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Techcrunch just wrote an article about click fraud.

http://www.techcrunch.com/2009/01/27/report-click-fraud-at-record-high/

It says that click fraud is at an all time high, possibly due to the economy problems. I actually suspected this before the article came out.

Even on reduced bidding, we have lower sales and more clicks then before. How else could this be? Click fraud has always been one of those things ad providers like Google, Yahoo, or anyone else involved in PPC sweeps under the rug.

They play it low key, to keep their model and revenue going. After all, why would they want to kill 30% of their existing revenue?

The FBI can detect and locate hackers, why can’t the PPC people do it? They have the resources.

Bringing in revenue for the big corporate giants is the game now. Integrity is gone. Google’s motto was “Do No Harm” but by letting things like this go, they are in fact doing MUCH harm buy standing still. Using the excuse that they didn’t actually do it, doesn’t hold water.

The next generation model that makes sense is the Pay Per Action one. No fraud, and advertisers pay only if they get results. Problem is Google doesn’t want to give up their fat margin PPC system even though it IS better for the customer.

I understand this perfectly, they can’t give up their $16 billion plus ad model to move to a lower revenue PPA system. More revenue keeps them on top, gives them money to stop and crush PPA opponents before they can get off the ground.

Because Google has so much traffic, advertisers continue to use them. As long as Google can keep up the traffic, their PPC model should survive. They even have a Chief Economist for PPC, which shows you how much they need to keep this system alive.

Google knows that PPA is the next natural step, but are trying to prevent it and milk as much mileage out of PPC as they can.

PPA will come, when and form whom, I don’t know, but the way things are going, it has too. It will take a site that has GREAT traffic,  and a PPA model to make them stop and think. But perhaps they just buy them and make sure the ad model is PPC. Was that a Youtube strategy? Google bought  Youtube so Microsoft doesn’t get them into a PPA model?  Maybe, at least part of it.

Anyways, click fraud, over bidding will continue as long as PPC thrives. Unfortunately we have to play the game…at least for now.

In Lesson 1 I will describe the basics of CPC from a new advertisers perspective, how does it work, where do I start?

Cost Per Click (CPC), also known as Pay Per Click (PPC) marketing describes a method of advertising on the web where you pay only for “clicks” you get to your web site. The amount you pay per click is determined by a number of factors. Whether it is successful or not is also determined by your offering. I’ve spent millions on CPC ads, so I have learned a few things that I will pass on to you.

So how does it work? CPC advertising is structured on a bidding system, meaning you bid for specific key words that you want to target. For example, an advertiser who sells “digital cameras” can bid on that key word. When someone clicks on your ad and goes to your web site, you pay for that click.

CPC advertising allows you to highly target the audience you want , even geographically. The theory is, only someone who is looking for a digital camera would type the word in and therefore be someone you want to show your web site to in hopes that they visit your store and eventually buy, or in a local case a hope to visit the store or call.

This differs from the CPM (Cost Per Thousand) newspaper style model, where you buy an ad for a fixed price and hope that its designed well enough that people click on it or read it. This ad is usually served to a general audience, not targeted by key word, so they are less likely to click on your ad.

The CPC model has become extremely popular for advertising on the Internet, as it produces a highly targeted visitor to the site that you only pay for when they do. The main advertisers that offer this are:

Google Ad Words

Yahoo Search Marketing

Microsoft Advertising

Google is the biggest followed by Yahoo and MSN. In fact, I would say Google has more volume in ads then Yahoo and MSN combined at the time of this article.

So you want to try? What do you do?

1. Set up an account with one or all. If you are starting, just pick one.
2. Determine where you want to advertise. What countries do you ship too? If you only sell local, you don’t want to advertise around the country, otherwise your ads will be clicked on by people who you can’t sell too. 
3. Determine the key words you want to bid on. I would recommend you to start with the most competitive products you sell, or the strongest part of your business. CPC ads do not just have to be product based, you can advertise a service as well. All the ad systems have a key word tool that will help you identify relevant key words. A tip here is to keep the words more specific. For example, if you select “digital cameras” you will be paying a fortune for this word, as there is a lot of competition and searches done for this term. However, if you select “Panasonic Lumix” you will get a more targeted buyer and a higher conversion rate.
4. Determine where you want to link to. Once the user clicks on your ad, where does the link go? Linking to a relevant page would be ideal. Don’t link to your home page when you can link direct to the Panasonic Lumix camera page, you’ll get better results.
5. Bid. The higher you bid, the higher your ad gets placed. If you bid really high, you will be at the very top. But be careful, you will also get the most clicks.
6. Set the budget. If you are experimenting, make sure this stops you from getting into trouble. If you don’t know what you are doing, you could end up spending a fortune before you know what happened. Set a monthly budget (NOT daily), so you don’t exceed the money you’ve put aside, you can always increase it, but not decrease. Get you feet wet first. Daily budget’s are in some cases really just a monthly budget, so if you set your daily budget at $30, it is really $30 x 30 days = $900. Your spend could reach $900 in ONE DAY!!! So watch out.
7. Determine time of day. Ads can be targeted by time of day (not in all systems). This is useful as you don’t always want to display ads when you are not there to answer questions. This could result in you loosing the customer.
8. Start small, keep it simple. Master the basics, learn the system, there is plenty of time to expand. If you don’t, you could bite off more then you can chew. Also, keep experimenting, most people don’t get it right the first time.

