Click Fraud Rate Climbs to 16.6% in Q4

The overall click fraud rate for the pay-per-click (PPC) industry averaged 16.6 percent in the fourth quarter of 2007.

The rate of click fraud for all of 2007 was up 15 percent over 2006 levels, according to Click Forensics, citing data from the Click Fraud Index, MarketingCharts reports.

Key findings from data reported for the fourth quarter:

• The overall industry average click fraud rate rose to 16.6 percent for 4Q07. That's up from the 14.2 percent click fraud rate in the fourth quarter of 2006 and 16.2 percent in 3Q07.

• The average click fraud rate of PPC advertisements appearing on search engine content networks (such as Google AdSense and the Yahoo Publisher Network, but also smaller players) was 28.3 percent in Q4. That's up from the 19.2 percent average click fraud rate for the same quarter in 2006 and 28.1 percent for 3Q07.

• Q4click fraud traffic from botnets was 15 percent higher than click fraud traffic from botnets in Q3.
• In Q4, the greatest percentage of click fraud originating from countries outside North America came from India (4.3 percent) Germany (3.9 percent) and South Korea (3.7 percent).

Why Google keywords cost more but deliver less

Google is changing the keyword game. Find out what you need to do to stay ahead of the curve.

Quality Score has been on everyone's mind recently. Everywhere I go and everyone I speak to has a story about some great keyword that he or she was buying and making a huge profit on until Google gave the user's site a poor quality score. Now the user can't afford the minimum bid. I often hear things like "It's not fair," "Why doesn't Google want to make money?" "My landing pages have good content; it doesn't make sense" and "Help Me!"

The truth is that Google is trying to take the principles that make its organic search results the most beloved in the world and apply them to its paid search results. What does this mean for you as an advertiser? It means you need to take the strategies used for SEO and apply them to your paid search. You need to stop thinking in terms of landing pages and start thinking about your landing page as one small piece of your entire domain. You also need to take the advice Google gives you and give it no reason to hurt your business with a poor quality score.

What Google tells us to do
Google preaches one thing: quality experience -- for its users and your potential customers. To that end Google has taken it upon itself to ensure that the page you deliver is of high quality. Here's what the company says it is specifically looking for:

• Relevance: This is a no-brainer: If you sell electronics and someone clicks on your ad for a "digital camera," send them to your digital camera page, not your home page.
• Originality: Okay, that's a weird one. Google specifically says "Feature unique content that can't be found on another site." Uh-oh, does this mean that my RSS feeds from related content sites aren't helping me? Probably not. If Google says they want content that can't be found on another site, then you can be sure they're searching for your content on other sites. If they find it, your quality score will suffer.
• Transparency: This covers the general best practices -- like being open and clear about the nature of your business. If you offer a downloadable product or collect personal information from your users then there's a lot to know and follow in order to stay on Google's good side.
• Navigability: Make it simple for users to find what they're looking for. Keep the sales process short and to the point. Don't use things like pop-ups, pop-unders or sliders.

Okay, so all of this seems manageable, but is this it? Is there anything else to it? I think there is. As Quality Score evolved over the past two to three years, Google always apprised us of changes. That all ended in a September 18th blog post where they announced that they "will no longer post advance notice of upcoming updates." This means you can't take anything for granted anymore. It has been since this blog post that most people have started having serious problems. What can you do about it? Here's some help.

Here's a real world example:

A search on Google yields many results. Circuit City is doing a good job with their efforts. The company has a relevant ad obviously set up with dynamic keyword insertion.

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And the ad directs to a landing page that covers all of Google's stated must-haves.

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Relevant: This page is definitely all about Digital Cameras. It covers every manufacturer with well-tagged images, and the title says "Digital Cameras at Circuit City." Notice also the great third party sources like ConsumerReports.Org. This really adds credibility to the page.

Original: The content is original because it has user and editorial reviews -- a must for any popular product website. Without user and editorial reviews it is very hard to generate fresh original content.

Transparent: This is not much of an issue for a well known e-tailer like Circuit City, but they do have their phone number in bold black text on every page, Contact Us on the bottom, lots of links to FAQs, Help etc.

Navigability: It's very easy to go in and out of top level categories, like Cameras, Phones etc. Then once inside a top level domain the site makes it very easy to navigate by price, manufacturer or primary feature set.

