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    How Soon Till Google Dismantles Adwords??


    Hi there

    I woke up on the right side of bed today and after thinking several days about this I think it's time for another Prediction..

    Google has not done much nor spoke much on combating pay per click fraud...

    I see Sergei and Brin with the help of some sly financial experts setting themselves up to move into the trillions of dollars in revenues by working on the old "emotional" marketing aspect that many use to grab buyers attention.

    They sit quiet about pay per click fraud for two reasons:

    1. Pay per click fraud does not effect their bottom line directly..

    Pay per click fraud ...hurts the advertiser (you and other webmasters who pay to advertise through Google Adwords) the publisher does not suffer any financial loss unless:

    The advertiser spots the fraud and approaches Google about the suspicions... Google being the NON CUSTOMER SERVICE company they are...then mails a nice letter to make you feel rosy.

    Follow up needs to be pushed !!! Google may never mail back a response.

    Googles hope is this, if 5 advertisers each spend $20.00 a month in pay per click they debit the credit cards and grab their $100.00 in revenue, this revenue is then stuffed into a high yield account and earns interest.

    Now lets say that each of those 5 advertisers had pay per click fraud of 50% that's $10.00 of the $20.00 the advertiser spent that should have not been charged to the advertiser but is due to Google Terms of Service.

    One of the advertisers complains to Google he wants his $10.00 back,, he pesters Google till he gets his refund.

    Now the other 4 advertisers aren't paying attention and say nothing,. Google should automatically refund each of them $10.00 thereby bringing their revenue to $50.00 or sustaining a 50% loss.

    $100.00 - $50.00 = 50% loss

    Now keeping that $40.00 in unreturned funds and calculating it into profits

    $40.00 divided by the $50.00 they should only have been paid equals an 80% increase in revenues.

    Would you be in a hurry to return 80% of one of your revenue streams???

    I won't even talk about the interest earned on this...

    Hopefully most of you answered truthfully and now see why the boys are so hesitant to admit to complicity in the PPC fraud.

    Reason # 2

    Market research and web analytics as well as cookie tracking has shown that the ads that are not clicked, doe indeed earn a benefit from both branding, and sakes as people will buy from sites that are advertised in Adwords but not clicked on at the moment. Many will direct type in the URL if its easy enough to remember when they have more time, or they maybe at work and want to surf the site at home, so they copy and paste the link into an e-mail and send to their personal e-mail address.

    Most traditional advertising is based on how many eyes can see the ads that are placed, and not by what actions those ads resulted in.

    It would be hard for a newspaper to tell how many people saw an ad and went to the store to purchase the product.

    So advertisers willingly forked over insane amounts of money for best guess advertising and still do /.....Superbowl anyone??

    Google has now introduced cost per impression advertising (amount of possible eyeballs based) to advertisers through its online properties.

    Soon there will be direct marketing to search marketing agencies and traditional advertising agencies to push this product for their clients.

    Google will then turn the fear and anxiety spin to full blast offering CPM as a remedy to click fraud and after the revenue stream starts to eclipse the Adwords revenue........

    Bye Bye Pay Per Click!!

    Damn if only I was so smart...

    Clint Dixon

    Remember you heard it here first!!

    Comments on this post

    • WeRASkitzzo agrees : while I dont agree with you, this is definately a very interesting thread and thats what forums are all about. Well done!
    Last edited by SEO1; Jun 23rd, 2005 at 01:30 PM. Reason: just cause
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    CPC was offered because CPM just wasn't working. Remember, google adwords started with a CPM model. It made no sense for advertisers (below spot #1) to be charged/impression when buried at the bottom of the right hand side of the page (where no one ever looks). So it went CPC. Given all the click fraud, if google ever went back to CPM, you'd see more posts from people longing for CPC (and dealing with click fraud) than you'd get people happy with an impression based model.

    CPM sucks. It's the worst form of advertising. There is absolutely no incentive for publishers to put the ads in a good part of the page if all they have to do is drive traffic to the page not worry about getting a single click from it.

    Check online. All CPM ads are in the top middle of a page - who even looks there anymore? You --know-- its an advertisement, so its totally blocked from your field of vision, or ignored, either way. Makes sense for publishers (and banner networks) but not for advertisers.

    Comments on this post

    • WeRASkitzzo agrees : very good points
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  5. SEO Chat Good Citizen (1000 - 1499 posts)

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    Originally Posted by lorien1973
    CPC was offered because CPM just wasn't working. Remember, google adwords started with a CPM model. It made no sense for advertisers (below spot #1) to be charged/impression when buried at the bottom of the right hand side of the page (where no one ever looks). So it went CPC. Given all the click fraud, if google ever went back to CPM, you'd see more posts from people longing for CPC (and dealing with click fraud) than you'd get people happy with an impression based model.

