We Miss The Golden Days of the Internet – Pay Per Click Advertising Circa 2003

Megan Williams Oil on Linen

Once upon a time in the golden days of the Internet circa 2003, small businesses were prospering because of a brilliant new way to generate revenue called pay per click (ppc).

PPC was inexpensive and – once you had some level of skill at using it – would deliver targeted visitors willing to buy!

Businesses could quickly and almost easily prosper! The party didn’t last too long though.

Originally the traffic was VERY targeted and it converted well.

Both Overture and Google AdWords worked very well for small businesses. Then Yahoo! bought Overture and it worked great until their new system dropped the results advertisers had been getting from Overture. Migrated accounts were as scrambled as that egg in the image would be if you took a whisk to it – so badly that starting over was faster. (As for Microsoft’s entry – it is not worth the time it would take to write about it.)

Google came out with an Expanded Broad Match – a change that makes advertising there extremely risky because their idea of a “match” is SOOOO expansive that it is dangerous to run anything but exact match keywords.

The mood of the ppc party had permanently changed for the worse.

Google has since added this Expanded Broad Keyword Matching page marked NEW! (note the changed phrase – this makes expanded broad match even broader) and sounds like what is described on their Automatic Matching page which indicates it was optional:

Opting in: Automatic matching won’t bring your campaign additional relevant traffic unless you opt in on the Campaign Settings page.

I do not see that option today so it appears that it is not possible to opt-out of these ever-expanding irrelevant ad impressions.

The only thing that MAY work is to ONLY use exact match.

The quality targeted traffic available from broad and phrase match has now been too diluted to be effective due to wildly unrelated search impressions and what PPC experts call Distribution Fraud: showing ads on MFA (Made for AdSense) parked domains and at the top of searches for videos, friends, and profiles at sites like MySpace.

As PPC Expert Richard Ball asks in his Apogee Weblog:

“How does Google explain the decision to detail clicks from individual domains on their pay per click advertising network but to hide the individual parked domains from advertisers?”

There is also Google-sponsored Fake Search Click Fraud – showing ads limited by the advertiser to search only on sites where NO search took place. These sites show your most expensive, targeted ad on generic searches thereby maximizing advertising spend and nearly eliminating the potential of closing any sales!

Spending spirals out of control and conversions dwindle or disappear altogether, resulting in HUGE jumps in advertising costs to make NO additional sales – or NO sales at all! is the worst possible scenario for a small business.

Finally there are artificial minimum bids that first appeared during critical sales periods such as the holidays and later became permanent. Google finally admitted that the placement auction wasn’t really an auction at all. Some don’t believe this is happening so the screen captures below are just for you.

Because NoBogies is a new site and I have extensive ppc experience we decided to see if we could manage to generate some highly targeted traffic without losing our collective shirts. They show the challenges of getting the keywords in one new ad group for golf gifts to display.

In case you can’t read this image clearly, the text says “Bid is below first page bid estimate of $x.xx” – In our case the amounts are from $0.70 to $1.25.  When you point your cursor at the Keyword Analysis Ads Diagnostic Tool (the little magnifying glass icon) for the keyword phrase gifts for golfers that does NOT have that “Bid is below first page bid estimate…” message you get this:

It doesn’t really matter much which error you get because in both cases your ad will not appear. So how many advertisers ARE willing to pay these artificially inflated “auction” prices? How many other advertisers are crowding our ad off that all-important first page? How many ads do you see in the image below?:

For those not familiar, Google ads appear above the regular organic listings on the left side of the page and/or on the right side where I have added the colored circles (above). Do you see all those ads that are outbidding us and pushing ours off the page? You can’t? That is because there are no ads there.

There are currently ads running for these particular keywords at this particular time; however, a page without ads is precisely what advertisers have seen during the critical holiday period. Ads that were appearing for minimal bids (anywhere between ten and seventy cents or slightly more) would suddenly refuse to run even when bids were raised to $20 a click! Then several days BEFORE the best holiday shipping ends (when you can still ship at the lowest rates) bids suddenly drop – all at once – and ads suddenly reappear!

What advertisers would be in there lowering their bids in the middle of their busiest season of the year? What advertiser would be lowering their bids when there are still 2-3 prime days of selling left in the season?

The only answer MUST be that GOOGLE dropped that artificial minimum back to normal.

This is ample indication that advertisers must immediately start diversifying. What percentage of your sales are dependent upon traffic from Google? How long could you operate if you suddenly dropped off the first page in the organic or paid search listings? One of my main reasons for working on affiliate programs is to find ways for small businesses to diversify.

