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Harvard Professor Claims Google Conversions Inflated

Pegs Chrome, affiliates as offenders

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Benjamin Edelman,  assistant professor at Harvard Business School, claims Google and partners are inflating PPC conversion rates and increasing advertiser cost via four specific channels, including Google’s own Chrome browser.

Google makes money by charging advertisers every time a user clicks on a Google advertisement, but in the instances described and documented by Edelman, he makes it appear Google and partners are colluding to intercept traffic to websites that would be navigated directly (and for free) rather than by searching.

Edelman’s claims, presented as they are, seem damning at first glance, but at times the connections seem tenuous and would carry a certain amount of deniability on Google’s part for they all involve third party actions, even if they benefit Google end. Google would not comment on third party/affiliate actions or motivations, so the links and proffered proofs are left to us (via Edelman) to consider. Google also declined to comment about the autocomplete feature on Chrome and whether it is designed to encourage search and discourage direct navigtion.

WhenU

Though in 2004 Google apparently banned WhenU.com from its index for cloaking, the domain has since returned, and the company appears to have forged an affiliate relationship with Google. Also known as WhenU Save/SaveNow, WhenU is advertising software that delivers ads, comparison shopping results, and tracks browsing habits, installed by the user in conjunction with other applications.

With WhenU installed, Edelman’s test exhibits a popup screen covering 80% of a webpage he directly navigated to internet access provider RCN. The popup features Google text ads, one of which is for RCN, the rest for competitors. Edelman suspects many users who’ve installed WhenU simply click on the sponsored search result to arrive at the originally intended destination, thus costing RCN for the click and appearing to be a legitimate conversion.

Edelman cites this as a prime example of Google and a partner interceding in the case of direct navigation in order to boost PPC revenue and give RCN the impression of a high conversion rate.

However, it’s possible, as in all of these examples, that the evidence is circumstantial. WhenU has a history of shady behavior and is still unofficially considered by many as malware or “badware.” It is possible Google is unaware of WhenU’s pop-up practices and that this is a tactic designed to benefit WhenU. Google itself wouldn’t comment on WhenU’s practices.

Google Chrome’s Omnibox

Google’s combination of address and search bar, known as Omnibox, made waves in the browser market with fans cheering the efficiency and critics expressing concern about data collected from it. Edelman enters "Expedia" as an example. Before the entire entry is complete, Chrome suggests outcomes for the user, three of which are searches, one of which is the URL for expedia.com, and a third suggestion, "expedia/," which leads to an error page.

Edelman argues direct navigation is discouraged by placing the intended URL at the third suggestion, after a search result and the suggestion that leads to an error page. “By placing this nonfunctional result prominently in the autocomplete drop-down, above the one working direct link to Expedia, and in the same distinctive green font as the working direct link, Chrome discourages users from exploring direct links,” writes Edelman. “After all, if the prominently-listed "expedia/" link did not work, users are less likely to try the similar-looking link Google ranked lower.”

Because Google designed Chrome this way, this is the most convincing example of Google encouring searching over direct navigation. But proving that motivation is a hard case to make because it involves ignoring all other motivations/ design intentions and requires knowledge of internal engineering directives to which we don’t have access (to which Google won’t grant access, either). 

Any determination of motivation on our part involves significant conjecture, and Edelman may have been a bit selective. The argument assumes the user really wants “expedia” and not “expedition” or “expletive” for that matter, and it ignores other stages appearing in the type field, like the “exp” and earlier stage, or other variations of the query/navigation. Google could and would argue the autocomplete feature is intended to get users to their destinations faster. But Google declined to comment other than to note using the "control" key moves suggested queries to the top of the list.

Typosquatting and SmileyCentral

People who register domains a letter or two different from a legitimate domain in order to catch typo traffic when users make a mistake typing a URL directly are called “typosquatters.” Typosquatters often make money via Google AdSense ads, which appear on the page that is not the intended destination rather than an error page, via Google AdSense for Domains. With Google’s matching technology, often the intended destination is featured in the ads, which users click to continue to where they meant to go. In essence, it is another instance where an advertiser pays for traffic it otherwise would have gotten for free if the user had typed correctly.