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Not wanted
Some of you are going to have a very hard time because Google is specifically targeting your site for removal. If you're wondering which sites fall in this particular group, Google has laid it out. Here's what they don't want:

Data collection sites: What, no more free iPods?

Real world example:

These sites, which showed up when I searched around for recipes, are in for some trouble. Users don't really get recipes, they get to give all of their personal info, sign up for some offers, get spammed and then they may get a free cookbook. Not a good experience.



Arbitrage sites: The bane of Google's existence.

Real world example:

Sites like this are going to have trouble in the future. I did a search for Screensavers on Yahoo and got an ad for Pronto. When I clicked on it, it took me to a page showing Google search results for the same query. Pure arbitrage. I couldn't find them on Google. Clearly arbitrage is Google's first, and most important, target. And that's a negative.

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Malware sites: Of course they're on the list. Problem here is what is Google using to distinguish good software from bad software? Here are more guidelines for software publishers to read and follow.

eBook sites "that show frequent ads": Scrape together a bunch of content, wrap it all with tons of ads and make a good site? Not anymore. Here's where unoriginal content gets hit.

Get rich quick sites: (But I love pyramids!) Anytime making money is "Guaranteed" you know the business, and the site, are garbage. We should see the end of these sites on Google very soon.

Comparison shopping sites: This was a bit of a surprise but makes sense. Google really wants to stop arbitrage and this is an arbitrage play. Pricegrabber, Shopping.com and some of the big guys might be able to make it. If you're in this business and want to protect yourself, offer original, unique value to your users. That could be reviews, warranty info, user opinions and more. If you don't, you could see your minimum bids rising soon.

Travel aggregators: This is another arbitrage victim. Follow the same advice I gave to your buddy above. One example is Travelocity -- is it in trouble? Probably not. But others trying to get into the space will have a tough time getting a foothold. What's the key to getting up and staying up? Original content, relevant results based on the search and some sort of value given to the user.

Okay, what about the rest of us who don't fall into those categories? I'm sure lots of you are saying "I'm not one of those, and I still have a bad quality score." Here's what you need to do: Make your site better. Notice I didn't say make your landing page better. There's a reason for that. Slowly word has been spreading that Google is not doing an evaluation of your landing page, they are doing an evaluation of the entire domain your page lives on! Whoa. So if you have a 2,000 page site about mortgages and you dedicate one page to car loans, no matter how good that one page is, don't expect to get a high quality score when it comes to your relevance to car loans. To Google, your site is about mortgages. So what specifically should you do? Revert to your SEO strategy and rebuild. Here's how:

Cover the basics: Conduct your link exchanges with relevant websites. Make sure your titles, meta tags and descriptions are all well put together.

Choose a topic and stick to it: Each domain should focus on one thing. Don't try to cover too many products or topics on one site. We can't all be Wikipedia.

Add a site map: Make it easy for Google to find your pages and content. Use the Sitemap Generator that Google recommends.

Page rank: If you have a few sites to choose from, choose the site that has the best Google page rank. Chances are that if the natural search algorithm likes it, so will the quality score.

Add a blog: A blog does many things. It keeps a dialogue open with your users, it gives you the original content Google is looking for and it gives you an easy way to update your site often. All of those are positives in Google's eyes.

Make a good site: At the end of the day this is the best advice. Google wants to show users quality sites, whether through natural search clicks or paid clicks. Your best defense is building a large, well-thought-out website and sending your paid clicks to the most relevant page on that site for that click. The days of the quick one-off landing page are over. Are you ready?

Google sees mobile as its future, but the company's success in the mobile realm may not be a slam dunk.

With half the world's population soon owning a cell phone, the opportunity to reach more people on the Web via a mobile device is huge. Research firm Gartner predicts that worldwide mobile advertising revenue will grow from less than $1 billion last year to $11 billion in 2011. Google has already been adapting its Web search, mapping service, and advertising tools to work on mobile phones. And it's even bidding in a U.S. auction of wireless spectrum and developing software for mobile phones.

The company has also spearheaded the Open Handset Alliance--which advocates open standards for mobile software--in an effort to coordinate its work with that of handset makers, chip developers, application developers, and cell phone operators.

