AdSense Kicking Out Arbitrage Publishers

[Chris]

Supposedly, only source I have for this info is here:

http://www.jensense.com/archives/2007/05/google_adsense_16.html

[Emancipator]

chris what is an arbitrage page? when you have a minute can you explain what it is and the process?

[Chris]

Arbitrage is buying PPC traffic at low cost, and reselling it at high cost by sending all such traffic to a page with just ads.

For instance, I just noticed an add for this site running on my literature site

http://www.essaypaper.info/

It doesn't look like they use Adsense, but you get the picture. I'm sure you've seen such sites before.

So Google is FINALLY taking the high road and telling such publishers to piss off. This is good because their crap traffic devalues the content network for advertisers, which in the end hurts good publishers.

[KLB]

Oh if it were only true that we would see an end to AdSense funded arbitrage.

[Cutter]

Shoemoney has a different take on whats happening:
http://www.shoemoney.com/2007/05/19/adsense-arbitrage-just-the-facts/

The fundamental problem with arbitrage is traffic quality. If someone searches "cheap shoes" on Google, and lands on a page with ads withads for "designer shoes" there still is a good probability that the visitor will convert. However, when your traffic source changes, to say, Myspace, that conversion probability can drop into non-existance.

As for the example Chris posted, it looks like they are running an overture/Yahoo feed. What Jensense alleges is happening does only involves arbitragers monetizing with Adsense, Google is not cutting off the Adwords account were the purchases are coming from.

From what I've been hearing there is some serious money being pushed into arbitrage. I read a post on Frank Schilling's blog a few weeks ago (big domain guy) who said he had heard investors saying they felt the risks were lower for arbitrage as opposed to domains. Some of them will learn the hard way how quickly Google can change all the rules!

[rpanella]

Google has always been about solving things algorithmically instead of manually. It makes a lot more sense that in this case, they are simply terminating sites that have a very low ROI for advertisers (many of which happen to be arbitrage sites) rather than evaluating each site by hand to determine if it is an "arbitrage site" by their definition.

The end result would be the same, just instead of targeting arbitrage sites specifically, they would be targeting low performers, which many arbitrage sites happen to be.
________
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[Cutter]

Writing a post for my blog about this and doing some research. Here is what is probably going on with essaypaper.info... "garbitrage" http://frankschilling.typepad.com/my_weblog/2007/02/garbatrage_crac.html

[Emancipator]

thanks chris and cutter that link you just pasted helped alot as well. so they buy junk traffic, send it to a high paying lander page and cash in.

[Cutter]

Thats part of it. Not all of the traffic is "junk."

In its simplist form its Paid Traffic -> Page with PPC ads (Adsense) relevent to the Paid Traffic

The quality of traffic can be all over the place. Many arbitragers were just buying targeted traffic from Adwords and sending it straight to a PPC page.

The Adwords traffic in itself is very high quality, but there could be variations depending on what that initial search was. However, because content traffic is a lot cheaper than search traffic it generally is not a problem. Google's smart pricing also helps drive down the content clicks. So, the traffic may not convert 1:30, but rather 1:300, but that doesn't matter when you are paying 5 cents a click verse $1.50.

In terms of true "junk" traffic -- this would be adware, international traffic (which is geotargetted, but could be going through a proxy), outright fraudulant clicks, and so on. It appears to me that arbitragers aren't directly involved in this but some buy traffic from these very questionable second/third tier PPC companies like SearchFeed and ABCSearch which, as far as I can guess, 75%+ of their traffic is total crap for all kinds of reasons including fraud.

[john190]

I heard about this to on many other forums on the web. Does anybody know if they have started kicking people out yet?

[Xander]

I heard about this to on many other forums on the web. Does anybody know if they have started kicking people out yet?

I've only heard about publishers being kicked out after that article that where not actually that specific in reason, just kicked out for TOS abuse.

[Chris]

supposed it was June 1st.

[ZigE]

There was an adwords update on the 8th that seemed to hurt alot of affiliate publishers, through landing page quality score. People getting hit with $10 minimum cpc

Google are definitely focused on user experience, and trying to cut out these middle men.

[Cutter]

Or they are trying to push up the rates of their entire advertiser base. Think about this, arbitragers can get new accounts and domain names to test out and figure out how the "quality score" works. For someone with an established brand -- say a bank, they can't just switch their identity.

Here is the bottom line. Google likes user experience but they like dollars even more. If they are cutting out the affiliate arbitragers, the money is going to come from somewhere else. And yeah, there are arbitragers that spend very serious amounts of money with Adwords.

[Chris]

Money for google's isn't the end all be all goal. They've banned lots of different industries from advertising with adwords at all. That probably amounts to hundreds of millions of dollars that ends up going elsewhere.

[Srirangan]

Great news if they go ahead and maintain the quality of the service. After all these so called "publishers" haven't stuck to the fair methods, why shouldn't Google protect its interests?

If you are a honest publisher and/or an advertiser on Adwords, this should work out for the best.

If you are one of the MFA 'publishers', party's over!