Search Engine Corruption

Edition #1 – 10/23/2005

I had an interesting conversation last night with a fellow online marketer, Don from the Article Bot. He showed me a series of evidence which basically proves that the major search engines aren’t being honest with the general public, or their advertisers. I won’t take you through the full list of evidence, but I’ll give you a small example.

By the way, you should realize that I’m not generally a search engine basher. I’m spending about $150,000 year on PPC ads from Google and Yahoo, and I consider them to be an important part of my marketing strategies. But some of this stuff has got me thinking…

First, go to Google and do a search for INTC, which happens to be the stock-ticker symbol for Intel.

At the top of the page you will see a bar graph with some stock stats, and a further link to more information. Is this a paid advertisement? It does not seem to be, as it is not presented as being one, and not in the regular format of sponsored search results.

Now go to the bottom of the page and click “About Google”.
Then click on “Corporate Info”.

About halfway down the page you will see a statement that says:

“We believe you should know when someone has paid to put a message in front of you, so we always distinguish ads from the search results or other content on a page. We don’t sell placement in the search results themselves, or allow people to pay for a higher ranking there.”

This seems to confirm our belief that the INTC listing must not be a paid result. Let me ask you a question. Who are Google’s biggest competitors?

If you’re like me, you probably said companies like Yahoo, MSN, eBay, and maybe a small handful of others who are basically dividing up the internet pie as we speak.

Now go back to the INTC search results and click on that top listing. Where does it take you?

As you will see, you go to a Yahoo page which is framed on the top by Google. I don’t know about you, but typically when I click on a Google search result, they don’t open the link in a frame. You also have four tabs in the top frame:

Yahoo Finance, Fool.com, MSN MoneyCentral, and ClearStation. Each of which will show you their own page about INTC stock. Basically what we’re seeing here are strategic partnerships formed by the big players in the search industry to share traffic. Rather than kill each other off like some companies in the past, they’ve decided to literally divide the pie, and they’re doing it in a way that is not honest to the public.

Now look at the banner ads on the Yahoo Finance page. You’ll see something like Scottrade, Ameritrade and a couple others.

Now go to www.overture.com and do a search for “stock pick”. On the results page, who are the top listings?

Probably Ameritrade and Scottrade. You probably already know that Overture is now Yahoo Search Marketing, and what you are looking at are the top bidders per click for the search term “stock pick”. We already know that those companies are also Yahoo’s top banner advertisers (CPM advertising) in their category.

Now click on the listing for Ameritrade from that Overture results page. Read the page completely. As you will see, you will not find the term “stock pick” or anything even close to it!

Now go back and click on the Scottrade listing. Again you won’t find any mention of “stock pick” or even a link taking you to a stock pick page.

Now look at all of the other listings on the Overture results page. You will see that the vast majority of them have the words “stock pick” right in the ad, and most of the pages they are linked to are relevent.

The rules clearly state:

– There must be a strong, direct relationship between keywords and the content, purpose, and theme of your Web site.
– Your Web site must have substantial content that is clearly and obviously reflective of the keyword’s meaning.

So does it look like Yahoo’s top CPM advertisers are exempt from this rule that other advertisers must abide by? Here’s the theory, and it’s not my theory, but it is compelling…

As you probably know, banner advertising (CPM) is losing major ground to PPC and other forms of advertising and is arguably less effective. Yet if you call up Yahoo as a prospective advertiser they will try to sell you banner ads.

OK, so Yahoo makes a deal with XYZ Company that says we will deliver 3,000,000 targeted visitors for $1,000,000 (or whatever). They say they will use a combination of CPM and PPC advertising. On the accounting books it goes down as a $500,000 CPM sale and a $500,000 PPC sale. This allows Yahoo to show a profitable CPM business to investors, and helps lure smaller companies into CPM by showing the successful “results” of XYZ Company.

Meanwhile, XYZ Company gets to pick their search terms carte-blanche and unbeknownst to XYZ Company they are not being charged by the same method as other PPC advertisers. Yahoo sticks them in the top-bid position, but they are not charged per click. The traffic just flows until the 3,000,000 visitors have been delivered. Where this theory goes most crooked, is that the competing advertisers for the keywords will have their bids driven up by it. Where a small company was paying 50 cents per click, they might now have to pay $5 to stay competitive which is going to further increase Yahoo’s profit.

Looking back at Google, we’ve seen many “strategic” changes which were portrayed as being in the best interest of the advertisers and end-users, which upon closer inspection seem to be 100% designed to increase Google’s profit and positioning. These companies (Google, Yahoo, et al.) keep a tremendous amount of data about us and our business with them. For a long time now, they’ve allowed us to track our conversion rates. Theoretically they could use this data to find out all the “secret” keywords the little guys like me have come to depend on, determine which ones are resulting in the highest conversions, and then raise the price for those keywords since they know we’ll keep paying for it. Google’s new minimum bid program would allow them to do this sort of thing without having to explain it, since they don’t actually show any competing bids.

Again these are just conspiracy theories, but intriguing nevertheless. The above information should not be treated as factual statements, and I hereby disclaim any responsibility for them. Consider it entertainment.