New research from Harvard Professors Tyler Moore and Ben Edelman suggests that Google may be profiting from typosquatters - at the expense of online advertisers.
The scheme is a simple one for the perpetrators: owners of such typosquatting sites place ads on them in the hopes that people who accidentally navigate there will click on them. Moore and Edelman - who has done several indepth and critical studies of Google’s policies - estimate that Google earns about $500 million a year in such misplaced revenues.
The duo arrive at their conclusions using a number of assumptions and extrapolations - thus the figures are a best-guess estimate. Still, they give an idea of the magnitude of the problem - and costs that advertisers are absorbing. According to Moore and Edelman, 57% of typo domains include Google pay-per-click ads.
As Google does not report its revenues from domain parking sites, they estimated Google's charges based on a revenue per search metric of 3.5 cents. Also, an AdSense domains case study suggests that Google's domain parking prices are comparable to other Google prices, they said. "Combining these factors, and extrapolating across the top 100,000 sites with the other values estimated above, we estimate that Google's revenue from typosquatting on the top 100,000 sites is $497 million per year."
In fact, parking sites including typosquatting sites probably have a higher click-through rate because they typically show only ads, and no other links, they add.
"If so, advertisers' costs for typosquatting placements could easily exceed our estimates by a factor of two or more."
An Online Advertiser’s Advocate
Edelman has become an online advertiser’s advocate of sorts with his research. He recently identified a new breed of click fraud that not only simulates clicks on a Google ad - but also seemingly generates a 'real' customer purchase on the advertiser's website.
Spyware on a user's PC monitors the user's browsing to determine his or her likely purchase intent, he explained in a blog post. Then the spyware fakes a click on a Google PPC ad promoting the exact merchant the user was already visiting.
If the user proceeds to make a purchase - which is reasonably likely for a user already navigating to the merchant's site - the merchant will naturally credit Google for the sale.
Much of the culpability for this fraud, Edelman says, can be attributed to a search engine that Google uses to broker ads. In the scheme that Edelman tracked, these ads were passed on to more than seven other shady affiliates that perpetuated the fraud through the search engine.
Invisible Ads
Edelman also unmasked sleigh-of-hand tactics used by websites to sell more advertising than they have space for. These publishers use so-called invisible ads created by computer codes. To marketers it appears that their ads are running on the actual website - but in fact they are on special sites created with deception in mind. Edelman said that Kraft Foods, Greyhound Lines and Capital One Financial were among the firms victimized.
