Pay-Per-Click advertising: E-Rip-Off?

June 30, 2006, 12:00AM. By Jane Mundy

Dave Johnson (not his real name) started using Yahoo's Overture about three years ago to advertise his spa equipment company and hopefully, draw traffic to his website. Everything ran smoothly for about six months but Johnson now likens his relationship with Overture as that of a drug addict - constantly needing a fix and paying out ever-increasing costs.

It's a gamble and an expensive one at that, and there is no way to measure results, at least not on his own (see below).

"These guys at Yahoo should be accountable for what they did," says Johnson. "They get you into a bind - I started using Overture for search engines to get paid positioning and I was just getting adjusted to the billing, mainly asking myself if the expenses are realistic. But it got so expensive and to remove yourself from a search engine, to cancel your ads, is really hard because you have no idea how dependant your business has become on Overture.

Here's how it works:
I submitted about 150 search terms to Overture - for example, one term is 'spa equipment'. You bid high enough on that word or phrase and you come out on top. Say you have three people bidding; someone might bid .60 cents (you have to beat that price), the second person will bid .80 and the third person will come in at .81 cents. You keep bidding until someone says the word isn't worth that much anymore, just like a regular auction.

Makes sense. But here lies the problem: The competition is hoping that I cannot maintain the price with so many clicks and they force me to withdraw. Nothing is stopping this from occurring. If this happens, the competition gets the top position for a cheaper price. What I suspect is that the competition could be sitting out there clicking "spa equipment" or whatever your key word is for $1 USD per click and I have no way of knowing who is doing the clicking, or how often. For all I know, someone at Overture could be doing the clicking. I even heard that there is software on the market that does these dirty deeds for Overture.

And you can't get hold of these guys at Yahoo/Overture. They can't be reached by e-mail and there is no contact phone number - nothing is set up for customer service or complaints. So we keep getting billed and I keep paying it because my company is afraid of cutting them off; it's a crap shoot. That is where they get you, like a drug addiction.

I expected that if I were to bid on 'spa equipment' and bet .60 cents I should be paying close to that and I should be protected from fraud by Overture. I am sure that I am getting taken for a ride - my credit card is sometimes billed over $100 twice a day and phone calls to my company generated from the website doesn't reflect increased costs - not even close. Their monthly billing isn't consistent; it has probably increased over the past three years by 50 percent. Nobody is accountable. I could cut out key words (I have 150 words on the account) but I shouldn't have to do that.

There is always someone at Overture to take care of their Accounts Receivables. Funny how they can get your money right away. Why can't they send a statement out each month regarding who is clicking you and how many times? Answer: it would cost them money and they would have to part with some of the billions of dollars they are making.

I got so frustrated that about one month ago I signed up with natpal.com to look after my Overture account. They can monitor it by putting a code on your website and can track who is clicking - like a fraud buster..."

"Click fraud is rampant," says Ben Rubenstein at Natpal, "but if you monitor and track who is coming to your site, know their IP address, what their engine query is, the key word you paid for and how long they actually spent on your site, you can get the highest return on your investment from your search engine marketing."

What is his advice for a consumer who suspects click fraud? "For someone like Brad, I would advise him to begin tracking and hopefully work with a company like Natpal.com because our bidding algorithm looks at the data of people coming to your site and bids accordingly," says Rubenstein. "Our tracking can look at conversions, with a tracking phone number on all of our sites, so our end goal is to link clicks to phone calls. We don't care about clicks, but phone calls are important."