google

http://blog.washingtonpost.com/securityfix/2007/04/virus_writers_taint_google_ad.html

The above article describes a method used by some bad elements of society to install malware on vulnerable pcs as users click on adwords ads. Replies to the thread tend to point out the vulnerabilities of Internet Explorer Browser as the main culprit in the issue. In effect, the ads would point to a virus which would attempt to install on the users pc & then quickly redirect to the advertised site. Targeted keywords for the ads included well known institutions such as the BBB.

Today Google announced a Pay Per Action beta test destined for their adsense contextual advertising product. In essence, PPA does not incur a cost to the advertiser unless the visitor takes an "action". This could include a purchase or completing a form.

Needless to say, this has lots of Search Engine Marketers, Publishers, & Affiliates buzzing about what it means to the industries.

Nothing... yet.

However, it could become significant in a number of ways.

Some see an opportunity for smaller advertisers to begin advertising online as they would not have the risk of click fraud. Advertisers could determine what their profit per visitor is & then bid a percentage of that profit for a PPA advertisement. It's measurable.

Assuming PPA grows beyond the content network into the search network, the advantage over PPC still eludes me, though. Search engine marketers do this all day, every day with CPC (cost per click). The really scientific ones could tell you conversion rates & revenue per visitor by keyword & time of day. Most of the time this can be done without surrendering conversion rates to a third party like Google.

PPA requires conversion tracking in order to count an "action" (and charge the advertiser). Congratulations. Now another company has almost as much information about your online business as you do... and the resources better analyze the data.

While the PPA Advertising option is in beta & limited to the contextual network, I wouldn't bet on it staying there. If there is any indication that Google can increase profitability by expanding this, it will be scaled. Increase profitability... that's a clue.

Companies spend money to make money. The enhancements that Google has offered with Conversion Tracking, Web Analytics, etc. are given away for FREE (!) despite their development & maintenance costs. The true cost to advertisers is data. Nothing is free.

Some say this is the end for the Affiliate networks & aggregators or even the end of CPC - probably not... but truly it's too early to know if or how this will be adopted.

In the interim, I'm staying on the sidelines & building Content.

Google recently introduced the Adwords Quality Score to improve the experience for Google's users... and perhaps their shareholders as well.

For those who are unfamiliar with the term "Adwords Quality Score", essentially it is an algorithm which is applied to ads and keywords on Adwords which measures the relevance of the landing site to the keywords chosen & the ad itself... Yes, it's the site & not just the landing page. A-B Testing different domain names with the same ad & basic landing page content has confirmed this well enough to convince me.

Shortly after the Quality Score was introduced, Google added a tool to allow advertisers to see their quality score measured as Poor, Good, or Great. It's nice to have a little transparency. But with only 3 ratings, the key word here is little.

Unsurprisingly, our (good) sites which have always had good ad placement & a proven history of higher than average click-through rates showed a quality score of "great" for most keywords. Some longtail keywords fell into the "good" category. Some of the thin affiliate sites will need some work.

To give an example of financial services sites, our keyword minimum bids are running from .01 to .10 cents. Anyone in this niche knows that Google will gladly set minimum bids as high as $5 to $10 in this category if G doesn't like the site for whatever reason.

Ok, so we survived the Adwords Quality Score rating. But many didn't. Their options include dropping they keyword, raising the quality of the page to match some mysterious criteria in the quality score algorithm, or raise their bids.

Now, Adwords positions (and cost per click) are determined by a few main factors... click through rate, maximum bid, & now quality score. For more competitive niches, the end result of implementing a Quality Score is that many advertisers who wish to continue advertising for a keyword with a poor quality score will have to raise their bids. As they raise their bids, it will affect the cost to maintain a position for even those with a high quality score because the cost per click is determined by both bid & click through rate relative to other ads for the keyword.

Consider what that means in a niche that has thousands of advertisers across a gazillion keyword phrases.

Higher bids in reaction to the Quality Score, will drive up the average cost per click for even those advertisers with a high quality score.

I should have loaded up on GOOG at the $86 IPO.

Do you buy text links? Should you buy text links?

I stumbled on an interesting thread on the subject of buying text links on MattCutts.com. Matt Cutts is the head of Google's Webspam team. Here is the link to the full thread.. In essence, it seems Google's stance is that purchasing text links to enhance PageRank is bad. Matt's Blog, however, is a pretty good read.

This stance by Google regarding buying text links ignores several fundamental issues. The first being that the market for buying text links & selling text links existed long before Google did - let alone Google Page Rank. Google now has a Gazillion Dollar market cap precisely because webmasters & online marketers are buying text links from Google. They call it Adwords, though.

There are several reasons that webmasters and marketers might buy text links (or sell text links). The percieved value in enhanced Page Rank is just one possible reason. An equally important reason could be traffic from related sites. To a certain degree, the whole Text Link argument is absurd. If, for example, Google decided to devalue inbound text links which they determine to be "purchased" in determining relevance, would that cause the market for Text Links to fall? Perhaps not. Those sites which are getting traffic & conversions through text links - but no longer receiving any meaningful traffic through Google because they have devalued those links, still need traffic. Buying more text links might do the trick...

The principles behind any SEO campaign, online marketing campaign, advertising campaign, or any other form of marketing activity has close ties to Darwinism... Survival of the fittest. In the end, the free market will determine which dies, survives, or thrives - not Google or any other corporation. With few exceptions, SEO, whether through buying text links or other methods is an effort to reach consumers who will convert into revenue. It doesn't make any sense to optimize for "red widgets" if you do not actually offer "red widgets" or any ancillary products/services. Obviously, there are a few "broad market" products that would be an exception - but the majority of SEO efforts are designed to provide targeted traffic for a targeted product or service. Google strives to provide relevant results & so do most SEO Campaigns. No conflict there.

Buying Text Links could be seen as a form competition to Google Adwords/Adsense... albeit a relatively small one. As more businesses become aware of Adwords & PPC costs rise from competition, advertisers will HAVE to seek out alternative forms of advertising that can produce the desired return on investment. Buying text links could be among those alternative traffic sources.

Capitalism and free markets have profits at their core. If an activity ceases to be profitable, it will cease to exist or diminish in prominence. Simple stuff. Given that text links were being bought & sold prior to Google's existence leads one to believe the business of buying text links or selling text links will be a profitable activity regardless of Google's stance on it or any actions they take to detect/deprecate purchased text links.

By the way, most sites that are ranking well on Google for a competitive term have a LOT of backlinks. Chances are many of those were purchased... either with cash money or reciprocal links. How search engines plan to determine relevance without weighing backlinks (including purchased ones) remains a mystery. Good luck, Guys ;)