Google (NSDQ: GOOG) and its partners are turning traffic that advertisers would have received for free into paid traffic and collecting the proceeds, claims Benjamin Edelman, an assistant professor at Harvard Business School, in a report.
"Google and its partners systematically inflate advertisers' conversion rates by interceding in transactions advertisers would otherwise have received for free," Edelman's report states. "This conversion-inflation syndication fraud overstates the true effectiveness of the ads Google delivers -- leading advertisers to pay more than they should."
Google's Chrome browser appears to be designed to encourage users to search -- for which Google may be paid -- rather than navigate directly.
Edelman observes that when a user starts to type the Web address "expedia.com" in Chrome's "Omnibox," which combines the URL address entry field with a search box, Chrome provides an auto-complete suggestion while the user is typing. If the suggestion is accepted, Chrome submits "expedia" for a Google search. This effectively terminates the user's attempt to complete the Web address "expedia.com" and involves Google in navigation unnecessarily.
In order to navigate directly to Expedia (NSDQ: EXPE)'s Web site without conducting a Google search, users must ignore the Google Chrome suggestion and type out the complete URL.
"y pushing default behavior from direct navigation to search, Google makes searches that much more frequent -- yielding that many more ad-clicks, that much more revenue to Google, and that much more expense for advertisers," the report says.
Other browsers behave similarly. Entering an unrecognized term in the Firefox address bar leads to a Google search for the term -- regardless of whether another search engine is selected in the browser search box -- rather than for the error page that's normally returned following an improperly formatted URL. Microsoft (NSDQ: MSFT)'s Internet Explorer 8 does the same thing, though it replaces the error page with a search page generated by the user's chosen search engine, if the Windows Live Search default has been replaced with a different search engine.
Google and others have justified their decision to override error pages as a way to improve the user experience.
Edelman notes that other browsers behave similarly to Chrome, but he insists that Chrome is pushier at encouraging searches in lieu of direct navigation. He's also critical of Chrome for including nonfunctional results in the list of links generated through auto-completion. The inclusion of these nonworking links, he claims, discourages users from exploring direct links.
Mark Simon, VP of industry relations at search marketing company Didit, observes that Google and other search engines straddle a difficult fence. "On the one hand, their business depends on providing universal access to information and collecting revenue along the way," he said in an e-mail. "On the other hand, it isn't helpful when the engines and their networks insert themselves -- or are inserted -- into the equation unnecessarily. In a system as complicated as a huge ad network, inefficiencies will always arise. The lesson for advertisers is to find a partner capable of compensating for those inefficiencies and providing the means to pull ahead."
Edelman's report is also critical of Google's willingness to profit from typosquatting and of its acceptance of the dubious advertising practices of WhenU and IAC.
Edelman estimates that more than 75% of typosquatting sites that show pay-per-click ads are monetized through Google. By supporting typosquatting, Google again interposes itself in the navigation processes and creates an opportunity to be paid where one wouldn't ordinarily exist.
"Had it not been for the typosquatter, the user would have received a standard browser page identifying the typo and, in general, referring the user to the requested site without charge," the report states.
With regard to WhenU, Edelman's complaint is similar: He claims that WhenU and partners use pop-up ads to charge advertisers for traffic from visitors already on advertisers' sites and that Google passes these clicks through its ad platform as if they were legitimate leads. He says that IAC's SmileyCentral toolbars, with support from Google, also charge advertisers for traffic they would otherwise have received for free.
Google, uncharacteristically, did not respond to a request for comment.
Source: Google Defrauds Advertisers, Report Claims -- Search Advertising -- InformationWeek
"Google and its partners systematically inflate advertisers' conversion rates by interceding in transactions advertisers would otherwise have received for free," Edelman's report states. "This conversion-inflation syndication fraud overstates the true effectiveness of the ads Google delivers -- leading advertisers to pay more than they should."
Google's Chrome browser appears to be designed to encourage users to search -- for which Google may be paid -- rather than navigate directly.
Edelman observes that when a user starts to type the Web address "expedia.com" in Chrome's "Omnibox," which combines the URL address entry field with a search box, Chrome provides an auto-complete suggestion while the user is typing. If the suggestion is accepted, Chrome submits "expedia" for a Google search. This effectively terminates the user's attempt to complete the Web address "expedia.com" and involves Google in navigation unnecessarily.
In order to navigate directly to Expedia (NSDQ: EXPE)'s Web site without conducting a Google search, users must ignore the Google Chrome suggestion and type out the complete URL.
"y pushing default behavior from direct navigation to search, Google makes searches that much more frequent -- yielding that many more ad-clicks, that much more revenue to Google, and that much more expense for advertisers," the report says.
Other browsers behave similarly. Entering an unrecognized term in the Firefox address bar leads to a Google search for the term -- regardless of whether another search engine is selected in the browser search box -- rather than for the error page that's normally returned following an improperly formatted URL. Microsoft (NSDQ: MSFT)'s Internet Explorer 8 does the same thing, though it replaces the error page with a search page generated by the user's chosen search engine, if the Windows Live Search default has been replaced with a different search engine.
Google and others have justified their decision to override error pages as a way to improve the user experience.
Edelman notes that other browsers behave similarly to Chrome, but he insists that Chrome is pushier at encouraging searches in lieu of direct navigation. He's also critical of Chrome for including nonfunctional results in the list of links generated through auto-completion. The inclusion of these nonworking links, he claims, discourages users from exploring direct links.
Mark Simon, VP of industry relations at search marketing company Didit, observes that Google and other search engines straddle a difficult fence. "On the one hand, their business depends on providing universal access to information and collecting revenue along the way," he said in an e-mail. "On the other hand, it isn't helpful when the engines and their networks insert themselves -- or are inserted -- into the equation unnecessarily. In a system as complicated as a huge ad network, inefficiencies will always arise. The lesson for advertisers is to find a partner capable of compensating for those inefficiencies and providing the means to pull ahead."
Edelman's report is also critical of Google's willingness to profit from typosquatting and of its acceptance of the dubious advertising practices of WhenU and IAC.
Edelman estimates that more than 75% of typosquatting sites that show pay-per-click ads are monetized through Google. By supporting typosquatting, Google again interposes itself in the navigation processes and creates an opportunity to be paid where one wouldn't ordinarily exist.
"Had it not been for the typosquatter, the user would have received a standard browser page identifying the typo and, in general, referring the user to the requested site without charge," the report states.
With regard to WhenU, Edelman's complaint is similar: He claims that WhenU and partners use pop-up ads to charge advertisers for traffic from visitors already on advertisers' sites and that Google passes these clicks through its ad platform as if they were legitimate leads. He says that IAC's SmileyCentral toolbars, with support from Google, also charge advertisers for traffic they would otherwise have received for free.
Google, uncharacteristically, did not respond to a request for comment.
Source: Google Defrauds Advertisers, Report Claims -- Search Advertising -- InformationWeek
