Update: See this threadwatch post for more grousing about price gouging.
It's a well-known phenomenon, at least among search engine optimizers and marketers, that Google is constantly making changes to its ad-serving algorithms in an attempt to combat fraud and to make their advertising system more efficient for their customers.
Now, I'm not an SEO, and I don't buy AdWords or advertise using AdSense. But I follow the news and, in the course of my work for Google Watch, I talk to a few SEOs. I'd like to share a conversation I had recently with an SEO who works for a major media company. He's responsible for optimizing several big name brands online, and he buys AdWords (both for his company and for his side projects) by the hundreds. We were speaking about the upcoming change to landing page quality score (QS) factors. In a nutshell, this is what he told me: "The landing page quality score doesn't actually exist. You don't need to improve the quality score of your landing page, you simply need to bid more. In order to line their pockets, Google has changed the algorithms before the holiday season so that bid price is way more important that clickthrough rate. After the holidays, quality score will be important again." I'm generally dubious of theories like this, which generally argue -- usually through ignorance and supposition -- that dark forces are working in tandem to screw the little guy. Like many of you who read this blog, I've met several Googlers, including Matt Cutts, and I genuinely believe they are honest people. And if you're familiar with this blog, you know I'm pretty even-handed when covering Google. But I was interested in this theory, because a) the SEO is responsible for several brand name media propoerties, and b) it went against everything I assumed about landing page QS. i.e., that it reduced made-for-adsense (MFA) pages and thus click fraud. So this SEO explained his theory to me in detail. I've reiterated it here and added some context. Please leave your thoughts below (and please, don't shoot the messenger): 1. Google realizes click fraud is a problem
The problem: bad actors clicking on a competitor's ads, costing the competitor money with each click and driving meaningless traffic to each Web site. The sites received a boatload of traffic from the ad placement, the spurious clicks, and the optimization on the site itself. Presto, Google SERPs are full of spam. It's a vicious cycle. 2. Google announces landing page QS
So in order to combat click fraud and improve their cost-per-action (CPA) business, Google created in December 2005 something they called a landing page quality score. (Landing pages are the pages a user lands on when they click an ad.) The landing page quality score (QS) is determined by a host of factors, including relevancy of the page's content to the ad and the utility of the content itself. Before the landing page algorithm was launched, Google used click through rate (CTR) as a way to determine not only how quality the ad was, but also how good the overall experience for the visitor was. But advertisers who provided a poor user experiences on the landing page (and the entire site) could also write a high quality ad -- or a misleading one -- to promote it, resulting in an ad with a high CTR but poor user experience. Oddly enough, you could also get a high CTR if someone was fraudently clicking your ads at a high enough rate without being detected. During the next fiscal quarter (Q1 2006), the average price of purchasing keywords decreased, but researchers said that was likely due to a decrease in ad spending after the holidays. Keyword prices remained stable throughout Q2, increasing less than 0.5% according to Performics. 3. Google announces another QS change, fraud on the wane?
Google made another QS change near the end of Q2. The immediate effect: Advertisers reported an increase in minimum bids for keywords. Google said that was to be expected for advertisers with low-quality landing pages, and that this affected a low number of advertisers. It was a canny rhetorical strategy -- Google was ostensibly making the change to combat click fraud, but maintaining the click fraud they were fighting wasn't that big a problem. UBS analysts said there was no way of knowing how many advertisers were affected, and recommended investors wait for Google's Q3 results. Google then reported stellar results. Revenue generated through AdSense publisher sites grew 54% year-over-year, and meanwhile Google had apparently removed much of the incentive for click fraud. 4. One more QS change, but this time makes bid price way more important
Today, with click fraud on the wane, or at least not increasing, Google is free to make another algorithm change. Publicly, they say that they're making more landing page QS changes. In reality, this is a chimera. The idea that there is a landing page QS is what keeps click fraudsters from clicking. The changeup forces marketers to invest more in paid search and not rely on organic as much. And what Google is really free to do now -- right before the holiday season -- is increase how important the bid price is relevant to CTR and landing page QS (if QS even exists). When click fraud was rampant Google wasn't free to increase the importance of bid price, since bid price and the incidence of fraud would rise at the same rate. But with click fraud on the wane because of the fear of landing page QS, SEOs who spend large amounts of money on keywords will see their ads gain top position on SERPs, almost regardless of the quality of their landing pages, and without a concomittant rise in fraud. 5. Bidding war starts just in time for the holiday season
Now Google has a bidding war on their hands. Going into the holiday season, they've priced out the low-end spammers who rely on made-for-adsense (MFA) sites by increasing the bid prices for keywords. But now SEOs, who have saved much of their budget to optmize for Christmas, will compete vigorously at a higher starting point for the same terms. Once the new year rolls around and advertiser spending drops precipitously, Google will change their algorithms again. And this time, they'll change it so bid price is less important relative to CTR, just like they did at the beginning of this year. 6. Google changes manage fraud, but also manipulate bid prices for profit
Some SEOs will tell you that in 2006, Google waited to change organic search algos until after December 2005, precisely to avoid manipulating the market. But those changes in PageRank in early 2006 created a kind of "clean slate" for SEOs to work with. That clean slate allowed MFA sites to grow throughout the year, thus providing more inventory for Google ads. Of course at the same time, cost-per-action results were dismal, and advertisers began opting out. So behind the scenes, Google started creating a "premium content network" filled with sites that provide better results for their content network. And of course they made the landing page announcement in June, weeding out the MFA sites again, and raising bid prices. 7. The bigger picture
That Google manipulates the market like this is largely hidden while broadband penetration and |
Comments (20)
As a Google engineer, I can vouch that landing page quality does exist and matters (and should matter) at Google. I'm not on the ads side, so I'll just stop by to mention that.
