are trying too hard.” What the hell is that supposed to mean? Perhaps that we should stick the ads in the yellow and white areas instead of orange?

Number five: Get rid of this delayed auditing stuff. Publishers need to know no later than tommorow what they made today. End of month auditing is like trying to drive a car with a patch over one eye.

I understand that YPN is still in beta, so these slip ups are understandable and excusable. However, these issues do need to be resolved.

Last week Yahoo’s stock took a serious hit. I don’t own any of their stock, or really understand the details around the drop. From what I heard it had to do with delays in their ad program.

All Yahoo has to do is make YPN as close to Adsense as possible, but pay more and Google’s revenues will start to slide while Yahoo’s rise. If Microsoft really wants to damage Google they should buy Yahoo and crank that revshare up to 95% or so; then Google will be in trouble!

Are you geotargetting Yahoo’s PPC ads to the US? If not, you might think about doing so. Several publishers have been kicked out of the program recently for sending international traffic to Yahoo. Most recently, Chris from WebsitePublisher.net blogged about getting the boot. Some publishers have gotten kicked out despite having reps specifically telling them they would not be!

I am a little confused at why Yahoo can not do the geotargetting themselves, or at the very least just not pay for international clicks and let the publishers stay in the program. Perhaps they have another motive here? At least we can give Yahoo credit for paying what they tell publishers they will pay. In contrast, newbie Chitika issued suspicious account “audits” deducting up to 90% of publishers accumulated revenues.

Here is a solution to geotargetting your ads - phpadsnew.

I don’t like quoting big chunks of other people’s writing, but this is too good to pass up:

“Of 133 advertisers who control over $20 billion in advertising, 78 percent feel TV advertising’s potency has declined since 2004. When DVR penetration gets above 30 million households, 24 percent will cut their TV ad budgets at least 25 percent. They’ll reallocate that money to online and other channels. More than three-quarters will invest more in Web advertising; almost 70 percent will spend on SEM”

Yet another positive signal for publishers and domain investors..

In the article Bryan Eisenberg goes on to ask if your company could absorb an increase in ad spending by 4x. Where is that money going to go? Yes, to the search engines, but also to publishers. With Yahoo and now MSN jumping into the contextual ad network game that means there is going to be a big squeeze on how much money Google can get away with pocketing.

I feel like I’m going on a post rampage today, but I couldn’t pass this story up. Cnet reports that a new study has found the Internet is the #1 most used media; that trumps TV, newspapers, magazines. Here is the real kicker: “studies have shown that only about 8 percent of advertising goes to the Internet.”

Despite what some “experts” have called a PPC advertising bubble, I see the potential for very strong growth in internet advertising. I’d say that see these numbers double would be a conservative estimate. For publishers and domain investors this is great news. For those that rely on buying traffic to turn a profit, not so great.

A year ago I tested out Google’s Adsense for Search on one of my sites without much luck. It got a couple of searches a day and I could count the revenue in cents. I got rid of it and forgot about it.

Fast forward to yesterday; I re-implemented Adsense for Search into one of my sites. So far, I am impressed by the results.

So how does this help you out beyond revenue? It helps because Google tells you what your visitors are searching for.

Of course you could find this same information out by inserting your own search program, but using Adsense for Search is a lot easier.

After logging in to your Adsense account scroll all of the way to the bottom. Under “AdSense for search” click “Top Queries.” What are the top keywords? If your web site does not have that content, put it in. If it does, make it easier to find.

As an added bonus I’m willing to bet that search engine visitors are looking for these same keywords. Your top searches may be something you never even thought of when building your keywords list.

Google’s official Adsense blog has posted a new case study featuring dogbreedinfo.com. After removing the borders from the ads revenue doubled from about $300 a day to $650 a day. If Sharon (the site owner) would have read my optimization secrets article a little sooner, she might have been making this much months ago.