Because Google has dominated search and advertising on the traditional Internet, the expectation is that the company will also take the mobile market by storm using the same tools and the same strategies. But shoehorning its existing Web tools and applications onto a tiny mobile phone isn't going to be easy. If Google is not careful, it may find itself chasing some new, innovative start-up that figures out how to out-Google Google in mobile.

"In some ways Google is now the incumbent," said Farhad Divecha, director of the search and mobile marketing firm AccuraCast. "Their search products and advertising tools aren't the best right now, so there's a good chance someone could come in and do it better."

Back to basics with search
Google first came on the scene a decade ago with a new search algorithm that could serve up better and more relevant content to users than had ever been done before. So while other companies, such as Alta Vista and Yahoo, had been in the search business for years before Google came along, it was this giant leap forward in the user experience that catapulted the company to success.

It is not surprising that search was one of the first tools that Google adapted for cell phones. And by most accounts the tool works fine. When used with the Google Maps application, mobile users can even search for local restaurants and get directions to each establishment.

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But critics of Google's mobile search tool say its results aren't always as relevant as results from a desktop Google search. Another common complaint is that Google provides search results from regular Web pages and tries to trans-code them for mobile phones. Often these sites don't render well on certain phones.

Yahoo Go, a similar application, is considered more robust and more user-friendly than Google's search tool.

"Yahoo has been far more aggressive than Google in doing business development relationships with handset makers around the world and thus has more direct handset and carrier deals," said Greg Sterling, principal of Sterling Market Intelligence. "Of the two companies, Yahoo is probably farther along in some respects than Google is."

Google is also limited in the information it can gather about a subscriber's usage patterns and location because carriers are unwilling to share subscriber data, said Jorey Ramer, founder and vice president of corporate development for JumpTap, a company that provides mobile search and advertising software used by mobile operators to develop their own search services.

JumpTap, which is currently working with 16 carriers around the world, is able to access this user data because it collaborates directly with these carriers, Ramer said. Google, on the other hand, could become a direct competitor to carriers, including Verizon Wireless and AT&T, if it wins spectrum licenses in the 700MHz spectrum auction now being conducted by the Federal Communications Commission. What's more, Google's business model depends on its consumer brand and its direct relationship with consumers. Ceding too much control to Google makes carriers nervous because they don't want their services to become commoditized.

"Carriers appear less likely in the near term to partner with the portals (such as Google) because they know what they will have to give up in exchange," said Brian Cowley, chief executive of mobile ad provider Ad Infuse.

Tracking advertising
Google has also adapted some advertising products to mobile, including its AdSense program, which matches ads to a site's content, and AdWords, which matches key words in ads with search results. These services work well on a mobile platform, according to Google. But the problem is that their results are difficult to track, which means advertisers or Web site owners may not be able to tell the effectiveness of their advertising campaigns.

One reason is that "cookies"--the little digital tags that are left on a computer when someone searches or clicks on a Web page--expire much sooner on cell phones than they do on PCs. Sometimes they are even blocked entirely by certain carriers. And most handsets are shipped with cookies disabled by default. Without these digital tags, it's hard to track clicks.

On Wednesday, a company called Bango, which facilitates billing for mobile-content owners, announced Bango Analytics, a tool that provides detailed data on mobile advertising campaigns.

"Google can tell an advertiser how many clicks they've gotten," said Martin Harris, senior vice president of sales for Bango. "But they can't say who or where the clicks are coming from. This makes it difficult to track and see how well an ad campaign is performing. Bango can provide the detailed information, because we've been working with carriers for seven years doing billing."

Google admits that not all of its services and applications work perfectly in the mobile environment. But the company believes that the market is still young, and it is working to improve its products.

"Broadly speaking, things that work on the Internet don't translate perfectly into mobile," said Dilip Venkatachari, a director of product management with Google's mobile team. "There are some issues. But we are very proud of the search and advertising experience we've created for mobile."

Venkatachari believes that Google is well positioned going forward because of its experience on the Web.

"The mobile channel is no different than any other channel that we work with," he said. "We can deliver a compelling user experience by bringing our core DNA and what we've done in the traditional online world and sharing that with mobile."

Moving slowly--but still dominant
In an effort to help bridge the gap between the mobile and desktop Internet experiences, Google is developing Android, a new open software platform for cell phones. The idea is that this new software platform will allow Google to more tightly integrate its applications in handsets and services. And should Google succeed in its bid on wireless spectrum, that spectrum could eventually be used to build networks that allow connectivity from any device.

