Advertising is “the economic engine that powers the Web”, according to Microsoft’s Ray Ozzie. Google’s rapid ascendancy, enabled by advertising revenue, is the primary evidence for this. That said, Rick Strahl’s post on Google advertising highlights several problems with Google’s approach. It is about Adsense, the mechanism by which third-party sites (like this one) host Google advertising. When someone clicks an ad, Google gets paid, and an undisclosed percentage of the fee goes to the site owner.

Strahl runs a small business and uses Google both as advertiser and web site owner. He’s puzzled by the stats he’s gathered at both ends. As advertiser, he says that 30-40% of his hits come from link parking sites, plus another 10% which have no referrer, and reckons that these hits are worthless and in many cases possibly fraudulent. That’s up to 50% of wasted ad spend. Google tells him there is no way to opt out of link parking sites, other than by excluding specific sites; but since there are thousands of such sites and they change constantly, that is impractical.

At the other end, Strahl sees frequent deductions from the clicks on his own site, presumably on the basis that they are fraudulent or accidental (such as robot clicks). In fact, deductions from his site, which he controls and which has good, genuine content, appear to be far higher than those from the link parking sites which have no real content at all. In other words, Google seems happier to make deductions from what it pays to him, than from what he pays to Google.

He’s also curious about the ad bidding process, which always seems to end up charging him the maximum possible.

It’s possible that he has some of this wrong; but there is no way to audit Google’s figures:

In the end it feels like black magic. Google (and other advertisers as well to be fair) control the process so completely that if there’s any foul play either on Google’s part or for cheating publishers that contest clicks on the other end there’s almost no real way to tell that it’s happening and unless you have the time to keep very close tabs on it there’s no way to follow the money all the way through – on both ends. And who has that kind of time?

I find this unsurprising. The pay-per-click model has always seemed to me far too vulnerable to abuse, especially bearing in mind all those botnets. Who pays for any fraud? Not Google, but Google’s customers, the advertisers.

Some level of click fraud is inevitable, but Google’s willingness to let any old worthless bot-driven link parking site run Adsense ads is a disgrace. This stuff poisons the web, because it provides a financial incentive to post junk.

Advertisers can opt-out of Adsense, by disabling the “content network” for the ads they place. If enough advertisers do this, Google will take note.

Disclosure and to add a personal note: I am an Adsense publisher, though not an advertiser. I also use Blogads, which to my mind has a better business model for advertisers, since they specify exactly which sites they wish to use. In addition, I get to approve each ad, whereas with Adsense I have to take whatever comes. The snag is, Blogads is tiny in comparison to Google, which can seemingly always supply ads for my site.