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January 23, 2008

Advertising, content networks, domains, registrars, and a few other dirty little secrets on the web

Advertising is now part of the web's DNA, the scientific and collaborative origins of the web might still be there, but lets face it, once business sense got involved it was only a matter of time for advertising to come to the forefront. This entry will cover a few practices I've seen that revolve around the money-pit that is advertising, content, domains and registrars, seen from someone who both buys advertising on the web and tries to make revenue from advertising, if you do any of these things on the web, read on for some dirty little secrets that are not so obvious and are poised to break anyone legitimately involved in this same loop.

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In principle advertising on the web is simple, someone produces content that attracts users -- or 'eye-balls' as it is also often referred -- and someone pays to slap-on an advertisement so they can also get those same 'eye-balls' on their product or content, straightforward win-win situation, right ? Well it actually is, as long as there isn't anyone trying to blatantly exploit the process in order to get some revenue, to the detriment of both legitimate content producers and advertisers.

My experience wearing the Advertiser Hat

If you use any of the major on-line advertising programs -- Google, Yahoo or Microsoft MSN -- you have the option of advertising on their content networks, which basically means your ads will appear alongside articles, news stories or some other sort of content, besides appearing on related searches on the main portal page.

When I started buying advertising this seemed really appealing, an ad appearing on some really interesting story or article sounded great, I had no problem sharing a few bucks with the person who wrote it or the company willing to sponsor it, that is, if it was a REAL person they were going to send me.

We take click-fraud seriously...yeah right, everyone takes their bottom-line even more seriously

Every on-line advertiser will swear by their 'click-fraud' technology, they will scream to the top of their lungs that they won't charge you for fraudulent clicks, which is saying they won't pay any shyster clicking over-and-over your ad. For a while, I gave these on-line advertisers the benefit of the doubt, that is, after I footed a four figure advertising bill, got reimbursed a few dimes and didn't have much to show for it.

The advertising campaign I did was targeted at map users -- focused on this product we've been developing at Mashup Soft , well after 5,000 clicks referred from content ads something just didn't look right: Only close to 10 referrals of this type had used our free service/download, may be our product was really bad, but 0.2% seemed way low for using something free, so we searched our weblogs to see just where our visitors were coming from. Low and behold:

australianmaps.com, freeonlinemaps.com, maps-of-the-past.com, mapofworld.com, floridamap.com, worldmap.com, usamapp.com, mapas.com, satellite-maps.org, webmap.com, PLUS around 50 more similar sites, my first disappointment was that these last sites had no content at all, they were either simply a front-page with ads or directories that led to more ads, my biggest disappointment however, was that over 90% of the clicks via content came through this same list of sites.

Great if webmap.com is a popular name that people type in naturally, or australianmaps.com is the home page for map geeks down under, but thousands of referrals from these type of landing pages in a month sounded fishy, especially when the campaign didn't even come close to getting the same results from uber-popular flagship landing search pages like Google, Yahoo or MSN.

But what really got me fuming as an advertiser was not that someone was trying to 'game the system', as its more than likely someone will always be attempting to do this, but rather that the one managing the on-line advertising process was footing me a 4 figure content-click bill for the same period, and reimbursing me less than 1 dollar for invalid clicks, did they really not detect that thousands of clicks were coming from the same 'skeleton' domains in a month ? Did they really pay these 'skeleton' domain owners ? Makes you wonder who wound up with the difference, because I sure didn't. And yes, with the global economy there are actually people making a business paying humans to mimic actual browsing patterns and click on ads for a living: Click farms

This whole issue piqued my interest because we're a bootstrapped company, and 4 figures goes a long way anywhere, I can't even begin to imagine the magnitude of this fleecing for companies that budget 5 or 6 figures in on-line advertising targeted via content. Granted, as an advertiser you have the capability to stop displaying ads in content-networks at any time, there are more losers than you not getting quality traffic from people reading content, in this particular case, what happens to that blogger or online magazine dedicated to geographical systems ? May be they are willing to share some advertising space, however, now that I've discovered these other 60+ sites posing as mapping content providers and competing for the same dollars, no one will get any bids from me, and its only a matter of time before other advertisers in this space figure out where there money is going.

My experience wearing the Content Producer Hat

Fortunately I don't plan on making much money of content -- I've already blogged about this earlier if you care to read in Content is the peasant, if you only live in the Internet kingdom -- but it doesn't hurt to make enough to keep the lights on hosting wise and motivate yourself to keep posting, which is why you see the ads for books and products to the sides.

Unfortunately, with the same ease with which I can place ads on this blog anyone else can also do it on any other site, and the problem is that the current 'anyone' is extremely ample. I'm not trying to make a 'holier than though' statement here, its exciting that even me as a small time blogger/content producer can get a crack at some revenue this easily via a content network, the problem is advertisers will soon get a sniff of what I also experienced as a buyer: ads appearing on landing pages with zero content.

I kid you not, suppose I posted an article on Java, with what other sites do you think my content would compete ? or in other words, on what other sites would the same ad appearing on this blog also appear ? Here is a sample: javaobjects.com, javatrainingcourse.com, javacertification.com, javaenterprise.com, javanetworks.com, and how about an article on SOA, here is another sample :enterprisesoa.com, simplesoa.com, soaconsulting.com, softwaresoa.com, soadeveloper.com , not a lot of content right ? See what I am getting at.

Switching back to my Advertiser Hat, the way content-ads are currently distributed, its only a mater of time before content-networks are brought to the brink of extinction, once the company footing the bill realizes their ads are being placed on 'skeleton' type web sites with no solid readership, something that will also hit small-time content producers -- bloggers -- trying to make money directly from ads ( Again see : Content is the peasant, if you only live in the Internet kingdom ). I truly believe this could put web content back in the 1995 age, were in order to make revenue on content you needed to have direct contact with someone who had discretionary power over a marketing budget -- just like on TV -- the 'copy-paste code in minutes' model of the content-networks can only go so long with this service level.

