“Chinese Wall - The ethical (not physical) barrier between different divisions of a financial (or other) institution to avoid conflict of interest…” Investopedia.com

“While Google never sells better ranking in our search results, several other search engines combine pay-per-click or pay-for-inclusion results with their regular web search results.” Google’s Webmaster Help Center FAQ

“NO pay for inclusion, and a complete separation of the search index part from the money part.”  Google Chief Engineer Craig Neville-Manning, Search Engine Strategies 2004

The good people at Google have long maintained that there is a Chinese Wall between paid search results and organic results – that is, the department responsible for advertising is completely separate from the department responsible for organic search engine placement. The company insists that Google Adwords is a completely separate entity than the Google search engine, and never the twain shall meet. This all sounds very good, in theory. But do they live up to this ideal in practice?

You don’t hear Google talking much about Chinese Walls these days. This is certainly in part because they have had great difficulty gaining traction in the literal and very competitive Chinese market (headlines such as “Google Hits Chinese Wall” or even “Google Advance Halted at Great Wall of China” were commonplace). But might there be other, more nefarious reasons? Is there a reason why we hear less and less from Google about the virtual wall that separates paid search results from organic search engine placement?

  What Is Google Really Doing for Its Big Spenders?
It has long been rumored that Google will offer technical assistance in achieving better organic search engine placement to those who spend more for paid search results. I know for certain that these rumors are true in at least two instances. In fact, I actually have the minutes from one of these technical assistance meetings after the company met with Google engineers. While the identity of these two companies is irrelevant, suffice to say that they are companies that you have almost certainly heard of and that they spend millions of dollars on paid search words each year.

To be fair, based on the meeting minutes I have, the advice that the engineers gave to the company does not include anything groundbreaking. It is mostly common sense advice that a good search engine optimization firm already knows about organic search engine placement and other issues, and much of it is already covered in the publicly-available Google Webmaster Guidelines. This, however, is beside the point. Google has obviously decided that it must offer perks to its big paid search spenders to keep them happy (or rather, happy enough to not pull their advertising). Clearly, one of these perks is access to Google engineers and the ability to glean information about organic search engine placement, a luxury that smaller advertisers do not enjoy.

  Organic Search Engine Placement for Sale – The New Google Reality?
From a business perspective, this makes perfect sense, of course. Big-dollar advertisers make up the bulk of Google’s revenue for paid search, and any intelligent business will take whatever steps they deem necessary to hold on to their most valuable customers. This is why larger advertisers already have a designated account representative from Google. I am willing to bet that this perk was not Google’s idea. Rather, it almost certainly stemmed from the sense of entitlement that those spending large sums on paid search felt and the fact that technical help with their organic search engine placement is what they demanded.

Unfortunately, this reality leaves an advertiser with a small budget for paid search at a disadvantage. If Google is willing to offer this secret perk to larger advertisers now, what might they do in the future? Offer price breaks to larger paid search spenders? Increase the minimum monthly spend to squeeze out smaller companies and please the larger ones? It certainly has the potential to become a slippery slope, and I am interested to see where it goes next.

One final point – since Google is willing to give advice about organic search engine placement to companies that spend a great deal of money on Google advertising, is the phrase “While Google never sells better ranking in our search results…” truly accurate? I suppose this is open for interpretation. It may be technically true, but offering advice regarding organic search engine placement straight from the horse’s mouth in exchange for millions of dollars in money for paid search results isn’t far from selling rankings, in my opinion. 

  Conclusion
Please don’t get me wrong – I still believe that Google is the best search engine out there, I greatly admire the way that they are continually reinventing themselves, and I think they are still the target for those seeking the most benefit from organic search engine placement. They have the folks in Redmond constantly guessing and always three steps behind, and I love how they have started from humble beginnings to take on one of the biggest corporations in the world (and consistently win). I simply believe that they have played the underdog, anti-corporate card for too long, and that even if it has not outlived its usefulness, it has outlived its truthfulness. Google is now a huge multinational corporation that answers to its shareholders. To pretend anything otherwise is silly, but it seems that, for now at least, the charade will continue.

Google’s overriding principle, one that they have been happy to espouse to the media, has long been “Don’t Be Evil.” Whether they still adhere to this principle since they have become a public company is another question that is open for interpretation. If you are a smaller advertiser and feel that Google’s favoritism toward larger paid search customers regarding organic search engine placement is evil, it probably seems as though the “Don’t Be Evil” principle no longer applies. You may conclude that the principles of “Don’t Be Evil” and “Keep Shareholders Happy” are mutually incompatible, and that the latter has gained the upper hand.

