Comments for Second Tier PPC Search Advertising - Growing, But Dogged by Click Fraud Concerns

Second Tier PPC Search Advertising - Growing, But Dogged by Click Fraud Concerns

2006-11-29T21:00:58Z

Searchfeed.com is one of a large group of so-called "second tier" PPC (Pay-Per-Click) search advertising networks - others include Kanoodle, InfoSeek, and Looksmart. SearchEngineWatch lists some more on this page (nb: it's 3 years old, but I couldn't find a more up-to-date list). The first tier services are Google AdWords and Overture - in which Google is a clear leader.

Searchfeed has just announced its latest Network search figures, which claim an increase in total searches from 2 billion per month in December 2005 to 6 billion searches per month in November 2006. The company noted (in an email I received) that this is in line with general online advertising trends:

"This increase mirrors overall 2006 industry growth as U.S. Internet advertising revenues reached a record $4.2 billion in the third quarter of 2006, representing a 35% increase over the $3.1 billion figure posted for the third quarter of 2005."

The growth path of Searchfeed - and other second tier search advertising networks - is to provide web publishers with co-branded search solutions. In other words, second tier search engines have to somehow convince web publishers NOT to use Google Adsense or Overture - or at least pick them to run ads alongside Google or Overture. At the same time second tier networks must entice advertisers on board with their Pay-Per-Click solutions (also known as CPC - Cost-Per-Click).

]]> However there is ongoing concern with click fraud in PPC advertising. As the website Search Engine Roundtable reported back in June, click fraud is an issue that particularly dogs the second tier players:

"There is a thread on SEW Forums about click fraud and second tier PPC companies that has been going on for well over a year now. The creator of the thread, posts some data in regards to the companies whose traffic is rampant with click fraud. The rest of the thread follows with people giving input on the data and their own experience. The result: People hate second tier search engines. They simply don't trust them to not fraud them out of their money."
[ref the forum thread]

It also is a question that Google and Yahoo/Overture find themselves addressing on a regular basis - how can advertisers be sure click fraud isn't corrupting their PPC results? Both big companies have specialist teams that tackle click fraud and they generally make all the right noises in public to assuage concern about click fraud.

But stories continue to emerge about click fraud - and the second tier networks are particularly vulnerable, as it is such a competitive market. It's likely that a few bad second tier apples are engaging in click fraud in order to get ahead, which of course reflects badly on the others and PPC as a whole.

I guess the true question here is: when will we see some innovative CPM or CPA search advertising networks? That would be the best way to move beyond PPC click fraud. At the Web 2.0 Summit we saw an interesting company doing CPA called Turn, which looks promising. What other networks do you see tackling CPA and/or CPM solutions, that might be worth R/WW looking into?

Comment from Tim Bromhead on 2006-11-29

2006-11-30T01:52:25Z

We need new ways of connecting advertisers to consumers, that don't involve forcing advertising onto people.

With ad blockers and spam filters are becoming more popular, and less people watching television there must be a large group of users that hardly see any advertising from one end of the day to the other. Advertisers are getting stealthier, but users are getting more savvy.

We already have non-intrusive advertising in the form of directory systems, for example the yellow pages. Users *choose* to find companies and services they need. Most directories are local which is good sometimes, but sometimes there's no reason not to look internationally eg. web hosting. Most are text based which means a lot of reading, and they are mostly long term businesses, not short term ads.

We've made a possible solution, a graphical directory called bla.st:
http://bla.st/
The goal is to make a site people choose to go to to find promotions, competitions, events, sales, companies and websites. Ads can be long or short term, and can be placed into any categories. It's organised by country, so you can find local and international items.

Comment from Tim Bromhead on 2006-11-29

2006-11-30T02:32:30Z

I forgot to mention how bla.st charges for ads - the crucial bit for this article. Instead of paying per click, we let the advertisers pay any amount they want per day (including nothing!), a bit like an auction. The highest paying are at the top of the front page and of their chosen categories. It doesn't matter how many clicks or impressions your ad gets, you only pay what you choose to.

The advantages include:
- no click fraud, and no cost surprises.
- The advertisers decide the value of advertising on the site.
- The system allows the site to scale, initially there's not huge traffic, so the cost of advertising on the front page is minimal.
- your one payment applies across many countries and categories
- anyone can advertise for free, making it good for non-profits, or individuals
- advertisers in unpopular categories might not need to pay anything to be on the first page of results
- although the site is free, it still earns money to support itself

I guess one disadvantage with such a system is it's difficult to predict how much revenue will be generated.

Comment from Abhishek Sharma on 2006-11-29

2006-11-30T06:15:59Z

Hello Tim,
I liked your service and will be using it for my startup which is scheduled to launch in Jan 2007. Thank you.

Comment from Jonathan Karpfen on 2006-11-30

2006-11-30T16:11:01Z

Tim,

I love the idea of a place people can go when they explicitly want to find promos, deals, etc. Good work!

That said, I couldn't agree less with the observation that "there must be a large group of users that hardly see any advertising from one end of the day to the other." You gotta be kidding! I can't think of a single class of user that DOESN'T see oodles of advertising on a daily basis. Where ISN'T there some form of advertising on the web, in the streets, and even on our household products?

Advertising is unique in its ubiquity.

Again, though, that doesn't mean that the key to advertising is having the RIGHT KIND for this right person at the right time. And there is no better way to do that than to cater, as you do, to people who are actively LOOKING for ads.

Comment from Daniel on 2006-11-30

2006-11-30T22:21:46Z

I tried Searchfeed but this is far cry from Adsense, click rates for publisher are very low 1 - 3 cents per click for very competitive keywords. Adsense pays for the same keywords at least $0.1 - $1.0 per click - no comparison. Other networks
have strict requirements for Alexa Rank, Google rank, min 500,000 page impressions per mnth and God knows what else. Adsense works for you the very next day after signing up account. I'd like to diversify my Google Adsense revenues but I still don't see anything even close to it.

Comment from David Mackey on 2006-11-30

2006-12-01T04:28:37Z

I'd advertise on second tier sites, but I think they have to have substantial holdings of their own, as I wouldn't add their ads to my site.

Comment from Torq on 2006-12-02

2006-12-03T04:00:05Z

I work for an ad network that sells a lot of 1 penny per click cpc and targeted popunders. There are several sources I refuse to use because of rampant click fraud. I use Miva as (one of our sources) almost exclusively now and have had some good success however discrepencies are still as high as 20 percent. Ive been in the ad serving business a long time and nothing is more frustrating then starting a promising new campaign for a client only to be derailed by click fraud. Has anyone experienced good or bad results with Miva and what were the results (page views, CTR, etc)?