Saturday, September 23, 2006

Is click fraud really getting worse?

Both Business Week and the NY Times had articles on click fraud this week. Both claimed that the problem was "growing", but neither presented any evidence that the problem is any larger (in percetage terms) than it was, say, six months ago. Sure, they have some fresh faces and newer quotes and numbers and some colorful anecdotes, but nothing that they presented suggests that the problem is any worse than before for the overall online advertising market.

The Times quotes a number of 14% for fraudulent clicks. BusinessWeek quotes a range of 10% to 15%. Well, my recollection is that this is the same range that we were hearing about six months ago. So, the overall impact is unchanged. The magnitude of the problem would not appear to be worse.

Now, whether the actual problem is worse, better, or unchanged, is not clear, but it is also not made clear by these "new" articles.

One interesting metric that neither article offered is what percentage of raw clicks are filtered by the ad processors such as Google and Yahoo.

To truly understand the market, we need the following metrics as well as ratios between them:

  1. Ad impressions displayed.
  2. Ad clicks.
  3. "Fraudulent" clicks filtered by the ad processor (Google, Yahoo, et all)
  4. Clicks received by the advertisor.
  5. "Fraudulent" clicks filtered by the advertiser.
  6. Cost of a click to the advertiser.
  7. Cost of a non-fraudulent click to the advertiser.
  8. Cost of the click to the ad processor and the net revenue from the click after publishers gets their cut.
  9. Clicks "converted" to active prospects by the advertiser.
  10. Cost of a converted prospect.
  11. Clicks converted to "sales" by the advertiser.
  12. Cost of a converted sale.
  13. Suspicious clicks estimated by the advertiser.
  14. Estimated cost of a suspicious click.

But, the articles did not enlighten us on most of these metrics.

Judging from at least one of the quotes, it seems as if some advertisers are judging almost any un-converted click as "fraudulent", at least if the conversion rate is below industry "norms" or even below the advertiser's own expectations.

Another theme that came through from at least one of the quotes was an unrealistic expectation that if you had a certain conversion rate from one source of clicks one month, that a lower conversion rate in a subsequent month or from another source was a per se indication that click fraud was occurring. Rather, this might also indicate that either the advertiser is naive or playing the reporter as being gullible. It may be that the advetising campaign has run its course and that the advertiser has neglected to upgrade its products, services, or offers, or that it doesn't fully understand the needs of some niches of its audience. It might also be true that the market for that advertiser's goods and services may be saturated or that some niches are saturated. To suggest that a lower conversion rate automatically implies fraud is quite a suspicious leap. I'm appalled that the reporters were not a little more suspicious of the advertisers' claims.

It may simply be that some advertisers feel that their online ads are being less effective than they would prefer. That may well be true, and may in fact be the source of the anxiety expressed in the articles, but it isn't an angle that the articles pursued in any depth.

After reading these articles, the thought that leaps to my mind is that I am experiencing journalism fraud. I have an expectation that the bulk of an article in a publication such as Business Week or the NY Times will have very high value and that alleged "news" is "new." I feel that only 15% of the text of these articles was new and noteworthy and substantive, and hence that 85% of the text of these articles was a fraud since it was promoted as being new and news and noteworthy and substantive, but was really old and mostly recycled "noise" or insubstantive.

Final note: Please do not click on any of the ads displayed on my blogs and web pages unless you really are interested in the advertiser's message or offers. To click when you're not seriously interested in at least seeing and hearing what the advertiser has to say would of course be click fraud.

-- Jack Krupansky

Tuesday, September 19, 2006

Blog software probably needs to get simpler and more readily available

I agree wholeheartedly with a sentiment expressed by Business Week Blogspotting's Heather Green in a post entitled "Is There a Blog Conundrum?" that "blog software probably needs to get simpler and more readily available", except that I would state it much more imperatively and emphatically:

Blogging software must become much simpler and much more readily available if we are to entice the average person (or even the average professional) into becoming an avid "blogger."