Edelman also pegs SmileyCentral, a toolbar provided by IAC, which owns Google’s search rival Ask.com, as a way a Google partner manipulates users into clicking sponsored ads by discouraging direct navigation. The toolbar modifies the users’ web browser by pushing the URL bar to the right instead of its traditional position on the left. A forgetful or unsuspecting user typing a domain in that bar will bring up a search with sponsored ads and may click through to the originally intended destination.

“Google’s actions are even worse than opacity: By claiming to have delivered traffic advertisers would have received anyway, Google tricks advertisers into paying for that traffic — and even tricks advertisers into concluding, mistakenly, that the traffic is a good deal.”

Google wouldn’t comment on how IAC designed its toolbar nor what IAC intended by switching the URL and search fields around. But as far as typosquatting goes, where most often squatters target trademarks, a Google AdSense for Domains spokesperson did manage to reiterate the company’s trademark policy:

"We take trademark violations very seriously. When we are made aware of trademarked terms on sites within the AdSense for Domains program we take immediate action including disallowing ad serving. Trademark owners can find more information here: http://www.google.com/tm_complaint_afd.html."

Third Parties

In all but the Chrome example, Edelman’s arguments hinge upon the actions of partners rather than Google’s direct involvement. While it’s true third party abuse of the system may inflate conversion rates, and that Google may indirectly encourage it, Google retains the ability to disavow actions taken by WhenU, IAC, and typosquatters. But it might be argued Google could be more careful with whom the company associates.

Edelman’s bio lists Google rival Microsoft among his clients. In a world of tenuous links, would that count?
 

Harvard Professor Claims Google Conversions Inflated
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  • http://www.lances-seo-tips.info SEO Tips

    Google did begin “smart pricing” which did lower the CPC for advertisers, and many publishers were hurt by the change.

    • Guest

      everything about Google is a scam, they have shell-game pages that lead to no where that anyone seriously looking for a product land on that absolutely waste time, it is these pages that are running up your click costs. Like one of the earlier replies, yahoo has a lesser tendency toward in your face scams. If you are selling products, how many scams do you get from gmail accounts versus yahoo, hot or?? 99%+ of the scams I get are from gmail accounts to the point we are open not responding, they are just a pur spam propagation scheme.

  • http://www.benedelman.org Ben Edelman

    Jason,

    Thanks for the link.

    Your piece seems to focus on what Google intended — what Google is aware of, what Google wanted to happen, what we can prove Google wanted, and so forth. That’s actually a little bit different from my core interest. Certainly I’d like to know what Google intended. But I’m *most* interested in whether advertisers can trust Google to provide the kind of clicks Google says it’s providing — whether advertisers can feel confident that when Google sends a “lead,” that’s a customer not already at (or already self-evidently specifically trying to reach) the advertiser’s site. To answer this question, it matters not one bit what Google intended. All that matters is what actually happens.

    In assessing what actually happens, my examples offer clear and compelling proof. RCN’s site gets covered up with its own sponsored links. A user who requests www.verizon.com in the top-left box on a computer with an IAC toolbar is taken to a page of ads for Verizon, not to the Verizon site. A user who misspells Comcast.com is taken to a page of ads, including ads promoting Comcast, rather than to the genuine Comcast page. There’s nothing “circumstantial” about that. What I show is what happens, plain and simple. Anyone who doesn’t want to take my word for it can examine the videos and screenshots I posted.

    To your characterization of my Chrome observations: I typed in the whole word “expedia”. At issue is not autocompltes like “expedition” or “expletive.” The question is: What should happen when a user types in e-x-p-e-d-i-a-enter? In Chrome, that key sequence yields a page of Google search results, with ads predictably front-and-center. That’s good for Google, but it’s not so good for Expedia, which is then likely to pay for a click when it could have gotten the traffic for free had Google not made search such a prominent default.

    One area where we absolutely agree: Google should be more careful who it associates with. Google’s reasons for care should be several. For one, Google puts its reputation on the line every time it partners with scammers and sleazebags. But more than that, Google is spending other companies’ money — in particular, spending advertisers’ money. If Google wastes advertisers’ money on placements that turn out to have been fraudulent, advertisers will be rightly up in arms.