Even though all the major on-line advertisers have recently taken steps in the right direction offering people running campaigns like myself the capability to block where ads can appear, its not enough by a long-shot. Just by my experience on mapping, there were well over 60 sites that were parked 'skeletons' showing my ads, am I suppose to scour my visitor logs and the Internet every few months and tell the major portals where not to show my ads ? Isn't it obvious these sites don't have any content ? Aren't they also making a buck ? And 'supposedly' reimbursing me for fraudulent-clicks ? It's safe to say that after feeling slimed, I simply did the easiest thing turning off content-network advertising, to the detriment of getting new leads via content and the few legitimate content producers related to mapping technology.

Still, as an ordinary Joe using the web I was curious, all these flaky domains related to mapping, Java, SOA -- and who knows what other areas -- showing ads on the landing page and trying to make a buck seemed more than a coincidence, it seemed way too organized.

Finally: The Domain game

Who had the resources or if you will the 'hindsight' to register: australianmaps.com, freeonlinemaps.com, maps-of-the-past.com, mapofworld.com, floridamap.com, worldmap.com, usamapp.com, mapas.com, satellite-maps.org, webmap.com and 50+ more related domains ? Well, a simple WHOIS search showed some very interesting results.

As it turns out, five domains out of the whole list were registered to the same P.O.Box in Miami, Florida, and another 15 were registered through a Domain By Proxy company, in other words, someone who wanted to shield their real address placing an intermediary -- Proxy -- as their contact information, who these people were at this point really didn't matter, I was just curious to see if there was a link between each domain, and this simple WHOIS search proved it.

Though I was in fact irritated by the fact these same people were placing my ads as though they were content providers, technically they were just exploiting the way content networks operated on a 'copy-paste this code for ads on your site' mode, after all they were still paying for these domains and risking little as it was, to perhaps make up some ad revenue.

At this point, I was entering Average Joe conspiracy hell, did the same group/person really buy all these domains ? It seemed dubious to get so much traffic from these type of sites compared to the flagship search-engines and non-actionable traffic at that -- an interested 'clicker' not even using a free service with no sign-up ? .Well, I did some more digging on what was then to me the 'simple process' of domain registration, turns out they have their own lexicon for shady dealings with names like: domain 'tasting', domain kiting and domain front-running.

For starters, it came to my surprise there are over 800 authorized registrars by ICANN , that means all these companies can sell domains to the public, at first it seemed unimportant, until you realize that by being a registrar they have the discretion to 'taste' a domain for up to 5 days without paying a penny.

That's right, they have the privilege of showing a landing page without paying anything, zilch, zero, nada! Try it out at one of the bigger registrars , search for say theendofcontentnetworks.com or cantheyreallyshowalandingpageforfree.com, once they say its available close up your browser, give them around 30 minutes and then type this domain in your browser, and surprise-surprise no timeout! you will see this registrar's landing page with instructions on how to buy it, of course at this point you can only buy from this registrar, the other registrars are effectively locked-out because someone else is 'tasting' it.

This practice is worrisome for numerous reasons. For one this particular registrar is saving every search made by the public without disclosing the fact, they aren't stealing the domain, but they are effectively locking a possible sale without the user being aware of it, no ads but still.

Keep in mind this is just ONE registrar 'tasting' based on user search results, and there are over 800 capable of doing the same! who says they cant sit 'tasting' a domain if it simply has a catchy name ? And it doesn't take much to swap a 'Buy this domain from our registrar' to place the 'copy-paste code for showing ads'. Well, as it turns out someone has already blown the whistle on this practice and provided some 'hard-numbers', according to Bob Parsons who is the CEO of a registrar named GoDaddy: of the 55.1 million domain names registered in February 2007, 51.5 million were canceled and refunded just before the 5 day grace period expired and only 3.6 million domain names were actually kept. That's a whopping 93.5% cancellation rate, if you can't figure out the incentive for 'tasting' these 51.5 million domain's in a month read Parsons complete post (Hint: Follow the advertising $$...)

I will leave how many of these 'skeleton' sites making money off ads are linked to one of the over 800 registrars without paying a fee -- and possibly operating click farms on the side -- to the conspiracy theorists or a good investigative reporter. But I can tell you one thing, I am still in amazement how a supposed policy by ICANN via registrars or the simple use of ads by 'parked domains', is already having such a profound influence on how content-networks operate on the web, and how us little guys whether buying ads or trying to make a little money of content via ads are already coping with the consequences.

Update Just found this piece, hopefully there is some truth to it Google to kill Domain Tasting . They refer to Google as the killer because its precisely their content network which makes 'tasting' attractive, incredible the numbers they cite: It was disclosed in court that one partner that Google had was generating as much as $3 million dollars a month from the practice and that was after Google’s revenue share , that would be +$3 million for that one partner plus another (likely) +$3-5 million for Google's share, and yes, a 7 figure advertising bill for the whole lot of advertisers using the content network, and if you believe in wealth distribution, $3 million that could have gone to legitimate content producers/bloggers with probably better returns for the advertisers.

Update 2: It appears domain 'tasting' will finally come to an END. How? Obviously by making it costly : New ICANN policy stops domain tasting . Kudos to ICANN for stepping up. Next battle front, content networks and RSS feeds , for more on this read: 'Content is king' the continuing saga, now with tight money

Posted by Daniel at January 23, 2008 11:40 AM