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Wednesday, October 03, 2007

Equal Time: The Pro-Arbitrage Position

Followup to my recent article on Google AdWords' website quality policies. Although the majority of rank and file advertisers I chatted with favor Google's stances against, for example, "arbitrage sites that are designed for the sole purpose of showing ads," not all go along with the Google take on things.

One respondent, CEO of a midsized technology company, missed my deadline but took the trouble to call and leave a detailed voice message. His position explores the case for being "pro-arbitrage," on several counts:
  • It's worrisome that our rights as advertisers to try different business models can shrink not because Google cares about users, but because Google is acting anti-competitively. What can be an official curb on "sites that are designed for the sole purpose of showing ads" today could in future bleed into banning "sites that show ads that Google just doesn't like, or competes with."
  • So-called arbitrage sites are at the leading edge of user testing. Often, they convert better to a sale than so-called high quality sites, albeit requiring an extra click. In essence, arbitrage sites are the purest form of exploiting inefficiencies in the worth of media exposure. Remove this from the equation, and only less efficient forms of exploitation remain in the mix. This potentially weakens the rest of the herd as it is now being helped by enforcement as opposed to economic superiority.
  • Google directly benefits from the ads showing on things like parked domains, many of whom show nothing but ad links. So Google listens to user complaints about being directed to such sites from a paid ad, but then again, they aren't above directly earning revenue from such sites through partnerships (DomainSense). It's a question of mixed messages, and also a holier-than-thou message in the sense that companies other than Google, who like Google profit from sites that pretty much just show ad links, will be hurt by the negative rhetoric surrounding "arbitrage" while Google, in fact, continues to earn revenue from stumble-in traffic to sites that look just like the ones they are supposedly protecting us from.
The solution proposed by the observer taking the pro-arbitrage position? I'm not sure. It seems like more of a general reminder that Google's positions can be one-sided, and that they only selectively protect users from negative experiences.

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Posted by Andrew Goodman




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