Lawsuits Abound as Search Advertising Is Still Finding It’s Way

Two lawsuits have recently been lodged against Google, the leading search advertising provider with regard to search advertising, showing that search advertising is still in an early phase of growth, experimentation and boundary testing (intentional or unintentional).  Search advertising continues to grow and develop as a key tool for online advertisers. As this relatively new business evolves and finds its way in combining technology with the needs of marketers, bumps in the road persistently crop up.  We’ll take a brief look at two of them.

Previous problems with click fraud, such as invalid clicks being made by business owners aimed at raising the cost of advertising for their competitors, are well known. These types of problems with search advertising can lead to a low cost advertising vehicle suddenly becoming high cost without producing the desired results.  New issues with search advertising are revealed on a regular basis. The two latest lawsuits illustrate how marketers using search advertising need to be well versed in how the programs work. They must also keep their eyes open for any inconsistencies that may diminish advertising results or increase costs unnecessarily.

One lawsuit alleges fraud when Google serves ads on recently purchased, but still-empty, websites. People often find their way to a parked domain, but it is usually by accident making the likelihood of the advertiser garnering meaningful traffic from a parked domain low. The lawsuit centers on Google’s lack of notification to the ad purchaser that ads will be placed on parked domains. It suggests that Google uses the parked domain program to intentionally serve invalid clicks, raising their click revenue in the process while making it difficult for advertisers to track the source of invalid clicks. The clicks are considered invalid as they are made by users without genuine purchase intent.

The second lawsuit against Google claims a lack of clarity in the AdWords Bidding process which can lead to the cost of an advertiser’s ads placed on the lower performing content network being capped at the same Cost per Click as those on the higher performing search result pages.

While the lawyers, supervising bodies, and courts will sort out the legalities of these issues, the message for marketers and advertisers is clear: Use technology and emerging opportunities but use them with a measure of healthy skepticism. Know the strengths and possible pitfalls of various programs, monitor activity and track results carefully to make sure you’re getting your money’s worth. Read the fine print. If you see anything in the course of a program that doesn’t make sense, put up a red flag and track down the answers.

For the providers - the Googles of the world - the message is also clear: Inform and communicate. Manage the expectations of your advertising clients. Any frailty of the system will be uncovered and whether mistakes or even fraud are intended or unintended by-products of emerging technology, consequences will result unless the partnership between advertiser and provider is open and trustworthy.

By Susan Garber.  Susan has been a creator and marketer of interactive companies and products since the early 1990s. Her brand, marketing, and advertising experience stretches back to the pre-digital world and she now focuses on strategy development and on bringing traditional and interactive disciplines together for effect business and brand building.