GoTo and the PPC Model

[ihelpyou]

This is a great thread! Ross and Napoleon have pointed out the some of the many ways PPC can be fraudulant and hard to detect.

http://www.webmasterworld.com/forum33/571.htm

Please read carefully and read the final outcome. Important for all PPC advertisers to know and to be aware of. It could and does happen.

[MsSearch]

This sounds similar to something that was happening with Searchfuel.com and some other search engines that used GoTo, Findwhat and other PPC results...this happened a while ago...

The industry is full of scammers!! :eek: Anyone trying to make a quick buck!

This is why I avoid the PPC's...not because I don't trust them (GoTo, Findwhat, etc..)...I don't trust some of their partners/affiliates....

[ihelpyou]

Yep. You are right. The model is fraud filled with no real good way to stop it. I know regular SEO is filled with scam as well but with it, all you have to do is research one company real well before signing with them. With PPC, you have to constantly watch where all your clicks are coming from and watch many different sites and affiliates. Too much hassle for my tastes.

[MsSearch]

yup...too time-consuming for me....

[bobking]

Is anyone familiar with the term pay-per-day? I would be very curious to know your thoughts on the topic.

I went with it because as far as I can see, it is fraud proof.We've been doing it now for about 4 months and while it's not setting the world on fire, we have not had a single complaint of any type of fraud. John of hyperseek fame, is just about ready to release a new engine built around the pay-per-day concept.

Do you feel that this will address some of the issues the PPC engines are dealing with? Will it take off? Will it do anything to eliminate fraud?

Inquiring minds want to know.

[JuniorHarris]

>With PPC, you have to constantly watch where all your clicks are coming from and watch many different sites and affiliates.

That is one of the problems with the model, unless one is very technically adept at tracking these things down, most would not even know! And since pay-per-play only requires money and no technical expertise, it could be very easy for many of them to be duped and not even know it. Would be like the wife taking the car down to the local shade-tree mechanic...

[highman]

>shade-tree mechanic...

You leave us mechanics alone.... there are only a few of us shady ;)

Pay-per-Day sounds interesting, sort of Yahoo! with a ranking option?
I presume you could pay for a year up front?
Dearer prices for more poopular searches?

Worth looking into..... me thinks

[JuniorHarris]

Whoops, sorry about that!~ Such a shame that it only takes a few to give the whole lot a bad name. Just as the engine spammers do to legitimate SEOs.

Yes, would be interesting in hearing more about the pay-per-day...though it seems as if everyone has their hands out now days!~

[RDPorter]

Pay-Per-Day sounds most interesting BobKing, as an expression and also a model.

A Solzhenitsyn expression well suited to the Internet!

Without losing my existing merchants and wiithout compromising that which they`d already purchased it would have to still be a ranked site listing, according to either price paid, alexa visits, se hits, popularity, internal popularity, site quality etc.

I`m now looking into adding additional parameters for list rankings, not only keyword bid purchased for my script run (honest) and dmoz cached (external results - honest again!) PPC Search Engines.

I`d like members thoughts on which other parameters added might make my PPC search engines more desireable an avenue for advertisers.

WDYThink?

[bobking]

We decided to go with pay-per-day, even though we knew there was not even a market for it, because we spent a lot of time trying, but finally had to admit that there is no such thing as fraud protection when it comes to PPC. There is only the "perception" of providing fraud protection. There are just too many variables to be able to control them all without having to have humans review every click and even then it isn't perfect. Fraud protection for PPC is kind of like the old saying that locks on doors are to keep the honest people out.

So, even though we knew that the income potential would not be as great due to having to educate the market on what pay-per-day even was, we also could see that the expense of disputed clicks, reviewing, constantly having to deal with updating software to combat scripts to steal clicks, and most importantly, having to tell advertisers directly that we couldn't guarantee that the clicks were not bogus and then having to issue refunds, (not to mention dealing with chargebacks), we just felt confident that in the long term, pay-per-day made more sense.

The bidding for placement works the same, the highest bid gets the highest placement, but there is absolutely no way that an advertiser will ever pay one cent for any bogus click. With pay-per-day, if your competitor wants to waste their time clicking on your link, or if a thousand affiliates want to install scripts to steal your clicks, far out! It doesn't make the thief a dime and it doesn't cost the advertiser a dime.

In theory at least, this should reduce our expense in offering and maintaining the ad network which enables us to offer lower priced entry points to gain more advertisers and then from there, let the market decide the value. It just seems more fair to me.

Of course we're not big enough yet to send "Goto" traffic to anyone yet and traffic is all that seems to matter at this point, however, it does seem to be changing. We're all seeing the focus of discussions changing in public marketing forums from hits to sales. I personally believe that as this trend continues, ROI and conversions are going to be the motivators and not hits. When that becomes common knowledge, now every click is going to need to be held accountable and I just don't see PPC being able to offer that kind of accountablility. At least not in the near future and not without costing someone a lot of time and money.

I've been wrong plenty of times before though.

[Alan Perkins]

Bob

Pay per day (or any other period, from second upwards :) ) sounds a great idea. I'm sure Overture will be taking note right now...although they may have trouble working out how to pay their partners and affiliates. Great from an advertiser's perspective, though. :)

I think there is a market, but your biggest problem is that you are an innovator. So, before you can even get to marketing, you have to wade through evangelising.

