Google Policy Will End Subsidies to Search Arbitragers

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In last month's DM News' Essential Guide to Search Engine Marketing supplement, I discussed the prevalence of "click farms" - sites that are distributors of pay-per-click ad listings who conduct the practice of search arbitrage. These sites offer little or no original content and serve only to drive up prices for legitimate marketers. Many advertisers aren't even aware of this latest form of click fraud, and my hope in that article was to raise awareness.

You can imagine my satisfaction when I read recently that Google has taken a major step to rid the marketplace of these bottom-feeding search arbitragers. Relevancy is the cornerstone of this new policy. In keeping with its original mandate to provide consumers the best possible search experience, Google now crawls and analyzes landing pages to determine the relevancy of their content with the search ad.

If Google finds a low degree of relevancy, that advertiser's quality score is likely to be hurt and that advertiser likely will see its per-click prices rise. As Google's inclusion of landing page analysis in its quality score algorithm takes hold, bid prices in some categories undoubtedly will come down for relevant advertisers as the click farmers' quality scores are eroded and they are forced to pay more for their clicks. In many cases, this will put them out of business, or at least less able to intermediate the clicks that ultimately go to the real advertisers.

The ramifications of this new policy will be far-reaching:

  • Non-click farm advertisers will benefit from this decreased competition and will pay more appropriate prices for their clicks.
  • Click fraud and multiple search ad clicking will slow, optimizing conversion rate and revenue productivity not only in Google, but also Yahoo.
  • With a large percentage of the arbitragers using Yahoo's distribution network, Yahoo could see unexpected revenue losses because of Google's new policy.

As search becomes more complex, new forms of click fraud like these click farms will continuously appear. As the search engines respond, it is important that your search manager, whether in-house or outsourced, understands how this latest Google change could affect your business.

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