September 2006 Archives

With the media coverage that hit this week, click fraud is back on the front page. As we discussed earlier this week, that's a good thing. For a more detailed picture of the issue, look here.

Alan Chapell provides a thorough overview of the click fraud problem, past, present and future.

An interesting perspective on the social dimensions of click fraud from FreeCashSpace.

Other advertising models offer some protection from click fraud. A balanced assessment of the CPA (cost-per-acquistion) model from The Equity Kicker.

HitTail offers advice to advertisers who want to take matters into their own hands when it comes to eliminating click fraud.

An outstanding article from BusinessWeek that runs down alternate advertising models and techniques advertisers use to reduce click fraud.

News or ideas to report? Please let us know!

This week's cover story in BusinessWeek is "Click Fraud, The Dark Side of Advertising". Some highlights:

"Fleischmann is a victim of click fraud: a dizzying collection of scams and deceptions that inflate advertising bills for thousands of companies of all sizes. The spreading scourge poses the single biggest threat to the Internet's advertising gold mine and is the most nettlesome question facing Google and Yahoo, whose digital empires depend on all that gold."

"'Paid to read' rings with hundreds or thousands of members each, all of them pressing PC mice over and over in living rooms and dens around the world. In some cases, "clickbot" software generates page hits automatically and anonymously."

"Spending on Internet ads is growing faster than any other sector of the advertising industry and is expected to surge from $12.5 billion last year to $29 billion in 2010 in the U.S. alone, according to researcher eMarketer Inc."

"Most academics and consultants who study online advertising estimate that 10% to 15% of ad clicks are fake, representing roughly $1 billion in annual billings."

Advertisers continue to spend heavily online despite the concerns. Why?

1. As one reader points out on the BusinessWeek post, waste occurs in almost all forms of advertising. What distinguishes the PPC medium is how accurately the waste can be measured.

2. PPC is effective.

3. PPC is inexpensive compared to print advertising.

4. More and more people are abandoning print media and coming to search engines to find products and services.

Still, advertisers are not taking click fraud lying down. Some are seeking legal remedy. Earlier this year, Google settled a class action click fraud suit with a $90 million payout. That may inspire the secretive search engine leader to do a better job of policing its ads. New advertising models may also ease the pain. CPA, or cost-per-acquistion, is an advertiser-friendly online approach where publishers are paid only when specific actions are taken by the customer.

The BusinessWeek article is a positive step. Perhaps more than anything else, awareness of click fraud will lead to less of it.

Competition between Google and Microsoft is heating up on several fronts. An area of special interest to us is in the pay-per-click arena. Yahoo! Search Marketing hasn't put much of a dent in Google AdWord's market share. Can Microsoft's adCenter fare better?

Tech Quotient presents a thorough overview of Google versus Microsoft on all fronts.

Josh Einstein voices concerns over the adCenter back end. He is not alone.

But then, some rant just as loudly about Google's customer service, as Matt Heaton's post and ensuing discussion make clear.

Matt Grehan from ClickZ discusses the relative merits of personalization versus customization. In his view, that is what separates AdWords from adCenter.

A look toward the future from Random-Success.com. The competitive dust won't be settling any time soon.

Thoughts to share? Please let us know!

MSN adCenter, Microsoft's paid search advertising platform, is out of beta. Will it pose a serious threat to Google AdSense? Those who think not offer a variety of reasons.

1. Google's marketshare is enormous--over 60% of search volume. MSN trails far behind with about 11.6% of the search volume.

2. He who starts first wins. AdWords has a proven track record and a loyal customer base. Advertisers will not be quick to abandon ship.

3. Having enormous resources and focus,Google continues to develop AdWords features. No matter how aggressively Microsoft improves adCenter, they are chasing a moving target.

4. Although it has some innovative features, adCenter's back end is clumsy and buggy. This translates into highter management costs for adCenter PPC campaigns--a seriously liability in PPC, when every dollar counts.

Despite all this, some are more optimistic about adCenter's chances.

1. Microsoft is no slouch when it comes to spending money and developing new products. Even if adCenter is not running smoothly today, it soon will.

2. adCenter offers exceptionally robust demographic and behavioral targeting. Advertisers can direct ads to an audience based on geographic location, gender, and/or time of day or week. In theory, this assures higher conversion rates. In practice (see above link), it appears to be happening.

3. At the moment, adCenter keywords are less expensive than on AdWords, because fewer advertisers are bidding. While that dynamic will change as adCenter develops volume, right now advertisers have a pocketbook incentive to try it. If relatively high conversion rates hold, adCenter will establish its own loyal customer base.

There's no two ways to look at one thing. Regardless of the outcome, all this heavyweight competition will give online advertisers better options and tools. The future is bright for PPC.