Since I am a full-time employee of The Evil Empire, you could probably guess that I would suggest that a lot more people will begin to blog when blogging becomes an integrated capability of the Microsoft Windows operating system.

Sure, Microsoft does have Live Spaces, but that is hardly integrated with the operating system as well as email or the office applications, and still too much of a pain. Forget about businesses wth their bottom lines, the "ROI" for blogging simply isn't there for the average user.

I use Google's Blogger -- please do not click on the ads at the top of my blog simply to "pay" me, since that would be a prohibited form of "click fraud" -- and have figured out how to fairly easily post via email without the need to use a standalone "blogging tool", but it still has its quirks and I do have to resort the special tools for other than posting new content. Even correcting a simple spelling error is a time-consuming, multi-step process.

I would venture that blogging needs to be an order of magnitude easier before most people will begin to swarm to it.

As things stand today, you have to be really motivated to be an effective blogger.

Blogging probably has to be transparently and seemlessly integrated with cell phones as well to be truly convenient.

Linking to other blog posts and web pages is relatively easy, but still a pain, very error-prone, and simply not easy enough for the average user.

Ditto for placing pictures in your blog. Very doable, but still a royal pain. I would insert a photo here, but... it's such a pain to "get it right."

And something as simple as properly citing a source from the Web as I did in the first paragraph is way too much of a pain.

Ditto for tagging and categorizing and cataloging.

And I am trying to do only really simple stuff.

We have come a long way during the past seven years or so, but blogging is still only in its infancy.

Today, blogging feels a lot more like filling out an expense report than scribbling a poem on a scrap of paper.

Tools for blogging are evolving, but at too painfully slow a pace.

That's the trouble with Darwin and his evolution: there is far too much waiting for the good stuff to arrive and far too many dead ends and false starts along the way.

-- Jack Krupansky

Sunday, September 10, 2006

Web logging before blogs - 2001

Blogging tools have been around for a number of years now, but I only began to use them less than two years ago. As I was sorting through my memories of 9/11, I recalled that I had written a number of online diary entries since I was in Washington, D.C. at the time and living in both DC and NYC.

If you're curious how some us us "blogged" without formal blogging tools five years ago or are curious about my notes from 9/11 and the weeks that followed, check out my "diary" of life in Washington, DC after the 9/11 terrorist attack.

Also check out my numerous 9/11-related posts on my Political Desk blog.

There were blogging tools available at the time, but I was already publishing web sites and used to creating web pages for text content. It was more natural for me to post a new page than to "blog". These days, it is so easy to blog via email rather than using a web page editor. I composed the text of this post in Microsoft Outlook Express and simply emailed it to the email in-box for my Blogger blog. The rest of the publishing happens auto-magically.

-- Jack Krupansky

Wednesday, September 06, 2006

Global neighborhoods vs. global communities

Shel Israel was kind enough to asnswer one of my questions about his upcoming book on Global Neighborhoods. I asked what the difference was between a global neighborhood and a global community. His excellent and concise answer can be summarized as:
... I define global neighborhoods as slivers of global communities. It's where each of us hang out, feel comfortable, share issues of mutual concern. What is different about them is that these neighborhoods exist online before they spill over into the tangible world. ...

So, the answer is that both are relevant and important, both from a personal and business perspective as well as a sense of community perspective.

It is vitally important to capture the essence of this constant back and forth transitioning between online and the tangible world. Get the right balance and both worlds are much the better off for it.

I would quibble with one distinction that Shel attempted to draw:

[Thomas Friedman's "The World is Flat"] Flat World focused on global enterprises while I'm focusing on the startups who might disrupt them.

I would suggest substituting "large-scale enterprises" for "global enterprises", since even three individual business partners on separate continents (which I believe would be the epitome of what we are talking about here) could constitute a "global enterprise." Although I do realize that some circles do interpet "enterprise" as meaning big rather than simply meaning the totality of an organization. My point would be that our endeavers are way too filled with too much frickin jargon and we need to do our best to reclaim the simple, common sense dictionary from the relentless poaching of overly-ambitious "consultants". To wit, in my dictionary (Merriam-Webster), an enterprise is "a unit of economic organization or activity; especially : a business organization." There is nothing about size in there.