By Scott Buresh
Scott Buresh is the CEO of Medium Blue, which was recently named the number one search engine optimization company in the world by PromotionWorld. Scott has contributed content to many publications including Building Your Business with Google For Dummies (Wiley, 2004), MarketingProfs, ZDNet, Organic Rankings, WebProNews, DarwinMag, SiteProNews, ISEDB.com, and Search Engine Guide. Medium Blue serves local and national clients, including Boston Scientific, DS Waters, and Wake Forest University Baptist Medical Center. Download Medium Blue’s latest exclusive whitepaper, “Adding Search to Your Marketing Mix,” for more insight.

The controversy surrounding click fraud comes up every year, but it reached a fever pitch during December’s Search Engine Strategies conference in Chicago when participants voiced concerns over experiencing fraudulent click rates ranging from 20 to 40 percent, threatening the entire paid search industry.

At the time, Google’s Business Product Manager for Trust and Safety Shuman Ghosemajumder tried to calm advertisers’ fears explaining that Google was currently “…examining ways to make its fraud-fighting efforts more transparent without revealing crucial information that might help swindlers elude detection.” Ghosemajumder did, however, express concerns over revealing too much information, fearful it would give away algorithm secrets to competitors.

Paid Search Revenues Continue to Rise
While the major search providers have always insisted the click fraud rate is a gross overestimation, a 2005 Outsell survey found that click fraud was a $1.3 billion problem for publishers. At the time, many advertiser respondents (27 percent) said they planned to cut back and/or eliminate paid search campaigns in 2006.

Outsell respondents may have intended to cut down on paid search, but they certainly didn’t follow through. SEMPO’s year-end search marketing report showed that North American advertisers spent $8 billion on paid placement programs in 2006, amounting to 86 percent of 2006’s total search spend ($9.4 billion). Seventy-one percent of SEMPO respondents said they used paid search campaigns, illustrating that there were not many defectors.

Despite advertisers’ insistent claims that the search engines don’t do enough to eliminate click fraud, paid search revenues continue to fill the coffers of Google, Yahoo, Microsoft and many second and third tier search engines. Additionally, there is a huge gap in the professed prevalence of click fraud between the search providers and the advertisers and click fraud advocates.

Google Click Fraud Estimate
The rate of click fraud changes depending on whose numbers you believe. Click fraud detection agencies put the click fraud rate hovering around 14 percent, while others believe at least 20 percent of all clicks are fraudulent.

Late last month, Google issued a statement on the Inside AdWords blog that insisted invalid clicks consistently remain under 10, typically in the single-digits, and that virtually all malicious activity is found by Google’s filter. Ghosemajumder claimed the percentage of clicks found by advertiser-initiated investigations account for just .02 percent of clicks. All other accounts, he said, are grossly overestimated.

Alchemist Media President Jessie Stricchiola takes issue with Google’s assertion that it refunds advertisers promptly for fraudulent clicks, stating that “Google has been the most stubborn and the least willing to cooperate with advertisers”.

Google Click Fraud Filters
In February, Google outlined the three-layer filtration process it uses to combat and eliminate click fraud. They described the system which uses both proactive and reactive filters as follows:

1. Proactive Filters: Automated algorithms analyze and filter out invalid clicks in real-time without billing advertisers for these false clicks. This accounts for the vast majority of invalid click detection.

2. Proactive Offline Analysis: Post billing, Google uses automated and manual analysis to identify fraudulent clicks that somehow made it through the first layer of filtration. Special attention is paid to clicks occurring on the AdSense network. This is done pro-actively and without any involvement from advertisers. When false clicks are found, advertisers’ accounts are immediately credited via Click Quality Adjustments.

3. Reactive Investigations: Investigations take place when an advertiser approaches Google concerned about suspicious activity on their account. Each complaint is investigated, though Google says refunds are relatively rare. Google claims that the vast majority of fraudulent clicks, more than 99 percent, are found and thrown out within the first two stages of filtration. The third stage only includes the .02 percent of clicks where advertisers are affected by undetected cases of click fraud.

