July 9th, 2006

The Corruption of AdSense

by

Perhaps the greatest testament to AdSense’s success, and the greatest irony as well, is the degree to which AdSense has been corrupted by gaming of the system, abuse, and outright fraud.

Google CEO Eric Schmidt thinks that market forces will correct the problem of click fraud (via Donna Bogatin):

Eventually, the price that the advertiser is willing to pay for the conversion will decline, because the advertiser will realize that these are bad clicks, in other words, the value of the ad declines, so over some amount of time, the system is in-fact, self-correcting. In fact, there is a perfect economic solution which is to let it happen.

In theory, he’s right, but theory may not be the issue. The market-driven solution will only work if advertisers are willing to play along, and as I’ve pointed before, they may not be.

To get a sense (no pun) for how much AdSense has become an end unto itself, from gaming to outright fraud, all you need to do is Google “AdSense” and check out the ads — a cottage industry of “get rich quick” schemes has grown up around AdSense.

Google AdSense

AdSense Wealth Empire


AdSense Ready


AdSense Sites For Sale

This sale of ad-ready content sites is part of what’s killing the economics of content.

Then of course there are “subtle” ploys like “BotCandy”:

BotCandy

(Incidentally, all of these screenshots are linked through the AdWords links so that these sites will pay for the privilege if you want to check them out.)

Beyond those actually pertutrating fraud (and the definition is debatable), I can’t fault all of these AdSense schemers. They saw an opportunity and they seized it.

The critical question is how do AdWords advertisers feel about being part of these get rich quick schemes?

According to the AdSense blog, Google is trying to crackdown on sites with “low quality user experience” (via JenSense):

From time-to-time, we improve our algorithms for evaluating landing page quality (often based on feedback from our end-users), and next week we’re launching another such improvement. Thus, over the coming days a small number of advertisers who are providing a low quality user experience on their landing pages will see increases in their minimum bids. It is important to note, however, that the vast majority of advertisers will not be affected at all by this change, as they link to quality landing pages.

It’s unclear whether Google intends with this initiative to take down the entire “AdSense Wealth Empire,” as it were.

The conventional wisdom, which Schmidt follows, is that none of this really matters because the numbers will work it all out.

And maybe they will.

Or, as Joshua Allen observes, “Until Google has credible competition, I don’t see how clickfraud does anything but help Google.”

Indeed.

UPDATE

A further debate on click fraud has erupted, with a number of theories being put forth on why the corruption of AdSense, rather than being self-correcting, may in fact be caught in a vicious cycle:

Mark Cuban:

if a site is selling advertising and needs to hit a critical mass of traffic to their site just to be able to sell advertising, they arent going to care how they get it. As long as the CPC is reasonable versus their traffic needs. clickfraud actually does them a favor. They buy cheap keywords in huge quantities. At a nickel a click, if they are selling CPM based advertising, its obvious what they have to sell their advertising for to get their moneys worth.

And doesnt Google now sell CPM based advertising ? So is it possible a click through from a Google ad to a site selling CPM based advertising from Google could be clickfraud that pays Google twice.

Remember this. The worst bad guys are the smartest bad guys. They use the strength of the CPC system against the advertisers , where they are least susceptible to be discovered. clickfraud is real. its not going away. Its making CPC sellers a lot of money. How much, i dont know.

What i do know is that its not a self correcting problem

Eric Schonfeld:

In other words, there are many reasons why a business’ ROI on its Google ads might go down, and clickfraud is just one of them. So if a business were to attribute its reduced ROI to increased competition for a particular term as opposed to an increase in clickfraud, it might actually make economic sense to bid up that term even more. That would put more money in the click fraudtse’s’ pocket. Rather than be self-correcting, in such a scenario, click fraud would actually be self-perpetuatiing.