Nonetheless, Shel's point about focusing on startups is well taken. Startups are indeed the lifeblood, the seedcorn of American business. That's probably the biggest reason that the American car companies are in so much trouble: there are no startups to help guide the way to greener pastures.

In any case, Shel, thank you for answering my question.

-- Jack Krupansky

Tuesday, September 05, 2006

Weekend warrior

Since I have a full-time job and am putting in quite bit more than eight hours a day during the week, that limits my blogging to what I would call being the blogging equivalent of a "weekend warrior."

If an idea pops into my head during the week, I simply make a note of it and maybe get around to posting something on it during the coming weekend.

With that, I close out my blogging for this week. You will next hear from me on Friday evening or Saturday morning.

-- Jack Krupansky

Monday, September 04, 2006

Memo to Shel Israel: comments on Global Neighborhoods TOC v.01

Shel Israel (of Naked Conversations fame) is seeking feedback on his first cut at a table of contents for his new book provisionally titled Global Neighborhoods. Overall, I think he is headed in the right direction and likely to be quite successful. Now for some specific comments:

  1. Who is the intended audience and how would you characterize them? Will employees, managers, and executives at established companies find the material "actionable", or is it more of a revolutionary manifesto targeted at newcomers who are attempting to "overthrow the existing order"? There is also the hybrid audience of businesses (and non-business organizations) who are anxious to "re-invent" themselves to exploit economic, social, and political shifts.
  2. Try to tell us something that we wouldn't already have known if we have been following all of the Blogosphere, Web 2.0, social networking, social computing, and social media hype.
  3. Rather than insist that geography has absolutely no relevance, speak of a "New Geography" that seeks to simultaneoulsy exploit geography-independent technolgy and inherent geography-based differences.
  4. Be clear, at least to yourself, what fraction of the book will be loosely focused on "the vision" and what fraction will be actionable "bullet points" that organizations can use in the here and now. Both are critically important, but figuring out the right balance and mix will make or break the effort. I have faith that your instincts will guide you in the right direction, but I am still curious what that direction might be.
  5. It is good for a book to raise questions, but to be a "practical guide" it needs to balance every question with rock-solid answers, or at least robust guidance to point the reader in promising directions for enlightenment and success.
  6. Do you in fact intend for the book to be a "practical guide" for the rank and file, as opposed to a discourse for debate among the elite? I presume the former, but some of the language raised the question in my mind.
  7. What role does "The Cluetrain Manifesto" have in all of this? Is it "by definition" presumed to be an unspoken part of "the gospel", or do you intend to supplant it, or simply extend it? Or are you going to mix and match?
  8. Ditto for Friedman's "The World is Flat." In other words, what is the nice or role of Global Neighborhoods in this, ummmm... "pantheon of intellect."
  9. Are the terms "global neighborhood" and "global community" synonymous, or is their some nuance at work?
  10. When you say "Power is shifting from large central organizations to small, decentralized organizations", is that the reality, or more of a dream or vision of a possible future? A lot of large organizations are becoming distributed or even somewhat decentralized, so I think it may be a little bit too soon to close the book (so to speak) on them. But, if you sincerely believe you can make the case, by all means do so and we will all benefit from the enlightenment.
  11. The hard nut of natural language: Although language is somewhat independent of geography, there is some significant association, and it does work against truly global neighborhoods and a truly "flat" world model. How many regional or language-specific communities exist that are not global due to the language barrier? How global are any so-called global neighborhoods if accommodation is not made for local and regional language and cultural barriers?
  12. When you say "Users generating and sharing everything: digital media; open source code, etc.", I would suggest more of a trend than positing that we are already there with "everything", and I'm not even sure that the trend will go that much fruther than the low-hanging easy fruit that has already been harvested. I believe that there is a valid message here, but it seems a bit muddled right now. By all means, enlighten us.
