Geek News

A couple of years ago I wrote “Pay Per Click Search Engine Marketing for Dummies.” I’ve worked with all the large Pay Per Click, or PPC, services – Google AdWords, Yahoo Search Marketing and Microsoft’s MSN adCenter; and I’ve even worked with various smaller services, such as Miva and Enhance.

But the more I use PPC, and the more I talk to businesses about their PPC campaigns, the more I think PPC is a lousy deal for most firms. What really shocked me was the dirty little trick MSN played on its clients recently.

First, let me  clarify. I’m not saying it’s impossible to make money from PPC ads. There are many, many companies doing so. But I suspect most companies, or at least a very large minority, actually lose money on PPC. The PPC business reminds me of Internet banner ads in 1998 to 2000, a business based on the concept of “give it a try.” Every time a company stopped using banner ads because they were losing money, another dozen would jump in because they hadn’t yet learned that they would lose money.

Today the same game is being played out in the PPC field, as companies pay ridiculous sums for clicks – $6 per click, one insurance agent recently told me he was having to pay – in an often vain attempt to squeeze business out of the Web. These companies run their campaigns for a few months, hoping that somehow “tomorrow” it will start working, then give up. But plenty of others are just entering the market, keeping click prices up.

Still, buyer beware and all that. It’s a PPC firm’s job to maximize revenues, and my job to explain to my consulting clients how to make it work and warn about the risks. But Microsoft’s MSN adCenter service crossed the line recently.  I wouldn’t dream of writing that MSN had played a scam, but that’s the word that came to mind when I realized what they’d done.

First, a little background. There are two distribution methods for PPC ads; they can be displayed in search results, or on “content” pages. In this second method, ads are displayed on thousands of different Web sites, not based on anyone’s search query but simply based on keywords found in the content pages.

I generally tell my clients to turn off content distribution, at least initially, because these ads frequently have a bad return on investment; paying for clicks you get from content ads is often not worth the money. Google recently launched a Pay Per Action program for content ads, but that’s a different story.

So, one of my clients – Client X – turned off content ads, and ran the campaign for a number of months (not profitably, but hey, I warned ’em!).

Well, on April 4 I received an e-mail from MSN because my address was still on X’s PPC account. The subject was “Account upgrade to Content Ads,” and the message included this: “On April 12, 2007, we’ll upgrade your account, and your ad distribution will expand to content-based Web pages … your text ads will display next to relevant content … within the Microsoft network … your orders … will set to hybrid, meaning they distribute to search results pages and content pages.”

Get it? X turned off content ads, but Microsoft was “excited” to “upgrade” them to content ads, without their permission. X could tell Microsoft not to, but if they didn’t read the e-mail closely, which X didn’t, content ads would turn on, and X would be – and was, in fact – charged thousands of dollars they had never agreed to spend. This, I was told by an MSN adCenter support person was an “industry standard” procedure.

Which reminds me. Beware the PPC firm that wants to create your PPC campaign for you. Yahoo, for instance, has a $199 Assisted Setup service in which a “specialist” sets up your account.

From what I’ve seen, though, these so-called “specialists” configure campaigns to maximize clicks to your Web site, not to maximize sales or, better still, profits.

PPC advertising presents two challenges; you want to maximize the number of good prospects clicking on the ad, but also discourage bad prospects from clicking on the ad (good prospect or bad, you’re paying for each click). Conversely, it’s in the interest of the PPC firm to maximize clicks, regardless of whether they are good or bad, and many of these specialists do just that.

The bottom line is, I guess, don’t trust the PPC firms. Don’t trust them when they tell you “anyone” can make money with PPC, beware their “assistance” … and read every e-mail they send you.

Peter Kent is an e-commerce consultant in Denver. He can be reached at www.PeterKentConsulting.com/ or GeekNews@PeterKentConsulting.com.