These are the basic minimums. I could go on all day about other things related to CPC. Your page, web site design and policies also have a large influence on your success but this will have to do for now. Stay tuned for more.  

CPC advertising is a highly competitive game, with lots of competition, veterans have a vested interested in keeping newbies away, after all it eats into their bottom line. There are cons to this system as well, but if you want quick targeted traffic at a controlled budget, there are not many other choices you ha

I like reading Techcrunch articles because they seem to be on the pulse. I read one today that Google is tweaking their Adword system to recognize quality more.

Google Tweaks AdWords To Reward “Quality” (And Juice Revenues)

In it they talk about the Adwords Blog:

To appear above the search results, ads must meet a certain quality threshold. In the past, if the ad with the highest Adrank did not meet the quality threshold, we may not have shown any ads above the search results. With this update, we’ll allow an ad that meets the quality threshold to appear above the search results even if it has to jump over other ads to do so. For instance, suppose the ad in position 1 on the right side of the page doesn’t have a high enough Quality Score to appear above the search results, but the ad in position 2 does. It’s now possible for the number 2 ad to jump over the number 1 ad and appear above the search results. This change ensures that quality plays an even more important role in determining the ads that show in those prominent positions.

What I see here is that Google is making it easier for Ads that “meet” the quality score to be displayed in the top section of their web site above the organic search results. In the past, it used to be a combination of quality and bidding. If the bid was high enough it would make it. Sometimes no ads would show on the top, all the way up to 3.

As most marketers know, the most clicks happen on the top results, with less on the side. So by allowing more ads to be placed on the top, more clicks will happen resulting in more revenue for Google.

While increasing quality content is always a good thing, ads are not really considered content per say. Because the move increase revenue to Google, its good intention seems to be diluted by the revenue grab.

Ultimately the market will decide. PPC advertising is extremely competitive, with advertisers struggling to find the fine line between winning and losing. This will make it even harder.

In the past model, advertisers that had good quality ads but didn’t want the “looky loo” traffic, could strategically place themselves on the side ads on Google. This would result in “filtered” traffic, customers who actually wanted to click on the ad because they sought it out.

In the new model, advertisers thrust to the top will see increased spending due to the additional “looky loo” traffic, traffic that won’t convert as easily.

The market will have to adjust, but I see it as another squeeze on a PPC model that will be difficult to maintain in the long run.

Pay Per Click advertising is a huge business, generating billions for the online ad market. Below is a chart from Lehman Brothers, notice “Search Advertising” is the largest form of revenue right now at over $11 billion in revenue. 

Projected Online Ad Revenue

As someone who advertises heavily using PPC (Pay Per Click Advertising), I would consider myself an expert. I’ve used Google, Yahoo, MSN to name the major ones in my past and present.

If you are not familiar with PPC, it is essentially like this. A whole bunch of advertisers BID for the position of their ads when a key word is searched on a search engine. Meaning the higher you bid, the higher placement you will receive and the more traffic you will get (higher placement attracts more clicks and thus more traffic).

It is highly targeted and seemingly cost efficient, because you don’t pay unless someone clicks on your highly targeted ad.

You can further control how these ads are placed by limiting your bid, daily spend, time of day, geographic territory and what sites it may show up on.

PPC advertising is great because it allows even small businesses to instantly gain traffic on a limited budget. If you aren’t sure how to do this or don’t have time, go to any search engine and type in PPC, you will find a range of services of companies that have popped up to manage PPC.

PPC has become a huge industry, it’s main players are companies like Google (Ad Words), Yahoo (Search Marketing) and MSN (Microsoft Ad Center) and is a major source of revenue.

The World Turns on PPC, but as we know, the world is not perfect. More to come.

Hello,

I am very pleased to be able to present our Blog to the web. This Blog is a placeholder for our future web site. We are currently developing something bigger and better then was ever done before that will change the way online marketing works today.

I have spent millions in advertising and have learned that although you can succeed, the big winners are the advertisers, they always win. Our site will change this.

It’s going to take some time, but stay tuned, hopefully I’ll include some useful Blogs along the way.

Richard