    Ben Edelman

  • http://www.sclsports.com Soccer Jersey

    Because if you site is too big and traffic is busy enough. then you may not notice the manipulation. I guess.
    Regards,

  • http://www.madagency.com cats dogs animals

    I notcied the same thing too

  • Kevin

    Just another old fart that doesn’t know how the internet works? How can you call out how Google works when you probably don’t even know how email works?

    Google and or the internet will take over the world and there is no place for retards in hardvard having people listen to them simply because they are at hardvard.

    SkyNet will go live on July 14 2021 resistance is futile

  • http://www.worldwiderefinance.com nj mortgage

    I don’t know, true statistics DO show almost 68% of searchers choose Google willingly. I don’t know how true these claims really are. I think this professor may just be jealous or trying to get some attention.

  • JimMontana

    I came to click-throughs in 1998 after twenty years in advertising. From those early “Go To” days, through Overture, etc. I was able to see the ratio of my overall online orders for my products versus my outlay for “clicks”. I’m not a sophisticate by any means but when Google came along I began to have a nagging sense in my gut that all was not right with the system. The amounts Google charged each month versus the volume I was doing, cloaked in all kinds of spin about esoteric math, just did not feel right. It still doesn’t. I think it will be discovered to be a huge come-on, just the way we always felt weird about our MCI phone bills only to discover they were tweeking the system at the mothership to illegally create more sales. As an old advertising dog I’m going to watch this closely. I think this is a good time to short Google stock. Always follow your gut.

    • http://www.advansysusa.com Guest

      I agree with Jim, I also started back in the day’s of GoTo/Overture and had very productive results and felt I had much better control over my ad’s vs $. I have never seen the return on my investment come close with Google. There is something that is being missed behind the scenes that isn’t good.

  • http://phonesearch.org/ReverseNumbers Reverse#Search, Ltd

    We noticied the same. Guess we just need to do new keyword research & choose those more keywords.

  • Guest

    I really should pay more attention to whats on the screen. Today I saw two adverts provided by google. One was some scammy crackpottery inserted into an article that nothing at all to do with what I was reading, the other headlined “Google pays me $137 an hour – find out how” (or similar).

    I just laughed. But between Google and Ebay, “Sponsored Links” are proving to be more of a sad laugh at the kind of crap they expect people to click through on.

    I’m not at all surprised what they’d claim to be payable advertising. It’ll all fall in a heap if they lose the advertiser confidence.

  • http://www.freewebs.com/london-budget-accommodation G.M.C.

    From that information, I don’t think it’s possible for us to draw up any conclusions. However my experience is that Google Adwords Europe (based in Rpublic of Ireland) are one of the most cut-throat companies in any market today, with the most ridiculously expensive prices for the service and returns that you will find nearly. I certainly wouldn’t be surprised if the Harvard professor’s claims are true, and I hope to research his research further.

    No other business on the planet nearly has had prices inflated by so much over such a short time. People like myself who tried Adwords at one period through the vouchers they offered for trials, and then returned a year to 18 months afterwards got a vast, vast shock, without any expectation. A shock that entailed uncalculated thousands of pounds going from their bank accounts to a suddenly.

    I had thought the Google Adwords company were significantly expensive anyway in 2004, before the prices absolutely rocketed many manifold times. I could only conclude that big businesses only would be able to work with Google Adwords, that I hadn’t the first clue how small business were using Google and that it is a reasonably rewarding option (not great by virtue of return per cent paid) had suddenly become the very most expensive form of advertising on the planet. The very most expensive, with the exception of advertising on the biggest T.V. channels in terms of return per cent. Even T.V. advertising on small channels could be more rewarding, actually even cheaper for the price alone, than advertising with Google Adwords.

  • Zaphod

    Since I started PPC advertising for my clients 5 years ago, I have always suspected either intentionally inflated conversions or rampant click fraud with Google.

    Running my own tests I found that while advertising on Google there was very little change in traffic to my sites even while Google was reporting massive click-through. Advertising with Yahoo/Overture always showed traffic increased proportionately with reported click-through.

  • Fallada

    Speculations!!!!! Someone paid this guy, and paid him well. If anything is inflated, it’s interest rates by banks (and credit cards). Now, THAT is usery, indeed.