Posted by Matt Cutts | November 8, 2006 2:28 PM
If we put ourselves in Google's position landing page quality could be measured by several ways besides a spider visit for keyword density-existence. If I were a Google engineer I'd look at the percentage of times that the searcher returned from the ad link back to the SERP within ten seconds. The higher that percentage the worse the site's quality score in relation to the query. The formula would probably have to be slightly normalized to take into account position and its impact on the back-click percentage, but that factor could be calculated very easily.
Posted by Kevin Lee | November 8, 2006 5:09 PM
The notion that Google is optimizing for anyone’s performance other than Google’s is wrong...and why should they be? From my experience, QS does not benefit users and it does not benefit advertisers. Across multiple tests, for multiple clients, I have found that within an AdGroup, ads with the highest conversion rates are being displayed less than ads with the highest click-through, at times substantially less. What better measure of relevance for an ad is there than conversion?
Posted by Jonathan Mendez | November 9, 2006 9:54 AM
It seems obvious that the opportunity for such things to occur exists. We can only look at reports like this: http://www.seroundtable.com/archives/006590.html http://www.contentbiz.com/sample.cfm?ident=29768 Not to mention the actions of Google's rivals who are following in their footsteps. http://internet.seekingalpha.com/article/20242 Bottom line, advertisers are getting beat up. Why? Because they all but do not care. They simply work fraud into their cost of doing business. Many, not all, have firmly embraced click fraud. I posit that the critical mass has been achieved... so why not ride them a bit?
Posted by Jeff Molander | November 9, 2006 1:57 PM
First off, how do you figure that click fraud is waning? Click fraud is a big business, an example are some paid to read email groups click on ads, check out this article http://www.washingtonpost.com/wp-dyn/content/article/2006/10/21/AR2006102100936.html and this one about botnets and click fraud with the KMeth worm http://blog.spywareguide.com/2006/10/ie_used_to_launch_instant_mess.html If anything the problem is growing. I'm not one for conspiracy theories, but, Google has made many changes in the fourth quarter, why wait until the fourth quarter? When all of my money came from affiliate marketing, Google wacked my sites yearly, each time a month or two before Christmas, until it was about 1 tenth the size. Google wants all of the money advertisers spend, make no mistake about it, why allow me to send visitors to merchants when they can do it or get paid by someone like me to do it. This is big business, why do you think Google is expanding into print and radio ads? Why shouldn't Google make all the money from those markets as well? If you ask me, the newspapers and radio stations are letting the fox into the hen house.
Posted by Jimmy Daniels | November 9, 2006 3:15 PM
you say that "and meanwhile Google had apparently removed much of the incentive for click fraud." I think that is only true by half. While they may have made it more expensive for MFA sites to play the arbitrage game, Google have not removed any incentive to either run up your competitor's costs or to drive fraudulent traffic and ad clicks onto an MFA site.
Posted by Jamie | November 9, 2006 5:03 PM
Quality Score is almost entirely independent of conversion rate. This makes little sense. If an advertiser is getting a 10% conversion rate (high for AdWords), then obviously the site must be useful. Google has this information for many of their advertisers and chooses not to use it to boost or lower Quality Scores. Google and others have made various attempts at explaining why, but none have been very convincing. The lack of clear, detailed explanation tends to lead many people to question Google's motives.