  13. When you say "Most influential have become people most generous to communities rather than those with largest media budgets", I have a vague familiarity with the "generosity" concept, but strictly contrasting it with the size of a media budget may be a false dichotymy. Why not couple the two? Is there a thesis that says the two *must* be distinct? Or that greater "success" can only flow from greater generosity? Maybe there is. If so, show us with great clarity, and do not ask us to accept any novel propositions as given. If you want to drag "generosity" into the picture... you have a whole lot of explaining to do, literally. I believe that it does have a role, but that needs to be clarified.
  14. Disintermediation has always been a red herring. It is all about re-intermediation, the replacement of one set of intermediaries with another set of intermediaries. Whether I go online through Amazon or walk into Barnes and Noble, I'm still dealing with an intermediary. One could argue that the shift to indirect payment through advertising *is* a form of true (albeit only partial) disintermediation since collection of payment from the user is now *completely* removed.
  15. I'll have to keep thinking about the whole "big" thing. There are a lot of issues there. Certainly your points are at least somewhat valid, but there is an endless list of examples of big organizations opportunistically employing the techniques normally associated with small organizations. The development of the original IBM PC is a perfect example.
  16. It is true that the Internet diminishes the barrier quality of borders to some degree, but there are still all too many obstacles to global commerce that still exist due to local and regional borders, laws, and customs. We have made great progress, but now I sense we may be hitting another wall. If you sincerely believe this not to be the case, please do enlighten us. Privacy is a perfect example.
  17. One barrier to global collaboration is the time zone. The good news is that we have plenty of time-shifting technology, such as email and on-demand webcasts, but real-time technology such as instant messaging, chatting, web cameras, and video conferencing, *are* severely constrained by the time-zone aspect of geography. Somehow, I don't think the concept of real-time, face-to-face human communication can be treated as completely irrelevant, and is a severe impediment to truly global true neighborhoods.
  18. As far as the lobster trap, it is a fair question to ask whether the lion share of the Web 2.0 companies are headed to either oblivion or into into the arms of "big" companies, or whether there might be a new Google or eBay or Amazon or Yahoo or two or three in there. Help us see the potential for the emergence of new leaders and not simply a lot more annoying ants. Might SixApart stand apart?
  19. Here's a related question: If some of the "kids" starting up these businesses really believe in the "generosity" thing, why not structure the business financially so that it can pay employees a decent salary and then pay *private* shareholders a decent dividend, and be truly *sustainable* without having to "flip" to a big company or sell out to the greed of Wall Street. The investors could in turn show their own generosity by granting their ownership to non-profit charities who then benefit from the dividend payments. Create a sustainable loop.
  20. The lobster trap model seems relevant to the startup Web 2.0 "businesses", but I hope your intent is to make "global neighborhoods" relevant to a wider audience than merely those clustered tightly around "the bubble".
  21. Maybe the lobster trap discussion needs to be coupled with a discussion of the basic question of what value proposition is shared by any given global community/neighborhood. Some community members are making more dramatic contributions than others, and some are reaping more dramatic benefits than others. Somehow, that all has to net out to a win-win for all involved, including managers, executives, workers, users, and the larger communities in which they all exist.
  22. I would lobby for an entire chapter on sustainability. Life without bubbles? Is that too much to hope for?
  23. What makes a *real* comunity, as opposed to a mob or a dysfunctional collection of individuals?
  24. What role or roles can, does, or should "the profit motive" play in global neighborhoods? Is financial profit inherently good or inherently evil?
  25. Homework: Think about what Adam Smith would have to say about all of this, and how you would feel about that. Do "nations" or "wealth" have any positive role to play?
  26. Good luck. I'm sure the resulting book will be a big success, no matter how controversial. And the more controversial, the bigger the success. Stay away from merely echoing the echo chamber and we will all benefit.

Other than that, I really don't have much in the way of commenrtary on the preliminary table of contents.

One final comment: Please disregard *all* of my comments and simply write the book that is in your heart.

-- Jack Krupansky