    CPM sucks. It's the worst form of advertising. There is absolutely no incentive for publishers to put the ads in a good part of the page if all they have to do is drive traffic to the page not worry about getting a single click from it.

    Check online. All CPM ads are in the top middle of a page - who even looks there anymore? You --know-- its an advertisement, so its totally blocked from your field of vision, or ignored, either way. Makes sense for publishers (and banner networks) but not for advertisers.
    While I dont agree that Banners are totally ignored, I do agree that CPM would offer no incentive to webmasters to place the ads in any place that they will be noticed. The problem then would become how to figure out whether the traffic is real or simulated rather than click fraud. IMO click fraud is tougher to pull off than traffic fraud would be(not certain on this, my black hat skills arent very good) so I hope they stick with PPC.

    Comments on this post

    • SuccessGuru agrees : Also a good point
    I love SEO Chat.
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    Johan

    Can't say I remember Googles original model.

    However I can say that CPM is works in the real world, and especially for the publisher.

    I also think if you explore a bit more you will see some amazing results coming out of other pages than # 1 in CPC, I do quite well for a realtor whos's conversion to leads run around 50% from page 2 positions and 24% from page 1.

    That I feel is surfer education coming into play as research now shows users click right past page one and go to two, whether in natural or paid search as the results on page 2 are far more relevant then spam oriented page 1.

    I've also seen conversions all the way down to page 8.

    I'd also say I can somewhat read googles moves in advance of where they are headed.

    I wrote this article in Nov 2004 for the site we are currently on.

    http://www.seochat.com/c/a/Google-Optimization-Help/Links-Why-They-Are-Of-Little-Value-In-Helping-To-Achieve-Front-Page-Google-Results/

    This was 5 months before Googles Patent filing and which clearly states sites that buy links will suffer much the same results as link farms and swaps.

    From Google:

    [0077] The dates that links appear can also be used to detect "spam," where owners of documents or their colleagues create links to their own document for the purpose of boosting the score assigned by a search engine. A typical, "legitimate" document attracts back links slowly. A large spike in the quantity of back links may signal a topical phenomenon (e.g., the CDC web site may develop many links quickly after an outbreak, such as SARS), or signal attempts to spam a search engine (to obtain a higher ranking and, thus, better placement in search results) by exchanging links, purchasing links, or gaining links from documents without editorial discretion on making links. Examples of documents that give links without editorial discretion include guest books, referrer logs, and "free for all" pages that let anyone add a link to a document.

    I won't go in to the other areas I touched on such as historical analysis or websites needing traffic to get out of the imaginary Google sandbox....

    My peers have never given me credit for it originally and such pettiness is to be expected.

    Thank you for the rebuttal and thoughts. But I still see what I see! :twisted

    Clint
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    Adword? dismantle ?
    unlikely
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  11. Disregard Logic, Be Happy
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    Originally Posted by SEO1
    Most traditional advertising is based on how many eyes can see the ads that are placed, and not by what actions those ads resulted in.
    i'm not sure about your view of advertising, as it seems to suggest that advertising is its on entity with its own purpose. advertising works as a whole with the entire scope of the site, and should aim to not only maximize "how many eyes" see the ads, but also take into account targetting what chance of conversion the target set of eyes has instead of just pumping out ads. this may be a very simplistic way of describing a complex job.

    something can only be described simply (or dismantled simply) if it was constructed simply, which Google adwords was not. you're covering some very broad topics here, but seem to be on a legitimate track. however, some specifics in lieu of hypothetical situations would greatly help your case (and get your much desired peer respect).

    concerning your theory about purchased links potentially being devalued, i would venture a guess that probably 90% of the regulars here had already contemplated this long before (even more than 5 months ) the patent came out. keep in mind that if you are just now aligning theories with the google patent, you are basing your thinking on very old data. the patent is Google as it was some time ago, and dwelling on it amounts to being stuck in the past.

    not sure where adwords is going, but it won't be fast, simple or drastic in any case.
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    okguyjames

    My thoughts only related to Google and where they were headed not on the aspects of what if does for a website.

    some specifics in lieu of hypothetical situations would greatly help your case (and get your much desired peer respect).
    Had you read the article from last year and the resulting comments amazingly you'll find one just like the above that you posted...so I doubt many could see that far ahead and at the time the buying links issues was being hawked by almost every seo expert in the world...