Posted by JB | November 9, 2006 6:21 PM
The reason bids seem to outweigh Quality Score over christmas is purely because a lot of idiot advertisers and a lot of new advertisers throw caution to the wind and start bidding crazily just to get the maximum clicks via high positions over the biggest buying season. The quality score is a factor and still will be, but it can always be overridden and overshadowed by raising Maximum CPC ridiculously.
Posted by AccuraCast | November 10, 2006 8:04 AM
>As a Google engineer, I can vouch that landing page quality does exist and matters (and should matter) at Google. I'm not on the ads side, so I'll just stop by to mention that. I accept your assurances about the existence of page quality, but that hardly answers the question about Google changing the algorithms at every possible opportunity to maximize its profits incurring extra costs for advertisers. I don't question about whether it should or should not. I only pity the poor fools who would give into "free" Google products like Analytics, Checkout or Adsense and end up paying more than they would have without them. If I owned a site, I would never touch Googleware for my site and simultaneously pay bucks to bring people onto my site. But thats just me on a random unrelated line of thought on a lazy Friday evening.
Posted by Alok | November 10, 2006 6:30 PM
A much more realistic approach would be to simply enforce the policies that Google has in place. Apparently, the MFAs and other scammers are just too profitable. I've reported sites with iframed content to display just Adsense ads, sites with massive scraped copyrighted content, sites with hugely misleading Adwords ads, etc. and they are still there weeks and months later. Meanwhile my PR5 site that sells my own product has full privacy and contact info, plenty of content, and even (gasp) links to other relevant sites saw its bids go from .25 to $10 during the first "QS" update. I talked to my Google rep and finally got them to admit that they could see nothing really wrong with the site. I spent 15,000 per month promoting it. Here's the rub- when my site got knocked out of the top 3 it was replaced with 1. a MFA site! (yes, in first place) 2. an affiliate site 3. another "search portal" MFA site. So much for quality. Having tried everything to appease the Google gods I've been limping along on content only. 3 days ago BAM! all bids at $5-$10 now on content. I've always heard the phrase "make a dictator act like a dictator" in regards to government corruption. In this case I think we've made Google act like the black box monopoly they are which can only be good in the long run. Between bowing down to the Chinese government on censorship or gouging advertisers I feel the tide starting just to turn against Google. You can see it anywhere online they are mentioned. "Don't be Evil" should now be "Don't get caught".
Posted by Luke | November 11, 2006 7:00 AM
Google public position on this matter is unsustainable: they oblige advertisers to change their landing page content (even very successful ones in terms of Conversion Rate) without helping advertisers (even large ones) to be successful in their will to change. So what? Now people need to invest to comply to Google new QS but Google does not say if that investment makes sense? Google is using market power to kill smaller advertisers while allowing 10 affiliates results with ebay in their sponsored results..... Something is not working here GG.
Posted by Pascal Levy | November 12, 2006 8:58 AM
I think both the click fraud problem and the landing page quality problem are overblown. A small but vocal minority is making it seem like these are massive problems. However, there are steps Google can take to ameliorate the situation: 1) Include QS (Quality Score) in the AdWords interface. If it really does exist, report it at the keyword level, just like CTR. 2) Only let parked domains be on the content network (click on my name for more details). Then advertisers could block parked domain sites via the site exclusion tool. 3) Get rid of (or change) Starter Edition - forcing new advertisers to use content network is a bad idea 4) Don't make content network on by default in a new keyword-targeted campaign. Contextual advertising is NOT search engine advertising. Again, click fraud is not as big of a problem as is being reported in the media right now. Same with landing page quality issues. But, Google needs to clean up their act in a few areas or these perceptions will continue to grow.
Posted by Richard Ball | November 12, 2006 10:25 AM
re: alok - I genuinely find value in the Google tools and don't understand why I need to stay away. Is your point that we're giving google too much info about us? What is the specific fear. Greg PiedmontDesign.com
Posted by Greg | November 13, 2006 10:00 AM
I know that everytime algos get updated there are winners and losers but for what it's worth, I've noticed in the past 2 weeks substantial improvement in adsense results almost universally for clients and little change to keyword prices. I can't really explain it, but it's been 13 days in a row now for 4 unrelated client networks. I just figured it was as AccuraCast said above... silly people bidding crazy pre-christmas, expecting higher than typical conversions. But as I said, I'm receiving the same traffic as before for the same prices. Anyhow.. just my thoughts. Greg www.PiedmontDesign.com
Posted by Greg | November 13, 2006 10:04 AM
I know that everytime algos get updated there are winners and losers but for what it's worth, I've noticed in the past 2 weeks substantial improvement in adsense results almost universally for clients and little change to keyword prices. I can't really explain it, but it's been 13 days in a row now for 4 unrelated client networks. I just figured it was as AccuraCast said above... silly people bidding crazy pre-christmas, expecting higher than typical conversions. But as I said, I'm receiving the same traffic as before for the same prices. Anyhow.. just my thoughts. Greg PiedmontDesign.com
Posted by Greg | November 13, 2006 10:04 AM
For people with short memories, this wouldn't be the first time Google's screwed advertisers with changes to their AdWords system, supposedly for everyone's "benefit." In the summer of 2005 they tweaked their AdWords system to take into account regional factors. The change screwed all the ppc people up, even the real pros, because nobody knew it was coming and nobody knew how to deal with it. The only thing these people knew is that it was costing them money AND reputations. I think people should realistically be aware that no corporation is a "good guy." As others have said before me, a corporation is out to please stockholders (they have to), and Google is especially cute about it, because they'll have you believe that them screwing you is actually a GOOD thing, i.e., it's not really what you think it is -- trust Google -- we're doing this for your benefit. Yeah right!
