AdSense, Amazon and Affiliates
For all you wannabe cybercriminals out there, Joel Spolsky has a good expose of how AdSense click fraud is accomplished. Though Google can doubtless use algorithmic methods to further limit the problem, I don’t believe that this approach represents a true long-term solution. It’s a bit like fighting an insurgency with conventional forces; you can shock and awe them, but if you fight the battle on their terms, you’re never going to achieve definitive victory. (I think I may have been reading too much Salon lately.)
The real solution is to move from a pay-per-click to a pay-per-sale strategy. PPC is already a big improvement over previous approaches to advertising; i.e. throw a whole bunch of ads out there and hope it was worth whatever it cost you. But what you really want is to pay only when your ads lead to real revenues.
Luckily there’s a precedent for this: it’s called the Amazon affilitate system. If I link to a book on Amazon from my website using my affiliate ID, I get a slice of the pie if, and only if, the person actually buys the book. For all intents and purposes, this is PPS advertising. What we need is an affiliate system a la Amazon, but as generalized as AdSense is. Of course, the problem is a lot more difficult than normal AdSense, since the advertiser has to track what the user does once they arrive on the site, and let Google know in some standardized way whether they buy anything.
Not easy, but whoever cracks that nut has achieved the Holy Grail of advertising. Let the games begin!
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Besides requiring the partner to track some kind of session identifier that can be correlated back to a click on an AdSense ad, there is the problem of partner honesty.
Who’s to say that partner’s would report properly the clicks that converted into sales? Could Google track and count these using some novel method, and the numbers (from Google and the partners) reconciled automatically?
Comment by Julien Couvreur — 10/26/2005 @ 10:56 pm
Matt, there are a number of such solutions for revenue sharing. It goes by the term web affiliates and includes both pay-per-click and pay-per-sale transactions. There are networks that aggregate the advertisers and publishers to handle the link exchange. These include Linkshare, Commission Junction, Shareasale, and many more. Companies can also assemble their own “indie” (independent) programs using affilate software. In the latter case, the advertiser must then solicit websites to publish their ads. In fact, my company will soon release an alternative to Google AdWords/AdSense, with a unique twist, that exploits a web affiliate mechanism.
Comment by Mike — 10/27/2005 @ 12:56 am
Mike - Cedric also took me to task for being such an ignoramus. I didn’t realize that so many services of this type already existed. In any case, they aren’t going to have the same impact as AdSense until it’s totally braindead easy to sign up. Right now, it takes a few days of development to integrate your commerce site with their engine, apparently. What we need is a standard affiliate web service protocol, I think, so the platform providers can offer connectivity as a feature.
Julien - According to Ced, companies who do this have an agreement to audit your accounts periodically to make sure that you are paying the proper commissions. I guess there is some cheating, but probably sufficient incentive for most people to play fair.
Comment by Matt — 10/27/2005 @ 4:47 pm