Search Arbitrage: The Good, The Bad, But Mostly… The Ugly

1. Search Arbitrage:The Good,The Bad,But Mostly…The Ugly Search Arbitrage:The Good,The Bad,But Mostly…The Ugly

2. The Definition of Search Arbitrage Search Arbitrage is the practice of running a PPC campaign with the sole objective being strong cost control that is below generated revenues.

3. When Does Search Arbitrage Get Ugly? When the Arbitrager has no ownership of content and no responsibility for campaign integrity, with the primary focus being to generate as much revenue as possible for their personal wealth rather than growing a true business.

4. Business Week Names Names • In the October 2, 2006 issue of Business Week conducted an investigative report on new click fraud tactics. • Search Arbitrager were called out for tactics that ranged from pay-to-read campaigns to automated click bots to PPC-only designed search engines. • Search arbitrage and Click Fraud has gone mainstream.

5. Search Arbitrage Fraud Highlights • A McGregor, Minnesota couple set up dummy Web sites filled with nothing but recycled Google and Yahoo advertisements. In just 4 short months, this couple made $20,000, commenting, "it was way too easy" to essentially fool the engines. • A 23-year-old Hungarian millionaire Roland Kiss, who rakes in $70,000 in ad revenue per month by engaging his "Paid to Read" membership to click on his recycled search with instructions on where, when and how often they should click. • These Arbitragers admit they must follow strict practices in order to receive payment so that the click fraud will go undetected by search engine detection algorithms.

6. Keep The Internet Ecosystem Clean Users Give them what they want the first time Publishers Maximize ROI Maximize earnings with useful ads Advertisers

7. The Ecosystem Attacked

8. The Ecosystem Attacked

9. Wood from cypress, which full-grown rise 85 feet tall, is valued for beauty and resistance to rot and insects, The bald cypress is found in marshy areas in the United States. The swampy Wetlands is an example in Southern Missouri where to find this tall tree. but there is a market hungry for things shingles and lawn furniture, to cabinets and mulch More Topics: Bald cypress Cypress Swamps Cypress Shingles Cedar Shingles Redwood Decking Tree pruning Leland Cypress Evergreen Trees Monterey Cypress VER The Top Information about Cypress Trees RELATED TOPICS Tree Care Tree Buying Building Materials Evergreen Trees Fruit Trees Shade Trees The Ecosystem Attacked

10. Results for Cypress Trees: Ads by Google Douglas Fir Italian Cypress Leland Cypress Monterey Cypress Related Topics: Flowering Trees Christmas Trees Fruit Trees Dwarf Trees Oak Trees Maple Trees Shade Trees Native Trees Evergreen Trees The Ecosystem Attacked

11. Causing extra clicks drives users away Information SUPER FREEWAY We have done the work for you: Cypress Trees The Ecosystem Attacked

12. CYPRESS TREES The Ecosystem Attacked

13. The Ecosystem Attacked

14. Are These Tactics Fraud? Yes No

15. What Are Yahoo’s Publisher Policies?

16. What Are Google’s Adwords Policies?

17. What Are Google’s Adwords Policies?

18. What Are Google’s Adwords Policies?

19. The Ecosystem Restored

20. What’s Google Doing About The Problem? • In July, Google made a significant change to the Adwords Quality Score algorithm, including landing page relevancy into the equation. • Google search bots began crawling your site, evaluating your landing pages, and determining the relevancy of the page coding to the searched term and its associated ad copy. • In Early November, Phase 2 rolled out, applying the same algorithm to the Content network. • Additionally, Google deep another deep crawl with an improved model across Adwords networks to clear out more of the bad guys. **As summarized by my Google contacts

21. What’s MSN Doing About The Problem? • MSN has been slow to react, but their need to react were not as significant as Google’s needs. • Upon rollout in May, MSN was clean and user friendly…but by August the Arbitragers found a new home. • Last week, MSN began its first efforts to combat the search arbitraging efforts by changing its policies as it relates to display URL usage.

22. What’s MSN Doing About The Problem? MSN will be changing its policy on multiple pay per click search ad listings showing the same display url. Historically, more than one listing with the same display url could show on the search results page. The new policy discontinues this activity. Visibility on keywords will be limited to one ad per display url. Should two ads be bidding on the same keyword, the ad with the highest click thru rate will be displayed. This is an important change to be aware of as it differs from Google’s display url policy. Unlike Google, in MSN ownership of the actual display url does not grant the advertiser the right to have their ads shown above affiliates or display url pirates. MSN feels it is up to the advertiser to monitor their affiliate’s activities including utilizing inappropriate display urls. **As summarized by my MSN contacts

23. What’s Yahoo Doing About The Problem? ?

24. How Do We Solve This Problem? • Search engines need to develop specific requirements and enact strict enforcement in the terms of use on the amount of "other" content required to show paid ad listings. Pages that don't have any meaningful content clutter up the Web and should be either removed, or at the least, engines should not allow them to carry their listings. • There must be specific requirements and guidelines on acceptable practices for impression generation. Illegal, false and misleading advertising must result in immediate legal action and program expulsion. • All entities involved -- the engines, advertisers and intermediaries -- need to jointly develop a blacklist of all suspected fraud perpetuators and share that information for mutual protection. • There should be a manual daily review of each partner site that delivered traffic to see whether they are in violation of any of the guidelines. • Set up an industry task force that reaches beyond just the search engines bonding together, as advertisers and SEM firms have much more insight into the click fraud problems.