  • John

    Interesting article, but I think analytics might help to see how much of an issue this actually is. I’m also thinking that “dumb user” traffic may be more convertable, and that we should probably take that into consideration when looking at this issue.

    1) Even though end users may retype a misspelled domain, there’s no guarantee that they actually will. Giving them an easy path to an advertiser’s site is a valuable thing, especially for traffic that is obviously predisposed to convert easily. Keep in mind that most end users are not as smart as you and I, and they don’t necessarily do what you and I would do. Do you really want to lose that traffic because of a misspelled URL? I think most advertisers would rather pay for the click to get them to their site easily.

    2) I’m not an expert, but isn’t it pretty easy to see if someone “searching” for your web address is a real problem? Can’t you see what people that reach you are searching for by checking your site analytics? If people are reaching you by searching for your web address, that may be a problem, but I’d think we’d want to see what the numbers are before gettting up in arms over the issue. I’d also like to point out that less sophisticated end users that don’t know the difference between putting a URL in a browser vs a search box are probably going to convert well when you finally do get them to your site.

    3) Likewise, can’t you see where your traffic is coming from? If people are reaching you from searches originating from your own page, that may be a problem. That said, I’d be more interested in how prevalent this issue actually is before getting too gung ho about trashing Google as a source of traffic.

    My guess is that most of what’s been written here doesn’t amount to a lot of extra expense for advertisers. However, the only way to be sure is to actually track the numbers for your own site. Looking at the analytics of what’s being searched for and where it’s coming from should allow advertisers to better judge what the true results of their advertising is producing.

    I’m curious what our experts here have to say on that…

  • Guest

    We had a small start-up site and used both Google analytics and Google Adwords. It was amazing to see Google charge me for 165 click-throughts to my site, while for the same time period Google analytics only showed 43 visitors!
    I sent a message to support regarding this and only got boiler-plate replies. I tried twice to contact support to find out what was going on, but never got a response. We haven’t used them since.

  • Grider Lee

    I think they are too big, too important, too powerful and capable of anything.

  • Tom Greenberg

    It takes a lot of money to get great results from google. For big advertisers this sort of practice does not affect thier bottom line too much, but small advertisers will suffer a great deal, because all this inflation costs money they really dont have.

    I also have proof, that the past 100,000 clicks we recieved from goolge showed as less than 70,000 visits to our web site, from the log files. Our servers are never down, and we count uptime in months!

    And by the way, we complained to them for ages, without luck ofcourse, but one of those days, we seen a refund of few thousand dollars in the account, without explaination.

  • http://www.brain-waves-technology.com/ Brain Waves Technology

    Totally in agreement with Dr Benjamin Edelman.

    Come on if Google was to be trusted every click would have an IP address associated with the click so it could be cross-referenced with our server logs. Those that have nothing to hide, hide nothing!

    Time will reveal the truth about this company and what they really are. I can

  • Guest

    I wonder for years why nobody talked about this earlier. Is Google AdWords the ultimate cashcow and nobody is able to understand the background? Do we really think all these nice and often useless Google services are really for free? Ok, Google search really delivers the best results, but all the other garbage makes us virtual slaves!

  • Guest

    “What should happen when a user types in e-x-p-e-d-i-a-enter? In Chrome, that key sequence yields a page of Google search results, with ads predictably front-and-center.”

    This is unacceptable plain and simple. Step up G. At least comment on your white-hat-edness. Public trust is everything.

  • Guest

    YES- not only Google but Facebook inflates hits, also. I started a Facebook advertising campaign on 05/04/09, instantly received 10 hits which DID NOT register on my websites stats. Did not receive any additional hits in the next two days, canceled the campaign on 05/06/09.

  • Jack

    So for $20 a month and maybe you get a lead that pays or not, most likely you will get some signed up to your database but the bottom lin eis that it really helps in improving your keyword rankings with Google. The fact is that you will now increase your exposure with your generic keywords and allow a higher potential client base. It’s just one tool and $20 a month isn’t a bad marketing budget.

