Thursday, January 19, 2006
John Battelle's Searchblog: When Might the PPC Gap Close?:
"In conversation with folks equally besotted with all things search and marketing, the talk often turns to click fraud.
After some mandatory clucking of tongues, I go off on my own little riff about the subject - how it's difficult to prove as a percentage of overall PPC revenue (beyond the anecdotal), and how - for the time being anyway - it really doesn't seem to matter. Click fraud is something of an ecosystem 'tax' - advertisers who are putting $1 into AdSense, for example, are (usually) getting more than $1 back. Whether they get $2.00 or $1.75 is not that important, if, say, 12.5% of the clicks are fraud, who cares? You can always petition Yahoo or Google for a refund (though not all do).
Only when they start getting back 99 cents (or less) for that $1.00 will the 'margin pressure' build to 'do something about click fraud' in any real sense. In the meantime, advertisers are happy with AdSense, because, well, it works well enough, and there's no incentive to change it.
This post about a recent earnings release from FTD, written by Jeff Matthews, struck me as a potentially important insight with regard to all this...
...A possible conclusion? Search marketing may be on its way toward a slowdown, if not a plateau. And while this is entirely anecdotal, and certainly nothing to base decisions upon, it points to the margin pressure idea, and, I think, validates it. At least as far as FTD is concerned..."
"In conversation with folks equally besotted with all things search and marketing, the talk often turns to click fraud.
After some mandatory clucking of tongues, I go off on my own little riff about the subject - how it's difficult to prove as a percentage of overall PPC revenue (beyond the anecdotal), and how - for the time being anyway - it really doesn't seem to matter. Click fraud is something of an ecosystem 'tax' - advertisers who are putting $1 into AdSense, for example, are (usually) getting more than $1 back. Whether they get $2.00 or $1.75 is not that important, if, say, 12.5% of the clicks are fraud, who cares? You can always petition Yahoo or Google for a refund (though not all do).
Only when they start getting back 99 cents (or less) for that $1.00 will the 'margin pressure' build to 'do something about click fraud' in any real sense. In the meantime, advertisers are happy with AdSense, because, well, it works well enough, and there's no incentive to change it.
This post about a recent earnings release from FTD, written by Jeff Matthews, struck me as a potentially important insight with regard to all this...
...A possible conclusion? Search marketing may be on its way toward a slowdown, if not a plateau. And while this is entirely anecdotal, and certainly nothing to base decisions upon, it points to the margin pressure idea, and, I think, validates it. At least as far as FTD is concerned..."
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