But even these efforts are not going as smoothly as the company may have hoped. In November, Google released an early version of its Android software development kit. Some developers have complained that the software is overly buggy and not ready for prime time. Google said on its blog at the end of January that it had updated the software development kit based on developers' feedback. And it extended the deadline for its Android Developers Challenge to April 14 to give developers more time with the updated software. Google has set aside $10 million in prize money for developers who create programs for the new platform.

Android phones are expected to hit the market later this year, and some early prototypes will be on display at the Mobile World Congress in Barcelona.

There have also been reports that Google is hitting technical snags in developing new mobile applications. Last summer, The Wall Street Journal reported that Google was developing a search tool to help consumers find and buy ringtones, games, and other mobile content. The company was supposedly in talks with large content owners, but so far no such service has been announced. Google declined to comment on these efforts, saying that it does not comment on rumors.

Google's critics say this is evidence that the company is vulnerable when it comes to mobile.

"Google is struggling in mobile at the moment," Bango's Harris said. "They are very desktop-centric. They understand the Internet better than most. And they've created this expectation that they can shift everything to mobile. But you can't just lift the technology from the Web and simply put it on a mobile device. It just doesn't work that way."

That said, Google still dominates in search and advertising both on the Web and on mobile. Consumers know the brand. And even when Google's search application isn't easily accessible from an operator's menu, consumers still find it.

"The threat that someone could outdo Google is there," said Divecha. "But how realistic the threat is is questionable. Google doesn't have a great search tool, but the problem is that nobody else does either. And for someone to overtake Google, the technology advancement will have to be more than just incremental."

What Can Widgets Do?

FEBRUARY 5, 2008

What the heck is a widget, or what is sometimes called a gadget, badge, module, capsule, snippet, plug-in, mini or flake?

Widgets are basically embedded code in an HTML page. And whatever you call them, they are popping up all over the Internet.

Since Facebook opened up to third-party applications in May 2007, nearly 15,000 applications have been developed. Overall, some 100,000 developers are working on widgets and applications worldwide.

All the excitement aside, eMarketer estimates that US companies will spend only $40 million in 2008 to create, promote and distribute widgets, up from $15 million in 2007.

The figures do not include desktop widgets, which are downloaded and used by a single user.

”Despite the level of activity, questions about the future of widgets and applications persist,” says Debra Aho Williamson, eMarketer Senior Analyst and author of the new report, Web Widget and Applications: Destination Unknown, “Are they a fad or are they the future of Internet marketing?”

Concerns related to Web widgets and applications include “application burnout,” measurement difficulties, distribution challenges and deceptive techniques used by some widget developers to increase their installation rate.

But for every nay-sayer, widgets also have many proponents.

In a sign of how much widgets have intrigued the marketing community, 58% of attendees at last December’s iMedia Agency Summit said they thought widgets would play a bigger role in their strategy than mobile.

”The online landscape continues to evolve,” says Ms. Williamson. “Even as the audience is fragmenting, young people are spending more and more time within social networks, leaving less time for other Web activities.”

According to a Dynamic Logic survey, 51% of Internet users ages 18 to 34 reported visiting a social network site at least once every few days.

”Some people believe that social networks are becoming ‘walled gardens,’” says Ms. Williamson. “So many advertisers are experimenting with widgets as a way to penetrate them.”

Widgets would seem to be a natural fit in a world where consumers time-shift television, check user reviews before they buy, mash up Web content from various sources and spend hours customizing their social network profile pages.

“One of the hallmarks of Web marketing and media over the past year has been decentralization and syndication,” says Ms. Williamson. “The general idea is to reach consumers where they spend their time, rather than force them to come to a destination.”

The widget industry supports this idea wholesale.

“The days of digital ad sales where you buy a banner and [consumers] click on it and go to a Web site, that’s dead,” says Chris Cunningham, founder of a the widget and application marketing company AppsSavvy. “The idea that media companies or brands need to make a destination of their own is completely flawed. Rather than drag people to a destination, [companies can] take some content they want to showcase and bring it to people.”

”Given the grand ambitions of the widget and application market, and the social networks that support them,” says Ms. Williamson, “the business still has a lot of growing up to do before it can attract significant dollars from major marketers.”

