Google's Move Away From Direct Marketing to Selling Branded Ads

Jun 18th

Ad Relevancy & Quality Scores

Google has again and again touted the value of their targeted marketing, but most of the fortune 500 ad dollars are not spent on targeted marketing. A couple weeks ago in a WebmasterWorld thread many advertisers complained about getting killed by another quality score update.

What quality score actually means probably comes down to one of two things

  • your site is a thin affiliate site or something else they once needed to fill a market niche but now is viewed as noise

  • you have not created enough organic value and/or have not yet spent enough money building your brand

Google Hates Most Affiliate Websites

Some key quotes from the WMW thread...these two show the trend against affiliate sites in general

Too many outgoing affiliate links and you are toasted

So on my basic two types of sites, when I send the visitor to another domain to buy, I'm getting severly penalized ( a new affiliate "penalty"), but if I have a another party's lead form on my domain, I didn't get hit.

and this one shows that the change is not a short term one

A Google Adwords customer service rep said that they do not systematically target affiliates as a whole, nor sites with affiliate links. But, she said they are taking more steps with each landing page tweak to weed out sites that do not add a certain level of "value" to their visitors (as other posters to this thread have mentioned). She wouldn't tell me if this "value" is human-determined or algo-determined, again saying that she didn't know.

If your site is not the type of site they would white-list in the organic results eventually they are going to look to dispose of your position in the ads as well. As soon as enough brand advertisers find your space you are no longer needed. Thanks for sharing the keyword data needed to tell the brands what to bid on, and best of luck getting traffic from somewhere else.

If you want to see where paid search quality filtering is headed, look at how the organic algorithms have changed. Nothing better to glimpse the future of PPC than to read the documents about how they expect humans to rate organic search results.

Expanding the Role of Brand Related Advertisements

In that same WMW thread Skibum posed the following question

Why attack long time advertisers regardless of their business model who are providing consumers with what they are looking for while using broad match to show more ads triggered by keywords they were not intended to run on?

I recently saw a Dollar rent a car ad at the #1 ad position for Forex, which is not a cheap keyword.

Google Expanded Broad Match Going too Far.

As the day passed Google's CTR numbers showed they expanded that ad out too far and they made that ad less broad. They can automate spreading out brand ads too far, and then pull them back if the relevancy scores are too poor.

When it comes down to it, it is all about money. As Google commoditizes everything that is not a brand they need to collect more money from brands. The reason Google is pushing video hard is because they want to lead that ad market. It is no suprise to see Google leading in innovation in the video ad field. There is no better way to create inventory than to get it from your already established near infinite traffic stream.

The Cadillac Escalade video ads are taking the place of the textual Ford Explorer ads. Google has no brand allegence. Whoever is willing to overpay for exposure right now can buy all they want from Google.

Even when Google can show relevant ads, they still prefer to show brand ads if they think they will pay more. Consider a Michigan counties page where Google shows the following ad links.
Relevant Google AdLinks.
Those are relevant. But what ads does Google also target to that page?

Google Car Donation Ad.
A lot of car donation charities are non-profit shells wrapped around dirty high margin auction houses (just look at the $20/clicks ad pricing).

Google Drug Related AdSense Ad.
A pharmaceutical ad from a company with a patent an a marketing budget larger than their research budget.

"The most startling fact about 2002 is that the combined profits for the ten drug companies in the Fortune 500 ($35.9 billion) were more than the profits for all the other 490 businesses put together ($33.7 billion)." - Marcia Angell

Given that ad targeting, it doesn't seem that Google is so pure, does it? One of the guys at WMW said the following

You guys are AdWords arbitrageurs. Although I'm sorry that your little gravy grain went off the rails, as a Google user, I can say good riddance to your garbage Web sites. Google, and users, want actual retailers to come up top in search results for sellers of a product, not parasite Web sites linking to actual retailers.

In a few years that same guy will probably be whining about how Google destroyed his business, but just like the other websites that died, Google doesn't care about him. What they want is decent relevancy WITH as much profit as legally possible. The more they cut out middle men the bigger they can make their chunk, even if doing so hurts relevancy and result diversity.

How do they get any more efficient than automating ad targeting while turning the text link into an unmarked ad unit? And they have patents for ad targeting based on how big of a risk taker you are:

"Examples of information that could be useful, particularly in massive multiplayer online RPGs, may be the specific dialogue entered by the users while chatting or interacting with other players/characters within the game. For example, the dialogue could indicate that the player is aggressive, profane, polite, literate, illiterate, influenced by current culture or subculture, etc. Also decisions made by the players may provide more information such as whether the player is a risk taker, risk averse, aggressive, passive, intelligent, follower, leader, etc. This information may be used and analyzed in order to help select and deliver more relevant ads to users."

How can anyone else compete in the ad market?

Published: June 18, 2007

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Comments

Ze Nic
June 23, 2007 - 4:27am

My guess would be that Google will keep the affilliates out there to pad the pockets, but for them to show anywere near the 1st-4th spots they will have to pay even more than they may be used to now.

I say more power to them.

Martin Edic
June 18, 2007 - 3:25pm

This is probably one of the most thought-provoking Google watcher posts I've seen lately. My contacts there (I work in an ad agency that spends a lot of $$ on Google for major brands) are extremely careful when you ask them about affiliates- I believe they have been specifically instructed not to talk about the entire business. This is a third rail subject because affiliates are big business for them and are very important to many of their brand advertisers (practically every major brand doing e-commerce has an affiliate program). The problem is the affiliates themselves (and I am one). The affiliate managers need to clean up their standards of what they will tolerate from affiliates- in many cases they have been happy to get the business without knowing what the affiliates are up to. Those days are over. If you are an affiliate gaming the system you should understand that you are dirtying your own water (to put it politely). If Google starts killing anything with affiliate links we are all going to be out of business. Read Aaron's book and clean up your act or you're going to put all of us out of business.

mhdoc
June 18, 2007 - 4:09pm

Makes Frank Schilling's advice to buy quality domains with typein traffic look better and better.

Dave L
June 19, 2007 - 4:07am

Really something how they give the domainers preferential positioning for their thin affiliate pages (claiming high CTR), and blow the others out of the water.

MRomeo
June 21, 2007 - 11:37pm

I don't know that Google killing affiliates is a very good idea, especially from their perspective. When on certain phrases for a specific product there are 40 people competing, mostly affiliates. Then what happens when Google penalizes the affiliates??

The affiliates drop out, competition goes down, and the ultimate product provider is the only one who is bidding, and now they are bidding .05 for a keyword that with affiliates might have fetched .50-3.00.

So, how can it make any sense for Google to weed out affiliates, when the tens of thousands of affiliates are padding their pockets? Competition is a good thing as far as Google should be concerned. Yes at times the affiliates site is crap, but such is life.

Maybe I just don't see it.

M

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