Google Cracks Down on Arbitragers

Any time Google tweaks its algorithms, it sends SEOs scurrying to figure out what’s going on. The latest tweaks are no exception, even though they don’t affect Google’s organic search results. If you have a pay-per-click campaign going, though, you’ll want to keep reading.

If you’ve been web surfing for a while and click on search engine ads regularly, you’ve probably encountered “Made for AdSense” websites. These sites entice with ads or sponsored links that turn up near the top of the search results for keywords with high click through rates. When you click on the ad to visit the site, however, you are greeted by a landing page that is full of other ads and very little content. What happened? The owner of the site may pay a little money to the search engine every time his ad is clicked in Google, but he more than makes it back from the web surfers who land on his big page of advertising when they click on THOSE ads.

As a group, these folks are known as arbitragers. Google’s guidelines for webmasters specifically discourage made for AdSense (MFA) websites, but the monetary rewards are still seductive. While arbitragers make money from their MFA sites – and, let’s face it, so does Google – they degrade the user experience. If a searcher clicks on an ad expecting to reach a site that’s highly relevant to her search and lands on a page with more ads instead, what does that tell her?

It sends a message that search engine ads can’t be trusted to deliver relevant content. In the future, this web surfer will be less likely to click on ads or sponsored listings. Multiply the one web surfer by everyone who has had this experience, add to that the percentage of Google’s revenue that comes from advertising, factor in the long term, and you have an equation that is not good for the search engine’s eventual bottom line.

Google is aware of the problem. Not surprisingly, it has begun taking steps to correct it. Actually, it started making some moves toward fixing the problem a year ago, when it began using a quality score system to help calculate an advertiser’s minimum bid for keywords. At that point, Google only figured in the historical performance of the keyword and the relevance of the ad’s text.

That changed in December. At that time, Google started examining a site’s landing page and considering its relevance to the keyword. The landing page’s relevance then began to be factored into the quality score as well. Remember, this quality score was still being used to calculate an advertiser’s minimum bid for keywords.

In mid-July, Google adjusted that algorithm once again. Unfortunately, it has provided few details as to what the change entails. In its “Inside AdWords” blog, the company would only state that “From time-to-time, we improve our algorithms for evaluating landing page quality (often based on feedback from our end-users), and…we’re launching another such improvement. Thus…a small number of advertisers who are providing a low quality user experience on their landing pages will see increases in their minimum bids. It is important to note, however, that the vast majority of advertisers will not be affected at all by this change, as they link to quality landing pages.”

The idea behind this tactic is to make it less profitable for those running MFA sites to continue using AdWords. If the price they pay to lure web surfers to their sites goes up, then they net less of a profit when the ads on their sites are clicked. Indeed, Peter Hershberg, managing partner at search engine marketing firm Reprise Media, figures that “The first advertisers that Google is going to focus on are the pages that only feature AdSense or some other contextual advertising product.”

If Google does that, it may actually lose money in the short term. But the search engine is focusing on the long term, to judge from its Inside AdWords statements: “Although it is counter-intuitive to some who hear it, we’d rather show one less ad than to show an ad which leads to a poor user experience – since long-term user trust in AdWords is of overarching importance.”

Some have suggested that there’s a more sinister reason behind this change. At least one observer is wondering whether Google has tweaked the algorithm specifically to target sites that show ads from Yahoo or its other competitors. That seems unlikely; if too many advertisers who feature those kinds of landing pages found their quality scores going down, someone would spot a pattern. After all, SEOs and advertisers talk – and when the topic is changes being instituted by Google, you can bet they’ll talk about all the possibilities, spinning theories like a team of science fiction writers working on a new TV series.

In fact, some AdWords users are already seeing some kind of effect from the program. Changes to algorithms never happen without some bumps along the way, or so it seems. This one is no exception. A number of advertisers have reported what can only be described as hyperinflation on AdWords, and many insist that they aren’t running MFA sites.

E-consultancy wrote about the experience of Trevor Ginn, head of consulting at Auctioning4U. The company is based in the UK, and helps its customers sell goods on eBay. In one week, Auctioning4U saw its average click costs rise by 2000 percent. Ads that originally cost less than 50 pence per click now cost more than five pounds.

Ginn isn’t alone. Graywolf, a regular blogger on SEO topics at Threadwatch, has seen many of his keywords turned off due to low quality. In a post that included a screen shot of the situation to prove his point, he explained that two of his keywords, originally running in premium positions with a double digit click through rate, have suddenly “become low quality and have had their bid prices jacked up to $1.00 and $5.00! How do you go from premium position to low quality overnight? How can you justify the price doubling or increasing by a factor of 10 overnight?”

If Google’s strategy was working, one would assume that the increased bids were caused by a low quality score, which, given the timing, would be due to the landing pages being of low quality. Except that doesn’t appear to be true, at least in Ginn’s case. E-consultancy looked at his landing page, and it appeared to give a description of Auctioning4U’s services, which was reasonable and relevant given his ad. In the case of Graywolf, by his own description, his landing page isn’t ad-filled at all – it’s a single product with the product’s description and a “Buy Now” button, which goes through a redirect page and then to the merchant’s web site. Assuming the ad mentioned the product, it’s hard to see how the landing page could be more relevant.

Google instituted this change very quickly, which caught a lot of advertisers flat-footed. But it looks like Google tripped up more than just the MFA site owners it was trying to catch. Some of the problem may have to do with how Google determines what is relevant. Al Scillitani, search marketing manager at Fortune Interactive, wonders how well any bot can calculate a relevancy score. “If the bot does not recognize a synonym of your word or if it is taken out of context, will this affect your quality index score?”

It could be a real problem for those who have landing pages set up that include rich media such as Flash. If a search engine spider can’t crawl the landing page, it can’t deliver a valid score for the landing page. So those who create landing pages will have to take SEO a lot more seriously than they have up until now.

Some SEOs discussing these changes on the forums have said that Google’s latest move will really hurt the small time advertisers. There are a lot of tricks to advertising in AdWords and making your ad stand out. The new algorithm makes it more likely that your ad will be deactivated due to low quality if you do not get everything just right. Since a small advertiser probably won’t want to spend the time learning all the tricks (they’re too busy working on the rest of their business), they’re likely to stop advertising with Google.

So how do you avoid this problem? Google has posted guidelines pertaining to landing pages and site quality. Not surprisingly, the first guideline is “Provide relevant and substantial content.” Perhaps it should have added “in an easy-to-crawl format.” If you read through them, you’ll see that most of the guidelines seem to be common sense. If these changes help get rid of MFA sites, a lot of people will benefit, from searchers to legitimate publishers who use AdSense to legitimate advertisers; but so far, the implementation leaves something to be desired. Let’s hope this flight doesn’t turn into a disaster movie for too many AdWords users.

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