Open Source might be described as The World vs. Microsoft. The trend towards free, standardized software is undeniable, but Microsoft still owns enormous market share and wields plenty of clout. Take a look at what industry experts see ahead.

First some background. Linux paved the way free software. Ragib Hasan chronicles the history of Linux and how it revolutionized the industry.

From the past to the future. Harvard Business School professors debate whether Open Source can dislodge Microsoft.

A different take on the how and why of Open Source from Tim O'Reilly, along with a lively and informative technical discussion.

Devoloping news about a millionaire cosmonaut gearing up to take on Microsoft with a new Open Source operating system.

Case studies from the Open Source Strategies blog that shed light on why companies implement Open Source.

Information or views to share? Please let us know!

Is your Web site W3C compliant? If not, call us tomorrow. Do you know what W3C compliant means? If not, call us yesterday.

Why the urgency? Because if your Web site is not W3C compliant, your marketing dollars will go to waste. Your organic and paid search engine marketing efforts will come up woefully short.

W3C stands for World Wide Web Consortium. It's mission:

"To lead the World Wide Web to its full potential by developing protocols and guidelines that ensure long-term growth for the Web."

Early on, software companies--Microsoft most notably--almost always released proprietary products that did not necessarily interface with other, competitive, software products. And, because the programming was proprietary, manufacturers could charge for add-ons and upgrades, providing a steady stream of aftermarket revenue.

Years back, Linux challenged this traditional model with "open source" programming, which made source code accessible and free to any user. Recently, open source has taken off and is gaining unprecedented momentum with software developers across the globe. One of the biggest attractions of open source is wider usability. To quote W3C again--

"In order for the Web to reach its full potential, the most fundamental Web technologies must be compatible with one another and allow any hardware and software used to access the Web to work together. W3C refers to this goal as “Web interoperability.” By publishing open (non-proprietary) standards for Web languages and protocols, W3C seeks to avoid market fragmentation and thus Web fragmentation."

For Web site design, adhering to W3C standards is critical for effective SEM.

Organic search. Search engine spiders are apt to overlook Web pages when HTML code is not W3C compliant. If your Web site is invisible to the major search engines, it will be invisible to your customers.

Paid search. A pay-per-click (PPC) campaign can generate an enormous amount of qualified traffic and new business. But what if a prospect clicks on your ad but then can't read your Web page because it doesn't load properly on his browser? There once was a time when Web pages could be programmed to run on Internet Explorer, period. Today, Firefox 1.5 and other open source browsers have significant market share and continue to grow in popularity. Your Web site needs to incorporate W3C standards to be viewable by all your potential customers.

Maintaining SEM effectiveness in the midst of rapidly evolving technology is no easy task. Employing W3C standards will help--don't overlook them.

Everybody knows MSN adCenter is on the move, but where is it heading? The following posts provide some answers, both for the big picture and the little picture.

Ben Elgin and Jay Greene explore how Yahoo! and MSN are trying to stop Google from taking over the PPC world.

Details on new adCenter features and development from Lisa Barone at Bruce Clay, Inc.

A fascinating discussion about PPC innovation and effectiveness sparked by a recent Don Dodge post.

From SEOmoz.org, an in-depth interview with MSN's search team.

Scott Karp offers some sobering opinions. How much PPC is too much?

Opinions to share? Please let us know!

MSN adCenter is off and running as the latest platform in pay-per-click (PPC) advertising. Whether it can compete with Google AdWords remains to be seen, but adCenter does have three things going for it--exceptional targeting capabilities, MSN data, and Microsoft money.

With adCenter, advertisiers can target users based on gender, geography, and time of day or week. Although keyword costs rise with greater targeting, the cost figures to be more than offset by higher conversions. So far, adCenter conversion rates versus Google and Yahoo! are indeed higher.

MSN's enormous database makes this nifty targeting work. MSN collects user information from subscriptions and registrations for its many news and service Web sites. With upwards of 40 million users, MSN offers advertisers a market far too large to ignore.

And having just brought adCenter out of beta in August, Microsoft continues to enhance and invest in the platform. adCenter Labs, adCenter's research center, will be rolling out new behavior predicting, forecasting and analytic tools to further help advertisers minimize costs and maximize conversions. Microsoft recently acquired DeepMetrix, a Web analytics firm, which will be integrated into the adCenter platform by mid-2007. DeepMetrix is one of twenty-two acquisitions by Microsoft this year, and there is no sign of a letup.

Whoast recognized the potential of adCenter early on, and has been using it frequently for PPC campaigns of varying size. We will be reporting on our impressions in future posts, and we welcome your feedback and opinions on adCenter!