Go Ahead and Flush

In my post on the Microsoft acquisition of Yahoo, I mentioned that one of the areas where I thought Google was vulnerable to attack was the Content Network program (AdSense). Like most content network programs, there is a lack of transparency about what you’re buying and a misplaced reliance on content matching technology that often leads to very poor program results.

That’s partly why I was interested in the recent Click Forensics study that showed extremely high rates of click fraud on content networks.

Here’s a link to an article describing the study on MediaPost – and I’ve excerpted the key passage for this discussion here:

“The average click fraud rate of PPC advertisements appearing on search engine content networks, including Google AdSense and the Yahoo Publisher Network, was 28.3% in the fourth quarter. That's up from the 19.2% average click fraud rate for the same quarter in 2006, and 28.1 percent for third-quarter 2007.”

That is an astonishing number. Hardly believable. Probably not even true.

The content networks generally admit to a much, much lower level of click-fraud. And, of course, Click Forensics has almost as much of an incentive to overstate fraud as the networks do to understate it.

I’ve read posts by Google and posts by Click Forensics, and all I can say is that neither make a whole lot of sense to me. I’m just not in a position to judge the reasonable accuracy of these competing claims.

I can say this. I don’t think any significant brand should ever spend advertising money without knowing where that advertising is going to appear. I can’t think of another channel where the sort of large and highly-sensitive brands that we typically work with would even contemplate such a thing.

That’s why I’ve always wished that advertisers bought in content networks using an exchange model – where reputable publishers (sellers) are matched with reputable buyers and the exchange takes a small cut on every transaction. I think it’s better to have transparency around placement and to select appropriate sites than to get whatever minimal boost in relevancy that content-matching technology actually provides.

I also know that our experience analyzing campaigns on content networks had pretty much convinced us some time ago that they were usually a poor investment for clients. We tried valiantly to exclude bad and underperforming sites, but new bad and underperforming sites always managed to find their way right back into our buy. In the end, we pretty much gave up. No amount of good analysis can compensate for a bad system. It turns out to be a lot easier to find the few sites that generally drove what good traffic there was and have our clients buy sponsorships directly from them.

This underscores a critical point - even where a content campaign appears to work, it's often the case that a few good sites are responsible for nearly all the good clicks. Why not just buy inventory on those sites directly?

That doesn’t mean that levels of fraud are anything like what Click Forensics claims. It may just mean that the system itself is over-bought, doesn’t work all that well, and forces you to buy against lots of dumb money overspending for clicks. That isn’t quite fraud but from the buyers perspective, it might as well be.

Most of the very sophisticated buyers I talk to don’t buy on the content networks at all. And yet, the total dollars spent on content networks continues to grow. Which makes me wonder: who is spending all that money?

I don’t really know, but I have two theories.

First, I think a fair amount of content network buying is from unsophisticated small buyers. As a small buyer, you don’t always have a great deal of choice. Sponsorship of a significant site is unaffordable. Search on niche terms often provides access to very limited traffic. Banners are harder to buy and take more creative effort. So content networks may provide the only reasonable avenue for scaling a small, niche online buy.

It’s my guess that another fair amount – and maybe the bulk – comes from program buyers anxious to spend every dollar they can. Let’s face it, even with the “long-tail” you can only buy so many search terms that will produce any clicks. It often surprises companies how small the click numbers are on even seemingly logical terms. But no such problems exist with content networks. Content networks are a vast sponge that can absorb almost any budget – no matter how large.

I can’t tell you that ¼ of all your content clicks are fraud. I don’t really believe it. But I do believe that managing a content network program takes lots of special care if you are going to do it at all. So if you are a significant investor in PPC and don’t manage your campaigns, here are a few pieces of advice.

• Find out what percentage of your buy goes into content networks.
• Find out how that buy compares in terms of performance to your search buy.
• Make sure than any content network buys are measured only against absolutely real conversions (purchases and valid lead forms) – not against traffic or even conversion proxies.
• Use your web analytics tool to find out where your content network ads are appearing and measure their effectiveness by site.
• Make your buyer eliminate continually the sites that you don’t want your brand on.

If you’ve ever gambled at all seriously, you realize that one of the most important facts to know about any game of chance is the percent the house takes off the top. The larger that percentage, the harder it is to make money. In Las Vegas, casinos typically field games where the house takes a cut ranging from less than a percentage point to as much as 5-7%. We all know how well that works out for them.

Because of the total lack of transparency in content network advertising, nobody knows what the house percentage actually is (Google, Yahoo and whatever click-cheats there are constitute the house). For the most part, you don’t actually need to know the house percentage. You just need to make sure you aren’t one of the suckers spending all that money without making sure it actually works for you!

So here’s my best advice if you’re truly tempted to use the content networks in Search Marketing. Don’t do it at all unless you are an expert buyer. And if you aren’t going to take the time to measure the results with all due care, then you should just take that money and spend a weekend in Vegas instead. You’ll have a better chance of getting a return on your investment and you’ll have a hell of lot more fun.

Comments

[Jim Novo]

Gary, agree completely with the take on Content Networks. We've failed for 5 years or so to make them work for the Lab Store, though just recently, we cracked the code on AdSense:

http://blog.jimnovo.com/2008/03/05/adsense-works/

Basically, improved control over ad distribution and a new pricing model made it work. In other words, the more ad networks mimic the PPC model the better off they will be in the long run.

This also probably means the size of the network will shrink tremendously over time as buyers turn off sites with high fraud rates and poor traffic quality. I imagine these sites will abandon networks that provide good user control for other ad opportunities where the dumb buyer rules.

[Greg Moore]

How about a content campaign limited to bidding on your brand keyword(s)? Do you think it's a strategy that might be worth trying?

Signed,
Tempted to Try