I've been watching search engines and ranking web pages in
them since 1993. That's just about the beginning of search engines I would
think. Over time the demands of searchers has changed. They want the most
accurate, relevant and quickly processed search results possible. Failure to
deliver these to the end user meant the difference between surviving all the
often brutal search engine wars or retiring to the search engine crematorium
with the rest of the other 40 or 50 major search engines that have come and
gone in my day.
My beef today is about monetizing web pages to generate
advertising revenue to the publisher of that web page. I wonder who is making
all this unearned revenue coming from click frauding. Where does this money go?
Which Internet marketers are generating the revenues? Where do they come from?
Well, these questions are “top secret”, which is ironic in a way as the
corporate motto is “Do no evil” and in fact they probably are.
A bit of history. One day, Looksmart come into the scene. What they did was to
get web site owners and marketers to bid for ranking positions. The results from
these searches was shared across other major search engines in the form of
"sponsored sites". Young starters like Google jumped on the Looksmart
wagon and started offering the results at the top of the search engine results
pages. Looksmart was eventually discontinued by Google and eaten up by Yahoo. Google
developed their own advertising system; Adwords they coined it. Paid
advertising was instantly profitable to the search engines. By this time search
engines were becoming public so profit margin became the only real priority.
User experience was a close second but the effects of paid advertising on
humankind were factors they never seriously considered.
Google really envisioned the power of the hyperlink. They
likes links so they came up with a great ploy to get folks creating links like
mad. They invented something they named Google Pagerank and the idea was that a
web page that had many many links pointing to it was of more value than one
rarely linked. They deployed a 1-10 scale for this. Misconceptions abounded.
Pagerank started new industries including link building and link brokering
which to this day is still a prevailing lunacies in some circles. It was
thought for a while that search engine optimization revolved around link
building.
Then one day in 2003 out popped Adsense. Internet marketers globally went nuts
monetizing their pages. In some economies, this was the West’s greatest gift to
them as far as technologies were concerned. You didn’t need to be a genius or
even geekish to profit from online advertisement revenues. You simply placed
ads all over your page and get people to click them. Do you think the world
exploited this? Back in the Adsense hayday Google acknowledge that there was a
bit of click fraud happening but it amounted to less than 1% of all clicks, so
they claimed. Now they set the tone like this
“On average, invalid clicks
account for less than 10% of all clicks on AdWords ads.” This could be
comfort for some but let’s look at the numbers.
“For
ads carried on non-Google sites (the Google Display Network), the revenue was
$3.4 billion. Traffic acquisition costs (the amount paid to the sites
themselves) was $2.39 billion. So roughly 70 percent of the revenue from the
display network is going to the publishers, on the whole.” So if I
calculate this correctly according to Google’s claim, click fraud earns
publishers more than 300 million dollars a year. This is conservative as
independent studies place click-fraud rates between 35% and 70%.
In closely examining the revenue generating and sharing mechanisms that today's
search corporations engage reveals that the wild wild west phase of this
industry is still at hand. These money moving machines need to be regulated.