    So that makes you question their ethics if they did see Googles patent coming and still duped their clients...

    As far as peer respect....shouldnt have to be asked for...won't kiss *** for it....find it better to get respect from my clients and future clients is much more important to my core values..

    Besides with peers like Jill (No Google Front Page Rankings) Whalen charging $250.00 and hour plus..I get more than enough coming my way ;-)

    This however is getting off topic was just a post to see what others saw.....

    Learnng from the past is what Google is doing with their new patent..why wouldnt I do the same???

    Learn from the past to make the future better...

    Peace
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    Dismantle AdWords? I guess when US capital moved from Washington to Miami. LOL. It is a very efficient model so why would you want to get rid of it?
    "The secret to creativity is knowing how to hide your sources." -- Albert Einstein
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    Ha! Nobody told me! Dismantle adwords? Have you done the trickle-down on that? So far as what I've read, that was a big part of what pushed them to the top and they just revamped it. With all due respect, are you sure your not still sleeping?
    Last edited by crxvfr; Jun 24th, 2005 at 02:06 PM.
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    Why get rid of it


    Why indeed

    PPC revenue is 1/3 of the revenue they could earn by charging advertisers for the whole audience and not just the motivated 30% who click.

    70% of thier viewers earn them no revenue. so by moving to CPM they then increase the amount of viewers who they can charge advertisers for by 200%

    Now lets see...radio stations do they charge advertising companies part of the audience that can hear thier ads..or for the whole audience who maybe able to hear their ads?

    Newspapers - they dont base rates on a 1/3 of their subscribers viewing their newspaper ads do they?? No, rates are based on subscriber and newstand sales figures.....the whole audience that can possibly read the ad.

    Superbowl - doesn't charge based on the amount of people who watch commericlas, they charge on how many can possibly see their commercials...

    Now lets look at the money squeeze and why ppc will soon go bye bye

    If Google moves to CPM it will cost X amount of dollars per month.

    It will also look at category much like newspapers charge different rates to advertise in different sections of the paper classifieds....

    So lets say the average business can afford just $100.00 per month to pay for clicks.

    Google takes this as their baseline for their smallest ad offering

    a 2 by 2 inch cpm will lets say cost $100.00 per month

    a 3by 3 inch cpm banner is $200.00 per month

    a skyscraper $1,200.00 per month

    Guess who will now be left out and which corporations and large business who already toss $1,000s a month for ads will be there??

    Then theres the whole viewable space issue that would come into play and instead of 8 PPC ads there will be perhaps space for 4 PPC ads....they will need space for CPM.

    The viewable space on the screen then becomes much like real estate and soon the lower generating revenuie stream is sold off or dismantled due to the popularity of CPM for large companies, or pushed back several pages where hardly anyone searches.

    Basic business common sense lower profit margins are on the back shelves while high profit margins are at the doors and checkouts, impulse racks...


    Since their offering the ability to target where your ads are seen, eventually by implementing CPM on their site and their affialite publishers they can charge more and pay more for CPM views, thereby enticing the publisher sites to free up space for CPM ads by Adsense cutting down on the space for Adsense

    It's only as hard as you make it ...other wise it's just good business sense...you know Business 101

    As a boinus they can't really play with the free results area too much as this was he basis for them to charge for advertising in the 1st place.

    I live near Wharton

    I didn't attend, though I did hit some good frat parties there years ago...

    but I think this falls under the term

    "common business sense"

    Clint

    Out & Done
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    Yes I am still sleeping


    crxvfr

    Yes I do actually do this in my sleep...


    too bad you were sleeping in business 101



    Clint
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    Those are some great arguments. I personally don't think it's gonna happen though.

    G-Man
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  25. Disregard Logic, Be Happy
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    Originally Posted by SEO1
    I live near Wharton

    I didn't attend, though I did hit some good frat parties there years ago...
    if you move to washington, will you consider yourself a politician?

    in any case, you've certainly convinced someone...you. good luck with the rest.
    Last edited by okguyjames; Jun 25th, 2005 at 02:33 AM.
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    Thumbs up


    Although I don't agree with everything mentioned, I think it made for a great thread and good read with alot of interesting points on the table....

    Time will tell, but I highly doubt CPC is going anywhere...
    -
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    Just that you can charge for more traffic if you use a CPM modell doesn't mean that you could charge more in totall and make more money that way.

    Selling more doesn't always mean that you make more money. Basic economic teory states that you should try to optimize not maximize your sales.
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