  • http://www.movie666.com/ Deke Thornton

    Excellent article. I think Edelmen’s examples are pretty cut and dry. Google must be aware of these kind of practices, but unless they are truly threatened with losing advertisers, why would they make it a priority to fight against something that brings them income and gives an inflated sense of the value of their product?

    On the other hand, while many publishers are out to game Google, many advertisers are working the opposite angle, in the sense that click-throughs and and conversions are not the only value of the ads for some advertisers. I help run a movie review site, and many of the ads that appear don’t require a click-through or conversion to be effective. Often the information in the ad alone serves the purposes of the advertiser to promote and brand the movie. A click through would be icing on the cake.

    From a publishers perspective, the entire Google model is a bit flawed. Publishers work hard crafting content to bring in traffic… just to send it away. Certainly there has to be a better system!

  • http://www.yourtrustedtradesmen.com Local Tradesmen

    Why would google want too, there is someone always going to throw stones at this goliath of search,the truth will out.

    Cheers
    Local Tradesmen

  • http://officialsafetyandsecurity.com/ Official Safety and Security

    I paused my Google PPC for my safety and security web site because I don’t really trust them. I have a small Yahoo PPC going on right now but I mainly spend my time and money on optimization and social marketing.

  • http://www.caoh.org Kelly

    Google and Yahoo PPC are simple pyramid schemes. And advertisers are the suckers. I say this and I have been using PPC since its inception

    • http://www.globalteamdirect.net Robert Easterling

      I could not agree more! I spend much time in business forums and chat rooms gathering a collective knowledge from a wide variety of online and brick and mortar business owners perspective on many topics. Any PPC program is and will be consistently abused by other dubious persons from around the globe who have found ways to help each other out in profiting from these abusive practices. Some far more bolder than others I have even witnessed posting their offers in these forums and chat rooms. I wouldn’t spend a dime on a PPC program personally.

  • Peter K. Lincker

    I don`t trust them too .

    • Guest

      we have very sophisticated software that tracks visitors to our site and referrers….and it goes without question that the click throughs that we are charged for versus what comes up on our software and even the Google tracking system are very different.

  • http://blog.texxsmith.com texxs

    The best is to just not to give google money, ever. PPC advertising is a scam and always has been.

    Less than 10% of searches result in a click on advert anyway. That means that almost 90% of the clicks go to the natural search results. Some go to the second page . . .

    Your PPC adverts are often too much of a temptation for your competitors.

    Good SEO is the best bet, always.

  • http://www.medlawplus.com jjray

    “It is possible Google is unaware of WhenU

    • http://www.royalessence.com/ rosewater

      I’d estimate that most Chrome users are more technically savvy than the average person and know the difference between.

      Irregardless, chrome is designed to nudge users to use google’s search engine. I think google should address these issues (which admittedly are a little subjective and hard to quantify) or else they’re going to start losing money.

  • http://www.webix.name/beep-pc Guest

    i never used PPC advertising,i think a lot of false clicks,counting mony for nothing…

  • http://www.kruse.co.uk/ BB for Kruse Internet Services

    There’s always been the cost of known click fraud to integrate into anyone’s business model but this new information perhaps makes that harder to absorb.

    BB

  • http://www.linkedin.com/in/elbrusconsulting David Patterson

    Autocomplete discourages people from ever using the “I’m feeling lucky” button. Google has always loved affiliates even though they are 3rd party’s. Affiliates often get busted for buying company names, misspellings of companies, or compete against the very products sold by the retailers. Affiliates always increase PPC cost for retailers and brands. Google is not interested in stopping this extra source of income.

    David Patterson
    Elbrus Consulting
    http://www.linkedin.com/in/elbrusconsulting

  • Guest

    I was one of them and it cost me 10,000 dollars before I realised that my money was going down the drain in clicks that my competitors and Google employees were having fun clicking on.

  • http://www.piecetabo.pl Guest

    We had the same situation on Polish market, so now we are thinking about legal steps.

  • http://www.vesta-tech.net Web Philippine

    I almost enlighten with this PPC business

  • http://www.hostmarket.eu Hosti

    I use independent statistic on my pages which gives me knowledge about visitors and I noticed that the results are better than from Google. First of all this statistics from google is not live. Their statistic shows that a lot of my pages are not visited at all (to encourage me to buy their ppc?). Also it does not show visits when customer uses another search engine to find my pages (does Google want to minimize their functionality?). And a lot more… For example search results of similar pages, promoted in the same way, differs.