Click Fraud Detection Agency Estimates

In April 2006, The Click Fraud Index reported an industry-wide average click fraud rate of 13.7 percent. The click fraud rate was broken down as follows:

• Tier 1 searchproviders — 12.1 percent
• Tier 2 search providers — 21.3 percent
• Tier 3 search providers — 29.8 percent

Some of the newer click fraud prevention firms like Click Assurance and ClickLab offer algorithm-based programs to limit bad clicks. These programs estimate the statistical likelihood of a click being fraudulent based on behavioral variables and IP address.

Gap in Prevalence of Click Fraud
As noted above, Google admits to a < 10 percent click fraud rate, while advertisers and click fraud detection agencies believe it is more like 14 to 20 percent. Ghosemajumder explained this gap saying that many advertisers and click fraud detection agencies are looking at the wrong signals, mistakenly classifying valid clicks as fraudulent. Additionally, he believes many advertisers request refunds for clicks already thrown out during the first two layers of the filtration system.

For example, misclassification might occur when counting reloads of an advertiser’s landing page. Say the customer clicks through to the landing page, views a product page, and then hits the back button, returning to the same landing page. Without proper tagging, that one click and five page re-loads could be misclassified as 6 clicks from the same visitor. Google argues that there are hundreds of different signals that must be monitored to detect click fraud, signals that are a closely guarded company secret and known only to the Google click quality team.

By Nick Guastella

Near the end of 2006 Yahoo officially unveiled the new back end for Yahoo Marketing Solutions, widely referred to as the ‘Panama’ Update. Since then they have been slowly allowing the upgrading of accounts from the old into the new system. While not everyone has had a chance to have their accounts switched over, it is expected that all will be upgraded by the end of this quarter.

After several months of waiting, this new backend is a welcomed change as Yahoo finally moves into the future but as with any new system, it is not without its pros and cons.

New System Pros
The new system is certainly a great improvement over the old. While adjusting to a new interface and ranking algorithm may take a little time for advertisers, the end result will present more relevant ads to the searchers, which will ultimately mean a higher quality of visitor and should provide a better bang for one’s buck.

• Previously you were stuck with only one live ad for any given phrase; now you can create multiple ads for a given ad group. With the ability to have multiple ads for each phrase opens the doors to easier testing of which ad copy is better suited for your ads and prospective clients.
• Ad approval is now instant for most ads and keywords. While there is still a “pending approval” process for some sets of phrases, in many cases your ad changes and keyword additions are now instant. No longer do advertisers have to wait a number of days for their ads to go live.
• With the old system, the level of geographic targeting was very limited. Under the new Yahoo Panama the options are much more sophisticated. For example, there is an option for blocking entire continents for your ad campaigns. Rather than selecting each continent/country you want to appear in, if you are only trying to avoid one specific region, you can easily block it from your campaign.
• The geo targeting options have also expanded to allow for more specific ad targeting. Advertisers now have the ability to target specific states and provinces – a feature previously unavailable. Canadian advertisers were forced to advertise to the US even though they wanted ads only to appear for the Canadian market. This update now provides the option to target Canada only – a big plus for any advertisers who are only able to sell in the Canadian marketplace.

New System Cons
There are a few negative aspects that have been widely noted in many forums and by Yahoo advertisers. As with any new design and back end, it is expected that there will be some wrinkles. Most of the problems are relatively minor, and for advertisers on top of their campaigns, these should not present any major issues.

• One of the downsides most discussed is the transfer of account stats from the old system to the new. Once your account has been transferred, the new system will not log any of the old system historical data. While this information is still accessible by logging into the old interface (which is made read only), it would certainly make more sense if stats were available under the new account login.
• Another issue is campaign tracking. After the switch has been made, as long as you do not change any tracking settings everything should continue to work as normal; once you adjust the analytics or tracking options, you will need to replace your tracking code with a new piece of code provided by Yahoo. There have been reports where after the account is upgraded, the conversion stats no longer appear and the code needs to be immediately replaced. While not everyone seems to be having this problem, it is certainly a bug worth noting. If you have not yet upgraded, or upgraded but not checked your tracking codes, it would be best to tackle this issue right away to ensure everything will work correctly.
• There have been some reports that after the account transition some ad titles, descriptions, and even keywords, have been disrupted. Upon upgrading your account be sure to check all your ad copy and phrases to ensure that they are still correct or you could end up spending money on incorrect phrases, or damaged ad copy.
   

