Advertisers overpaying for Google ads
ADOTAS — Google might be inflating advertisers’ conversion rates, leading advertisers to pay more than they should, a new analysis shows.
According to Ben Edelman, an assistant professor at the Harvard Business School, Google and its partners intercede in transactions advertisers would otherwise have received for free, so the true effectiveness of the ads Google delivers is overstated. Edelman shows how advertisers, when they measure conversion rates, mismeasure, and end up overpaying for traffic that is far less valuable than reporting systems suggest.
He breaks the four examples down into – Traffic source – How users are found – What would have happened had Google and its partners not interceded
WhenU – adware – User requests advertiser’s site. Adware covers advertiser’s site with pay-per-click listings. – Advertiser’s site displays as usual, with no covering popup. User stays at advertiser’s site, and advertiser pays no PPC fee.
Example – WhenU covers advertisers’ sites with advertisers’ own google ads
SmileyCentral – toolbar – Reconfigured browser tricks user into running a “search” for a site’s domain name. – User’s browser retains its ordinary configuration. User runs a direct navigation, and advertiser pays no PPC fee.
Example – IAC’s SmileyCentral grab advertisers’ organic traffic to show google ads
Typosquatting – User misspells advertiser’s domain name. User’s browser shows a list of alternatives, and user selects one — reaching advertiser’s site at no charge. Or, user sees an error page, notices the misspelling, and corrects the spelling to reach the advertiser’s site without a PPC fee.
Example – Cmcast.com, MediaLogik and others intercept users’ misspellings to show google ads.
Chrome – browser suggestions – User typing a web address is encouraged to run a search instead. – User finishes typing the site’s web address and reaches the advertiser’s site without a PPC fee.
Example – suggestions divert users from direct navigation to search.
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