  • http://www.melbourneonline.com.au/internet-marketing.asp Mark – Internet Marketing

    “Edelman

  • http://storecomp21.blogspot.com 90win09

    google is a grantor of the content, to provide relevant search results, made it easier for everyone to meberikan information. Yes I think google is now the best among the other

  • Webb Submit

    In my 13 years of SEO I have seen many practices for greed. One in particular is where click fraud is rampant. A university professor created a web site just for Adsense and provided a different list of keywords to different students. Instructions are to go to his site and type in each keyword one time then click on any of the three top Sponsored Links whereas Google pays the professor HALF of the click thru rate the Adwords customer paid for that click.

    Essentially untrackable by Google

  • http://www.south-africa-website-design.com Msi Mzantsi

    As far as I’m concerned, Google stopped long time ago living by its tagline, “Don’t be evil”.

    Can someone explain to me this:

    How come if a web page in one’s website is listed in the FIRST position for a particular Keyword Phrase on Google Search Results, when used as a LANDING PAGE on Adwords, it costs one an average of between $1.00 and $5.00 per click?

    This doesn’t make sense at all. Basically Google is saying for natural search your web page is CONTENT RICH and we give it NUMBER ONE on natural Searches, BUT when you use it as a landing page on Adwords, it has a POOR QUALITY SCORE (because us Google we are now making money out of you sucker!).

    Also anyone who has been using Adwords for sometime and suddenly stopped the campaigns know that their web site suddenly drops positions on Search Results. In other words, Google is using a “Bribe Approach” where they maintain or improve your Search Results position according to whether you are still running or not your Adwords campaigns!

    Obviously, they protest that there is no such a think – are we surprised?

    This is very clear if you have a website on the FIRST PAGE of Google Search Results for a particular Keyword Phrase.

    Actually my advice is this

  • http://www.natural-remedies-for-highbloodpressure.com Natural Remedies for High Blood Pressure

    Isn’t this just the cost of doing business? There’s always something shady going on when it comes to the internet. I think it’s just the nature of the beast. Look at Clickbank. There are constant complaints about their tracking system. Who really knows what’s going on behind the scenes?

  • http://www.spanishseo.org/ SEO Company

    Nothing new here. Big G’s practices are becoming more evident to mainstream users since their ad system is polluted and their push down for natural search results has become evident.

    At the end the “Do no evil” motto is no more than a marketing tactic. #FAIL!

  • http://www.earringsforever.com Earrings

    We cannot really prove either way since Google is the only one who knows what is really going on. Not much we can really do here but monitor and report through analytics.

  • http://www.motagg.com Robert

    I have stopped my PPC campaigns after six months. I agree the ROI is abyssmal but it works for placement. Is it better to go for impressions?

    The hype is hyperbole.

  • http://www.neutralsystems.com www.neutralsystems.com

    I have avoided PPC advertising because the click-through results are impossible to accurately validate. This is akin to shooting at bats in the dark. Not very efficient.

  • http://itassist.blogspot.com Cornel M

    gOOgle still steal money from peoples without any warn or motivation. Thanks God for existence of other companies.

  • Guest

    After my bad experience with google’s adware and adsense I have decided not to deal with anything that involves google in it ,no google search engine, no adware ,no adsence ,no google earth …ect.
    I washed my hands off anything googoly…

    Sam the man
    www.brooklyn-guide.com

  • http://www.discovery.uk.com Personal trainer

    I accept the point made above, that Google should be more careful of its associations, yet this will obviously become next to impossible as Google grows and has many more fingers in multiple pies. It’s developing assoiciations in an exponential fashion.

    PT

  • Guest

    I dumped Chrome today. I’ve used it for a year or two. I noticed lately that when you type in an address there is just no button to click to execute. It forces the search and it may not have your url. No entry button? I like to boss my browser around. How can I do that without direct entry? Chrome was quick but the king has no clothes. This is a pretty good example of a company getting cocky. At least for me , chrome was not to big to fire.