Comments (13 Responses so far)

  1. Shared by: don l on 7/9/2006 at 7:21 PM – DetailsPublishing 2.0 » The Corruption of AdSense

  2. of an $11 repair against the cost of paying off potential law suits. Regardless of how inefficient other mediums of advertising are, “we are right, you are wrong” economic efficiency talk does nothing good for the ecology of the net. Scot Karp,Publishing 2.0: In theory, he’s right, but theory may not be the issue. The market-driven solution will only work if advertisers are willing to play along, and…they may not be. To get a sense (no pun) for how much AdSense has become an end unto itself, from

  3. s Searchblog: Adsense Update: Fred, $500, and Is Google I’m sure we’ll see some changes to Google’s TOS for AdSense publishing once Yahoo! release their contextual advertising, which looks like we’ll see it released sooner rather than later. Publishing 2.0 The Corruption of AdSense Perhaps the greatest testament to AdSense s success, and the greatest irony as well, is the degree to which AdSense has been corrupted by gaming of the system, abuse, and outright fraud. Has Yahoo Publishing Network Led To Higher Adsense Click Values

  4. revenues could drop if there is too much click fraud going on or if Google is hampered by expensive click fraud lawsuits. Other bloggers think AdSense will continue to perform well. For some recent discussion of AdSense and click fraud see posts here, here, here and here. Speaking of PayPerPost.com, someone has a blog (via Blog Herald) that is all paid posts from PayPerPost.com. This blogger loves beach wedding invitations and whatever else is offered on PayPerPost.com.

  5. not so great as the basis for a media economy. Less control = less profit. I’m intrigued by Andy’s suggestion that Google may lose control of its “simulated pipe” and thereby lose control of its profits. Already, Google can’t control the exploitation of its “pipe.” Why did Google buy YouTube? Because they have to own it to control it, and they need to control it in order to monetize it. But on YouTube and other user-driven content platforms, the users control the network

  6. “a small number of advertisers who are providing a low quality user experience on their landing pages will see increases in their minimum bids”

    Doesn’t that just mean that Google stands to make more profit out of others’ dubious profits?Now if they were to put that increased revenue into a holding fund to pay off all those suffering ‘click fraud’…

  7. Scott, you should read this guys take, he’s somewhat of a clickfraud expert. The real deal: http://www.threadwatch.org/node/616#comment-1685

  8. Note that this whole ‘industry’ only works because Google (and the other engines) do such a poor job in their organic rankings that schlock and fake sites gain traffic from organic listings. The pressure this should create is on the other side of the Google house – we need better search results.

  9. Always the same old story. While technologies and trends may change, we will keep having the same problems. Adsense is no different.

  10. [...] I’ve been critical of AdSense of late, but let’s give credit where credit is due — AdSense, i.e. a distributed, shared-revenue advertising platform, represents the new paradigm for monetizing content. That’s why I remain skeptical that MySpace, despite being the current center of gravity for social media and despite its current off-the-charts traffic growth, will necessarily be a boon for News Corp. [...]

  11. [...] of its main strategic challenges. Scott Karp – October 4th, 2006 | Email | Print | Link | Del.icio.us Bookmark | Submit to Digg Categories: Google, Monetize, Media Economics, Content,AdSense [...]

  12. I rely (a little too heavily) on Adsense income, actually. These GRQ
    adsense schemes are bound to corrupt Adsense to the point that
    Google takes action, in my opinion. Not sure what will be the turning
    point, but it will happen.

    (Google actually contacted me this week to get me to make the adsense
    ads. more obvious. But it’s not my sites that are the real problem.)

    This is a shame. But web publishers will survive, or they will just go get
    a ‘proper job’.

    Steve

    PS Are you not actually almost encouraging people to click the Adsense
    ads you’ve got displayed on this page. That sort of thing is against the rules,
    aint it?

  13. I always wondered if Google actually gets their click fraud reports audited….since it’s so highly secretive & all that.

    However back on the topic, with any PPC type of system you’re always going to get people who cheat & find ways to abuse it, given the chance. However now Adsense are punishing publishers who send poor quality traffic by smart pricing them.

    Stuart
    Earners Blog

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