How Google rips us off April 24, 2008

Online marketing is something I don’t know too much about and have very little interest in, to be honest. I’ve always seen it as a rather weak attempt at making people believe they need and want something when , in fact, their lives would be perfectly clutter-free without that new vacuum cleaner or talking toilet paper holder .

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I’m the kind of person who desperately tries to ignore adverts both on and offline. And I would even go so far as to arrive late for big-screen movies just to avoid the mind-numbing 20 minutes of advert-filled torture before the movie. But then I am obsessive about being punctual.

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So instead, I arrive on time and pay to be told how a Taser with built in MP3 player is something I have always wanted. When it comes to online adverts I just pretend the little blighters don’t exist; that I haven’t noticed them in Gmail invading the privacy of my email-sending sessions or in a neat little column on the right hand side when I perform a google search. I ignore and above all never click.

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Now you can imagine how thrilled I was when my lecturer registered my class to take part in the Google Online Challenge. This means $200 of free Google Adwords advertising for a Grahamstown business of our choice (whoopee). It also means that I’m helping clutter the net with more adverts. And I can’t even allay any of this cynicism by thinking this may help the business we’ve approached. The truth is; I think Adwords is only really useful for businesses with lots to spend and even then I’m not convinced. Here’s why:

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• Google is currently being sued for one of its Adwords policies because it allegedly misleads advertisers. When setting up the Adwords account you have the option to allocate a maximum amount for Cost per Click (CPC). There is another option which involves the CPC for the content network, in other words Google’s third party sites. If you leave this blank your ad will still be entered into Google’s content network and you will be charged for it appearing on these sites without your knowledge.
• The Google Online Challenge is due to begin so I logged on to check if the details of our campaign were correct. I first had to agree to a new set of terms and conditions before I could access any information about our campaign. There were a couple of things that stood out :

“The Program. Customer is solely responsible for all: (a) ad targeting options and keywords (collectively “Targets“) and all ad content, ad information, and ad URLs (“Creative“), whether generated by or for Customer; and (b) web sites, services and landing pages which Creative links or directs viewers to, and advertised services and products (collectively “Services“). Customer shall protect any Customer passwords and takes full responsibility for Customer’s own, and third party, use of any Customer accounts. Customer understands and agrees that ads may be placed on (y) any content or property provided by Google (“Google Property“), and, unless Customer opts out of such placement in the manner specified by Google, (z) any other content or property provided by a third party (“Partner“) upon which Google places ads (“Partner Property“). Customer authorizes and consents to all such placements. “

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The sections in red I’ve highlighted especially in light of Google being sued. When I initially set up the campaign I don’t remember agreeing to allow Google to place the ads on any of their third party sites as it feels fit. The content network , Google’s third party sites, have a 76% reach in the US and a 75 % reach in the UK. How is that going to help a small Grahamstown business? Consider also that Google does the matching; deciding where in its content network the ad would be best placed and often these sites may have little or nothing to do with the product being sold. There are, of course, success stories but these aren’t niche businesses in South Africa.

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• Some Adwords users have complained that the traffic generated by Adwords is from link farms and therefore won’t make any difference to their bottom line. As much as 30-40% of the traffic generated on some sites comes from link farms – this is bogus, worthless traffic that the advertiser still pays for.
• Google recently introduced Automatic Matching into Adwords. The advertiser can set a maximum CPC budget for their CPC. If their campaign fails to meet that budget Google can activate Automatic Matching which means that any surplus budget is used by Google to target keywords you may not have selected as part of your campaign. These key words may not even be directly related to the product being sold. This is paternalistic and in most cases probably does little more than boost Google’s revenue.
• Adwords uses an auction system where advertisers bid on the keywords they want. Each bid is then multiplied by what Google calls a quality score which determines how high up an ad features if at all. The quality score includes things like click-through rate, ad relevance, and quality of ad as well as “other relevancy factors” – whatever those might be. Google then uses this to give each bidder a unique minimum bid which often ends up being quite high for smaller entry-level businesses or new advertisers.

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What chance does a small South African business have when Google has such control over a system that seems biased towards multibillion dollar companies? I wonder whether there is much point in participating in the Google Online Challenge. How will the company we’ve approached really benefit? Perhaps it’s time to start looking elsewhere for places to advertise.