Pay-per-click advertising unpredictable and complex

This finding came from a survey commissioned by Dutch firm Toading and conducted by Pulstracker. It was found that 71% of surveyed companies in Europe claimed some deterioration, with 21% of the total complaining of a major drop in performance.

The principle cause for this decline, according to the surveyed companies, was likely to be increased competition within their own industry sector, as more pay-per-click advertisers in their space had pushed up the bidding for keywords (63%). Nearly a quarter of the companies complained that they were unable or could not afford to bring in outside expertise to fine-tune their performance (24%). Only 3% believed that the change was down to fluctuating market conditions in their sector, resulting in less demand for their product or service.

The complexity of setting up account options was mentioned (22%), but a majority of unhappy respondents (52%) said the biggest practical hurdle for them was the `complicated’ keyword bidding process. 26% said that balancing the need for outside expertise and consultancy with the corresponding cost and impact on ROI was causing problems for them.

Businesses’ continued use of pay-per click advertising shows that they have benefited and still find it a valuable tool, but they find it an unpredictable and complex undertaking, as this study has found,” said Mathijs van Abbe, CEO, Toading.

“Keyword bidding in particular crops up as a frustration for advertisers. This is a sign that, as markets become more crowded, advertisers need to be more precise about their offerings, including pricing information. Not only is this helpful for potential customers, but it can dramatically improve conversion rates, and doesn’t have to be the complicated process many fear it to be.”

Google CEO bullish on mobile Web advertising

DAVOS, Switzerland (Reuters) - The arrival of a truly mobile Web, offering a new generation of location-based advertising, is set to unleash a "huge revolution", Google Inc Chief Executive Eric Schmidt said on Friday.

"It's the recreation of the Internet, it's the recreation of the PC (personal computer) story and it is before us -- and it is very likely it will happen in the next year," he told a panel at the World Economic Forum.

Current estimates for mobile advertising are cautious, with consultancy Forrester predicting revenues of under $1 billion by 2012.

But Schmidt said this figure was too low and failed to take into account the fact the mobile Web was reaching a tipping point.

Google aims to be a prime mover by bidding for coveted airwaves to launch an open U.S. wireless network, pitting it against established telecommunications players. The move will take the Silicon Valley-based company well beyond its core Web search and online advertising franchises.

Some analysts are worried at the high costs involved but Schmidt said he was confident location-based advertising -- which could, for example, direct hungry travellers to nearby restaurants -- would be "a very, very good business".

Content providers, already struggling in the modern world of music and film downloads, are less convinced that mobile Internet is a minefield.

"It is not going to be easy to hang on the price of content," said Howard Stringer, chief executive of Sony Corp.

Study: Mobile Media Users More Receptive to Ads

Mobile media users are more receptive to advertising and more willing to use their mobile devices for commerce than conventional wisdom would hold, finds a new study released by Starcom USA.

Regarding mobile advertising, Starcom’s study found that among light and heavy mobile media users, consumers are OK with advertising as long as it carries some relevance. That is due to the personal nature of mobile devices, says Starcom, which found that most participants in its study (conducted among users in Chicago, Houston, New York and San Francisco) are willing to share personal information with marketers in exchange for targeted, relevant ads. That flies in the face of some industry thinking, as advertisers are often wary of consumers’ crossing personal boundaries in mobile.

Similarly, with mobile commerce, Starcom found that the issue holding back consumers from buying things with their mobile devices isn’t privacy concerns, but rather frustration with the mobile shopping experience. However, just 5 percent of respondents cited shopping as something they’d like access to on their mobile phones.

Overall, the new study is aimed at dispelling a variety of mobile myths, said Starcom officials. The research identifies ten key insights for the nascent medium, which Starcom says has created a new daypart – a 24/7 media time period.

“Mobile’s capabilities are changing consumer expectations and therefore will have broader implications on how marketers approach all forms of communication moving forward,” said Angela Steele, Starcom vp/activation director, who led the research study. “These insights blow the doors wide open for new meaningful content, formats and opportunities for ad placement in campaigns.”

However, it’s worth mentioning that usage of mobile devices for functions other than phone calls or text messages remains in its infancy. Indeed, Starcom’s research is limited to consumers from urban regions who identify themselves as mobile media users. According to a November report from Nielsen, just 16 percent of the total U.S. mobile audience, or 33.7 million users, accessed the Internet at all using a mobile device.