Posted by Mike | November 14, 2006 8:42 AM
If you search the term "appliance parts" on Google you'll see an Adwords ad for the URL "onlyapplianceparts.com" If you click that ad you'll see a page of Yahoo Search Marketing ads. This page is completely irrelevant to the search term... unless you believe competitor's ads equal content. I've been fighting Google and Yahoo for months about this type of obvious and flagrant abuse of their so-called landing-page relevancy policy. Their answers are a lesson in double-talk. I believe Google follows the money first and enforces it's guidelines when convenient and profitable. Does Google play around with the algo to suit itself? you bet. Can you do anything about it? No. And they know it. Google is the purest form of monopoly and greed is its middle name.
Posted by Chris | November 14, 2006 8:42 AM
I must be missing something. I don't get how QS would do anything but increase click-fraud. Increasing the bid price for a keyword can only make click-fraud more effective.
Posted by Bob Badour | November 14, 2006 10:11 AM
As a publisher who runs Google Ads (but does not advertise through Google), the quality of the web sites that run ads on my pages has become a major concern. When I click on these ads (Legitimately, using the Google tool) I am generally disappointed by what I find there and I have had to increasingly make use of my Ad filter to cut out the questionable advertisers whose junk ads would take unfair advantage of my visitors and decrease their opinion of my site in the process. This is difficult for me because it cuts the amount of revenue I make from Google (My pay per click seems to go down with every advertiser I cut out). Frankly, the number of scam artists and crooks using Adsense seems to outnumber the legitimate advertisers, and because of that I am growing more and more unhappy with the service. At this point the ads in the back of the National Enquirer are starting to outpace Adsense when it comes to legitimacy. For that reason I am VERY happy to see Google implementing this program and I have little sympathy for the sites that Google is forcing to pay more money. I highly doubt that legitimate advertisers with quality products and straightforward ads/sites are going to be victimized by this. It is generally pretty easy to spot the bad apples and I would rather have Google weed them out then be forced to do it myself.
Posted by John Hewitt | November 14, 2006 1:34 PM
I reserved comment until I had six weeks to observe the situation. I am a publisher and I buy Adwords. Most disturbing as we get into December is the positioning in Google's open search. We received 90 percent of our traffic from Google. Now Yahoo, Windows Live, and MSN send more open search traffic.
Search engine saturation tests and seo testing tells us there is room for improvement but not by a big enough factor to account for recent changes. When I asked Google to check one of my sites they said the CTR was down but positioning, coding, RTC and other relative factors looked normal and showed no problems.
I decided to ask the Adwords staff. Adwords can pass the problem to Adsense, and Adsense can pass the problem back to Adwords, without answers or resolution. However, with one quick change of my code I can switch from Google Adsense to Yahoo Publisher. Yahoo cannot provide the revenue stream that Google does.
Revenue and monetization is irrelevant if the traffic does not flow. Google, in my opinion, adjusted more than they admit. If any Adwords publisher can turn off Adwords, thereby seeing only a small decrease in traffic and revenue, Google knows pushing open search results to the bottom of the food chain might result in more advertiser spending.
On the opposite side of the coin Google does not know when we drive ten times our normal traffic to our site through programs similar to Adwords. We've done so, and Google Adsense did not show a relative increase in revenue. Poor ads, low paying ads, or does Google take a bigger percentage? What ever the answer, Google is clearly offending the little guy at a bad time of year. But they are also tossing $100,000 advertisers out of their program.
Greed finally got the best of Google at a time when we are trying to do our budgets for next year.
Posted by T. Blake | December 9, 2006 4:21 PM