The most interesting thing I learned today about AdWords is that our ads (which I have opted out of search partners and should therefore ONLY appear on Google.com) DO appear in searches done on my favorite search engine Zuula which pulls results from Google.com. Apparently they are NOT considered a search partner and are considered the same as Google which means analytics for ppc ads just got even more complicated.

Google hopes you’ll pony up whatever it takes to get your ads to show. Sometimes raising your bids will work; often it doesn’t. My advice when you run into this problem? Ignore those messages and let your new ads run for a while. They may get some impressions and sometimes they’ll even take off and run.

During the holidays do NOT automatically start increasing your bids. First determine what your break-even rate is and then only bid when your sales are still generating a profit. It is rarely wise to intentionally lose money on every sale because your advertising costs are higher than your profit margins! Even though you won’t see your usual holiday increase at least you won’t be digging a debt hole.

AdWords is now so volatile that some of the very best ppc consultants no longer accept client’s money to manage them because the risk is so great.

Anyone who spends more than a minimal amount or uses broad or phrase match has only one way to prevent losses: automate your account using an independent Web analytics package such as Lyris (formerly ClickTracks) feeding a Bid Management program in real time.

Their PPC Management solution might do that. To safely use AdWords you must be able to immediately clamp down on out-of-control spending – and that takes a computer. It is not humanly possible to control spending manually. ClickTracks is the only solution I know of that uses live Web analytics to control a bid management program.

If you know of any other combination analytics bid management solutions or have experience with Lyris / Click Tracks we would love to hear from you. Please add your input in our dofollow KeywordLuv CommentLuv comments.

What we are hoping to see is Social Networking ppc advertising – and the sooner the better.

History of PPC:

• GoTo to Overture to YSM – Timeline
• Semvironment: The History of Pay Per Click Advertising and Yahoo! Sponsored Search
• PPC Advertising – The History of Yahoo Search Marketing & Other PPC Services
• Google AdWords: A Brief History of Online Advertising Innovation
• Originator of the PPC Marketing Concept
• Introduction to Search Engine Marketing: History of PPC Advertising
• Pay-Per-Click Search Engine Marketing Handbook Review
• AdWords Landing Page Quality Score and the History of PPC Price Inflation

Google AdWords Issues:

• NEW: Are You Getting Killed? – What to read when you’re stressed out over what used to work (Jul 16, 2009)
• In Case You Missed It: Google’s PPC Fraud Settlement (Apr 6, 2009)
• Beware – Expanded Broad Match – Is Google Helping Advertisers? (Mar 2, 2009)
• AdWords Management: When to Just Say No to Google AdWords (Feb 18, 2009)
• Google Groups AdWords Help Archive: Broad Match Ethics (Oct 9, 2008)
• Match Type Strategies; Lessons Learned (Sep 3, 2008)
• Distribution Fraud is Google’s Miserable Failure (Mar 22, 2008)
• Stomp the Google AdWords Expanded Broad Match Problem (Jan 8, 2008)
• Google AdWords Broad Match; How to Combat Google’s Cash Grab (Nov 11, 2007)
• PBS: I, Cringely: The Next Microsoft: Google is Learning Too Well From The Master (Nov 2, 2007)
• New AdWords Matching Type Discovered: “The BOGUS Broad Match Type” (Oct 21, 2007)
• Expanded Broad Match Warning (Oct 15, 2007 – Jennifer Laycock – Search Engine Guide)
• Expanded Broad Match and the Google 1-2 Punch (Oct 14, 2007)
• Expanded Broad Match Goes Loco on Local (Aug 31, 2007)
• Prevent Click Fraud From Eating You Alive (Aug 22, 2007)
• Be Careful of Google AdWords Expanded Broad Match (Jun 19, 2007 – Christine Parfitt – AUS)
• Yahoo SERP Lists Google Group That Redirects to MFA Search Page (May 31, 2007)
• AdWords Flaw Could Cost Small Business Millions (Mar 28, 2007)
• Google: Screwing Advertisers Over Before Christmas (Nov 6, 2006)
• Are You Paying for Irrelevant Clicks Because of Google Expanded Broad Match? (date unknown)

PPC Management Tools:

• Lyris (formerly ClickTracks) on demand Webinars on PPC, ROI and Analytics
• Lyris PPC and Web Analytics Guides – once you submit your information you can access the PPC white paper)
• What is Impression Share Exact Match? Reporting Tool Provided by Google

We have recently come across a brilliant PPC management company and highly recommend their blog posts:

• PPC: The Wrong Way to Improve Efficiency
• PPC: Holiday Bid Management Tips

Tagged as: AdWords, Google AdWords, Pay per click