Is Google AdSense Intrinsically Suited for Made for AdSense (Scammer) Sites?

I was looking at some strange advertisements which appear on my stem cell research site and realized something always in front of us and yet startling on realization.

First I noticed that some totally irrelevant sites appear before totally relevant sites (like selling cloning reagents, offering stem cell treatments etc.). It was odd. In my mind Google has a virtual auction where ads and their relative positioning is determined based on their “worth”.

Obviously relevant ads are more worthwhile for my viewers than irrelevant ads. Most of my viewers (on stem cell blog) are patients suffering from diseases who are looking to find a solution with stem cell based treatments. It doesn’t serve them to watch MFA sites and wade through their link-jungles. So I decided to block them irrespective of whatever they may be paying. I don’t need anything from MFA sites. Then I realized the whole story.

The key to AdSense story is “worth” of an ad. Why is worth important?

Monetary worth is important to publishers as they will naturally want to better position higher paying ads thereby earning more.

Additionally quality of an ad (attractiveness) is important to Google as more people will click on higher quality ads, leading to better revenue for Google.

For advertisers higher quality (attractiveness) ad ensures better click-through rates (caveats mentioned later).

Yahoo Publisher Network bases the worth of an ad with a simple formula - How much they are paying. We will see at the end why this simple formula is possibly the best.

AdSense uses an algorithm where the cost is factored along with success rate (clickthrough rate) of the ad. What they tried to do was to encourage better advertisements by “rewarding” better ads (higher clickthrough rates) with better positioning, often over higher paying ads.

The core issue with this formula is that it encourages dishonest (MFA) advertisers to game the genuine publishers (by better placing MFA ads over genuine ads) as well as genuine advertisers (non-MFA advertisers). Genuine advertisers find it increasingly difficult to find better placement for their ads and find their clicks coming from dubious MFA sites. The problem with genuine advertisers are at various levels.
1. They are unable to easily get eyeballs in prime advertising sites.
2. Their ads are being placed on dubious MFA sites which lowers their reputation by association. It is like placing your children’s book ad on a strip bar.
3. Often such MFA sites resort to unenthical means to increase clicks thereby severely hurting the advertisers. It is not always possible (nor economical) for them check every site from where their clicks are coming from especially for big advertisers.

Google is winning in the short term with this strategy (more clicks = more revenue) but will definitely loose when other players like Yahoo and Microsoft enter into this market (Yahoo has already entered on a limited trial basis). Because when advertisers and publishers both loose they will both find a better solution for their itch.

Let’s understand why Google wins more with MFA sites. When an user clicks on a MFA site and then finally clicks on the advertisers site then Google wins both ways. It wins anyway from the genuine advertiser as well as from the MFA advertisers. Also it is sure MFA sites are raking in decent revenue otherwise there wouldn’t be so many of them. That means they are getting more from their AdSense than they are spending over AdWords.

Ultimately the cost is on genuine advertisers. Their budget spending increases, genuine publishers gets less, Google makes double or more, MFA sites competes with genuine publishers in revenue without having anything to contribute in value.

Also realize that such sites create a bad reputation for Google Ads in general with web users.

BTW: Google attempt to algorithmically increase their revenue doesn’t end here. They also “smart price” their publishers essentially penalize (lower payment) all their sites for one low conversion sites.

How can Google solve this?
A simple yet fair way is to place higher paying ads over lower paying ads. It makes sense for advertisers as they get their money’s worth. It strongly discourages MFA sites as they cannot game the system to better position their ads over genuine advertisers, without paying more. In essence instantly MFA becomes a losing proposition.

Publishers don’t have to bother much with site blocking and watching out for MFA sites. Google gets a fair share of the proceeds (not double). However Google wins over advertisers as well as publisher ensuring a strong growth in the long term.

Everyone wins except MFA’s.

To summarize I am saying Google AdSense algorithm is wrong. You cannot measure “worth” (without the pitfalls) of an ad (or of most other things) other than using something really simple as monetary worth.