Pay-Per-Action Ads may open up Google to being a victim of fraud
I was just reading Barry Schwartz’s report that Google is opting-in some AdSense publishers into Pay Per Action (CPA) ads. He poses the question of why would Google push these ads on the publishers who haven’t asked for it? The immediate answer I come up with is that this could actually be a test to try to detect fraud, since CPA is thought to be less prone to exploit. After all, the publisher would only get paid for these ads if someone buys - not just clicks on the ads on their sites. Perhaps the publishers that are getting opted-in are ones for which Google has had some question about the quality of click-through in their regular PPC ads.
I’ve been thinking that an unpublished problem with Google’s pay-per-action product is that Google itself is likely to become more a victim of fraud with these types of ads. Read on and I’ll describe…
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Posted by Chris Silver Smith of Netconcepts on 07/26/2007 | Permalink | 
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Filed under: Advertising, Google, Paid Search, Tricks, Worst Practicesclick-fraud, Cost-Per-Action, CPA, Google-AdSense, Pay-Per-Action
Click Fraud Costs Estimated at over $800M
In Report: Advertisers Cut Spending, Blame Google and Yahoo for Click Fraud, a new report states that advertisers wasted over $800 million last year on phony clicks.
Some points of interest:
- “The Internet advertising market is expected to be worth about $15.6 billion in 2006, up from about $10 billion in 2005.”
- “Google is expected to capture about 25% of that market, compared to Yahoo’s expected 20%, according to research firm eMarketer.”
- PPC therefore is valued at around $7-8 billion this year.
- “15% is estimated as fraudulent”
- “37% of advertisers are reducing their PPC activity”
I predict that this fraud perception will fuel advertisers increasing reliance on natural search, where click fraud is not incentivized.
Will click fraud be the catalyst that finally causes retailers to more equally allocate their spending between PPC (pay per click) and NSO (natural search optimization)? So, for example, shift from $1MM/yr PPC and $150k on NSO, to more like $1MM/yr PPC and $1MM/yr NSO?
As PPC gets more expensive, the act of click fraud gets more costly, and that bad apple must begin to spoil the bucket at some point - not completely I’m sure, but probably enough to cause advertisers to rethink allocation and importance of NSO.
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Posted by Stephan Spencer of Netconcepts on 07/10/2006 | Permalink | Email
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Filed under: Paid Searchclick-fraud, Paid Search, ppc
Plenty of Traffic
Plentyoffish.com was recently reported to have over $300k in AdSense revenue per month, according to an exclusive interview with the creator, Markus Frind.
In a forum on WebmasterWorld, one thing Markus Frind suggested for those wishing to be successful as AdSense publishers really stood out for me:
“Do not enter markets with a lot of competition monitized via adsense. Try and undercut paid content markets by offering a free service, or better yet create your own market.”
So, there you have a great formula for success: choose an industry that charges fees for access to info/content, and offer it for free, paid by the contextual advertising.
Newspaper Industry: are you listening?
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Posted by Chris Silver Smith of Netconcepts on 04/09/2006 | Permalink | Email
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Filed under: Best Practices, GeneralAdSense, Google, Google-AdSense