[bobking]

Good point. I was just watching a show on TV's History channel last night about patents and I got a real kick out of the Alexander Graham Bell story. He almost never got the phone to become a reality becuase his financial backer almost pulled the plug because he couldn't see why anyone would want to talk into a little box and be heard over a bunch of wires.

The last story was about the guy who is credited for developing the internet back in '69 and again, couldn't get any funding because no one could see the point in having it in the first place.

I don't mind being called an innovator, (I've been called a lot worse:) and I don't mind evangelising. I appreciate the opportunity to be able to have a place to discuss innovative topics without the pressure of marketing.

We as an industry have the rare opportunity to not only be a part of coming innovations, but to create them. I find that very exciting. There can be little doubt that the net is changing just about minute by minute and we, of all other professions on the net, have an insight into those changes that put us ahead of the game.

I sincerely appreciate your tolerance of my "preaching" sometimes. I really don't mean to come off that way, I just really enjoy what I'm doing with my life right now and my involvement with the web. I admit, I have a tendency to become passionate about some things and that takes me a little overboard at times.

As far as Overture taking note, god, I hope so. That would come under the heading of marketing!

Since you brought it up Alan, you're the first person I've spoken to about PPD that noticed right off the bat the problem with paying affiliates based on a time for placement method. We've been struggling with this for a while and that's the main thing missing from getting PPD to become widely used and accepted. Any ideas ?

[ihelpyou]

As far as affiliates, why not simply pay a one-time commission per advertiser they bring in? It could be a set fee based on a certain amount of time.

Same thing could be done with a partner, only a little bit differently. Seems that something should be able to be worked out.

[ihelpyou]

Or, if you have affiliates who are simply displaying your search results on their pages, why not pay them based on how many total searches are made from their site in a month? or something like that.




just throwing stuff out there... don't mind me if I shoot off my mouth too much. :D I really have no clue, actually.

[Alan Perkins]

Well, Bob, you've turned the PPC model on its head so you need to turn the payment model on its head too.

Off the top of my head, how about this. For each keyword bought, measured across one day:

R = revenue for that keyword that day
A = all affiliates percentage of Revenue (the rest goes to Bob & taxes)
P = percentage of searches for that keyword attributed to one affiliate

then affiliate revenue per keyword per day = R*A*P

Sum that over all keywords, on a daily basis, and that seems about right.

e.g. 100 advertisers buy "search engine optimization", each paying $5 per day. Total revenue per day for that keyword = R = $500. Let's say affiliates percentage of revenue = A = 50%. So $250 is available to share between all affiliates for that keyword. Affiliate "friend" generates 5% of all traffic for that keyword = P. So "friend" gets 5% of $250 = $12.50 just for the traffic "friend" generated around "search engine optimization" that day. Add that up across all keywords and affiliates to share the cash out.

Oops! The potential for fraud still exists, but now its at the expense of the affiliates and partners who aren't fraudulent (false clicks weigh traffic and payout in favour of fraudsters). At least the advertiser doesn't pay and it's within your control who you use as a partner. And I think you'll find the effect of a false click is much lower, too. (Need to think about that some more).

[bobking]

Very good men!!! Thanks.

Unfortunately, those are the two we came up with too and we still think there is a better way and we're just not seeing it.

As far as paying the commission, that's what we're leaning towards BUT, I have always felt that long time success with affiliates is based on residual income. I'm afraid that if you dind't build residual income in from the begining, it's only a matter of time befoe someone smarter comes along and steals your affiliates.

With the percentage based on display model, that's the way I want to do it, but you hit the nail on the head with the fraud issue. You're right about it being better for the advertiser and that is a good thing, but it still leaves a big temptation dangling out there. PLUS, fraud costs money which means that money would have to come out of the 50% that should be devoted to profit and taxes.


That is the part we're having a challenge with. How to eliminate fraud from the affiliates. I see it becoming just as expensive for development, (and no more effective), as developing software to fight PPC fraud. the problem with that again is that cost gets passed on to the advertiser.

Bit of a sticky wicket.

[Alan Perkins]

Bob

Don't have the answer yet. Thought I got close whilst trying to get to sleep last night, but then I actually fell asleep and I've lost it again now!

One of the ideas I was mulling over was you acting as some kind of franchisor, supplying the SE to your franchisees and letting them attract their own customers and pay YOU a slice of THEIR action. Next step is for them to form a sort of "co-op", maybe run by you, to market to the core set of customers jointly. Maybe you've got more experience of franchises and co-ops than I and could think that one through a bit more...

[bobking]

EXcellent!!!

Let me talk this over with the developers and I'll let you know what we come up with.

Franchises. I like it !!!

(My guess is we would still have franchisees clicking on their own sites :)

[Alan Perkins]

I remember now!

You get both advertisers and affiliates to bid on keywords. A combined auction and Dutch-auction. Advertisers bid up, affiliates bid down. Advertisers are listed only on affiliates who are willing to accept those bids. I won't go into the details because you're smart enough to get it from that.

Remember me when you're rich, Bob. :)