The system is certainly not without its flaws, but generally the interface is much cleaner and certainly more functional. While the ability to edit many more aspects of one’s account are now in place, it can be a little daunting to find the right place to make the change. Some items such as campaign and ad group settings are more difficult to find than they need to be, and require more steps than is really necessary. As an example, below I compare the steps required for the simple task of renaming a campaign for Yahoo versus Google:

Yahoo:
1. Log into your account. You will be presented with your account dashboard.
2. Click on the name of the campaign you wish to change
3. Click on “Edit Campaign” in the top right.
4. Click “Edit” at the top right of the “Campaign General Information” box.
5. Change the account name.
6. Click “Save Changes”.
7. Then click “Dashboard” to return to where you were.

Google AdWords:
1. Log into your account. You will be presented with the “All campaigns” view.
2. Click the checkbox beside the campaign you wish to rename and click “Edit Campaign”.
3. Enter a new campaign name.
4. Click “Save Changes” (also brings you back to where you were).

Why is it that Yahoo takes 7 steps to do something that Google can do in only 4? Not to mention multiple campaigns edits. If for some reason you wanted to rename all your Google campaigns at once, it would still take only 3 main steps plus 1 step for each campaign name changed. For Yahoo you would need to repeat all 7 steps for each campaign. These same basic steps are also required for other edits such as campaign budgets, start and end dates, and to turn a campaign on or off.

This example is not really a big deal in the large scheme of things, but is simply an indication that while Panama is a large improvement, there is still much room for refinement. As Yahoo moves forward into 2007 I am sure we will see more advancements and changes to the main navigation.

Click Through Rate Increased by New Ranking Algorithm
Along with an entirely new backend system loaded with new features, Yahoo has also adjusted the way in which they rank ads. The new ranking algorithm is very reminiscent of Google AdWords, and miles away from the old bid-for-position model previously used. Under the old algorithm an advertiser could dominate the top ranking simply by having deeper pockets. Now under the new Panama algorithm to guarantee top spot for a competitive phrase, not only may you still need deep pockets, but you also need the right phrases, relevant ad text, and a quality website – giving an opportunity for top rankings to those with smaller budgets.

According to comScore there has been a significant increase in the overall click through rate of Yahoo paid ads since the introduction of the new ranking algorithm. Compared to the week ending February 4, the last day of the old system, the week ending February 11 saw a 5% increase in clicks. By February 18th the total increase in clicks was reportedly at the 9% mark; a sign that the new system is of significant value to advertisers, and of course Yahoo. Now these figures may have been skewed slightly with both Valentines Day and Presidents Day falling into that range, however, “Bank of America analyst Brian Pitz said in a research note that he expects click through rates to grow about 15 percent to 25 percent starting in the second half of the year.”

What has been specifically responsibly for the increase in traffic? While it may be too early to know for sure, the most likely reasoning is ad quality. Under the old ranking schematic it didn’t matter what your ad looked like or where you directed traffic, if you had the dollars, you had the rank. Now that there are other factors at work, the most relevant, high quality ads, take the rank, and searchers are obviously noticing the increased relevance and clicking through.

Scott’s Personal Take on the New System
Generally I have to say I like the new system. It makes account management easier than using the archaic system we had all grown used to. The new system is much more streamlined and clean cut compared to the old. That said, when compared to Google AdWords, it still falls short. It’s a great first try, and within the next year or so I expect to see some more adjustments to make navigation and functionality improved. For a system with so much hype and such a long time coming, it seems less desirable than expected. Editing ad copy and URL’s is still much more cumbersome than its competitor Google, requiring more steps. The account transition could have been made smoother and items such as historic stats should have been made more easily accessible and transferred over to the new account.

Since its early days the Google AdWords system has evolved a great deal, and the same can be expected from Yahoo. Now that they have implemented a more scalable and comprehensive system, it will certainly improve as advertiser feedback is received. One irrelevant feature, if you can call it that, is that I am very grateful for the removal of the “security code” requirement when signing into the account. While I can appreciate the reasons for having it there in the first place, these security codes that were popping up everywhere really did drive me crazy, and it is nice to see this condition being removed. What does it mean to an advertisers account? Well, really nothing, but it does put a small smile on my face.

While it is not without its shortcomings, this new system is a large improvement and I for one welcome it with open arms.

By Scott Van Achte