Pay-per-click and domain parking
A session today at the TRAFFIC conference in Florida explores PPC and if domainers can count on this revenue source in the years to come.
Domain investors are heavily dependent on pay-per-click advertising revenue, so they often walk around with a feeling of insecurity. They wonder if that critical revenue stream might disappear – or decline — if advertisers
decided they didn’t want their paid-search ads, primarily placed through Web giants Google and Yahoo, to appear on so-called parked domains. Today, Eytan Elbaz, who runs the domain channel at Google, offered some insight into the public-relations problem the sector faces. “People perceive that the quality of your traffic is not as good as others,” he told domain investors, “when in fact it really is.”
That last part is encouraging to investors. But one of their clear challenges is to demonstrate to media buyers that they offer quality traffic. That’s an uphill climb.
The traffic-quality issue came up at a panel discussion on click fraud, during which Elbaz stressed that Google has a number of techniques to combat the problem and continues to bolster them. “Google takes click fraud very seriously,” he stated, and actually blocks “the vast majority” of it using real-time filters ahead of any advertiser gets billed.
As stated by a recent BusinessWeek cover story, academics and consultants estimate that 10% to 15% of clicks on paid-search ads are fraudulent. Elbaz declined to say what percentage of clicks on ads in the Google network are fake, saying, “The media loves to speculate on this stuff
since it is a pretty hot topic. The truth is I can’t tell you.”
Dan Warner, the chief operating officer of Dark Blue Sea Ltd./Fabulous.com, which owns a sizable portfolio of domains and helps domain owners earn pay-per-click ad revenue, stated “very little click fraud actually exists nowadays” since of major technological strides by Google and Yahoo. Warner stated he thinks less than 1% of clicks are phony.
John Berryhill, a lawyer who represents a number of big domain owners, stated click fraud is a concern, but it is exaggerated by plaintiffs attorneys seeking a cut of the revenue enjoyed by the likes of Google. He also stated “a little perspective is needed.” He held up a copy of today’s USA Today, criticized the quality of its journalism, and pointed out that many people in the room received a copy outside their hotel room door but either didn’t read it or barely looked at it. Advertisers, he stated, waste a lot of money on print ads in that paper and other publications, and those ad rates are based on circulation numbers that don’t accurately reflect how much the publications are actually read. “The reason click fraud gets a lot of attention is since of the accuracy with which it can be measured,” Berryhill stated. “Nobody runs around chasing newspaper guys . . . It’s almost a blessing and a curse at the same time that if you’re an online advertiser you can measure how much of your budget is wasted.”
