Well, I’m a year late finding this PDF about Click Fraud, ROI and Advertiser Response by Kourosh Gharachorloo of Google. I was doing a periodic scan to see if anyone else has published how to interpret the autotagged gclid in AdWords. It’s nice to see that my old article anticipated many of the arguments – though this is a better paper than my old article in some important ways. More diagrams. Fewer words.
Weaknesses in the paper
There are a few embedded misperceptions in the “AdFraud Anecdotes” PDF.
I’ll probably add to this list as I think more about it.
- Advertisers do not react rationally. That’s partially a consequence of information holding asymmetry.
- Google controls Broad Match and Auction Quorum Sizes to improve Google’s returns – and hides the crap search queries in reports as “18,0000 other unique searches”
- Google is in complete control of the quality of matching, by default. Google controls click quality, advertisers choose bids and can forgo volume by selecting phrase match and exact match, or accept Google’s decisions about matching. Most of the variation in CPA & ROI that I find can be directly attributed to Google changing the nature of search queries that are being matched.
- Advertisers are remarkably reluctant to measure – because for a small business the costs of developing the understanding of measurement is expensive; so is hiring in the talent to understand the data. I infer that small businesses have a higher percentage of undetected and undetectable click fraud and greater difficulty in establishing a “useful for management purposes” CPA (internet noise makes data collection long period – I may write up the details of this).
- The paper addresses large advertisers quite well. Typical of economists and governments – but single large entities are *not* representative of the larger numbers of smaller businesses – scale changes impact.
Strengths of the paper
This shows that some people within Google are clearly understanding the role that Google has.
It is interesting that the thinking and insights exposed in this paper *haven’t* percolated to the AdWords Sales Teams, at least in the UK. I’ve recently had a rather unsatisfactory meeting with a major account team, who said that Google has no insight into conversion… Despite our mutual client having AdWords Conversion Tracking enabled for several years. If ROI was important to Google, you’d have thought they’d have noticed, and been rather more interested in how recent change have affected ROI. Wouldn’t you? Instead, I got the usual lecture about increasing spend… instead of them giving me techniques to manage AdWords to improve ROI in the face of Google’s efforts to undermine that. I may write about that more, when I can work out how to disentangle any explanation from any specific clients’ data.
The PDF provides some rather Delphic oracular premonitions of the recent user interface changes, for example, separating metrics between Google Search and the Search Partners and the Content Network; allowing (some) control over domain parks, 404 page advertising, etc. Careful reading is required and may be rewarded.
I may make some predictions about likely further AdWords UI changes, when I’ve had a bit more of a think… Frankly, stumbling on this has been a bit of a shock…
