Today I received an email from Google AdSense regarding the “retirement” of the AdSense Referrals Program. The program, which allowed publishers to use referral ads to promote Google products directly or 3rd party offers from AdWords advertisers. The email mentioned that Google AdSense Referral codes will no longer display ads beginning the last week of August, creating a lot of work for individuals participating in Google’s initial attempt at pay-for-performance marketing.

The email mentioned that Google AdSense Referral codes will no longer display ads beginning the last week of August, creating a lot of work for individuals participating in Google’s initial attempt at pay-for-performance marketing.

This does not come as a surprise, as Google was inevitably going to utilize DoubleClick’s affiliate platform (DoubleClick Performics) for it’s pay-for-performance offering. As a result, DoubleClick’s Affiliate Network will now operate as the “Google Affiliate Network”. I would imagine that with better resources and reporting, the Google Affiliate Network will become a force to be reckoned with. I personally found the outgoing AdSense Referral Program a bit quirky and lacking cohesiveness.
The actual email that I received reads:

Hello,

Thank you for participating in the AdSense Referrals program.
We’re writing to let you know that we will be retiring the AdSense
Referrals program during the last week of August. We appreciate
your patience during this transition and here are some alternative
options to consider:

* Google Affiliate Network: As part of the integration of
DoubleClick, the DoubleClick Performics Affiliate Network will now
operate as the Google Affiliate Network for advertisers targeting
users located in the United States. Similar to the AdSense
Referrals program, the Google Affiliate Network enables publishers
to apply for advertiser programs and get paid based on
advertiser-defined actions instead of clicks or impressions. For
further details, please visit:
www.google.com/ads/affiliatenetwork.
* AdSense for content ads: If you have less than three AdSense
for content ad units on a page, you may wish to replace the
referral ad units with standard AFC ad units.

If you currently use referral ads, either to promote Google
products or offerings from AdWords advertisers, AdSense Referrals
code will no longer display ads beginning the last week of August.
We encourage you to take the following steps before the product is
retired:

* Remove the referral code from your site(s): Please take a
moment to remove all referral code from your sites before the last
week of August, so you can continue to effectively monetize your
ad space.
* Run and save all referrals reports on your desktop: Create
and save all reports related to the referrals program on your
desktop, so you continue to have access to your valuable campaign
information

Why is this happening?
We’re constantly looking for ways to improve AdSense by developing
and supporting features which drive the best monetization results
for our publishers. Sometimes, this requires retiring existing
features so we can focus our efforts on the ones that will be most
effective in the long term. For this reason, we will be retiring
the AdSense Referrals program. If you have any additional
questions, please visit our Help Center:
http://www.google.com/adsense/support/bin/topic.py?topic=14882

Sincerely.

The Google AdSense Team

To my surprise, this is the alert that I received when I logged into my Adwords account this morning. It seems that Google has made a strategic decision that completely overstepped boundaries of ethics and common sense.

About Google Adwords Automatic Matching

Basically, the largest paid search advertising platform, Google Adwords, will now begin automatically adding new keywords to their advertisers campaigns. These words will spawn existing ads with the highest quality score (basically CTR) and drive users to the landing page associated with the ad. You can read the official Google Adwords Automatic Matching description if you’d like more detail; although I would imagine it will change as the industry reacts.

Google has been beta testing this Automatic Matching for a few months now and chose the day before a 3-day weekend to automatically enable this feature on Adwords advertiser accounts. At first glance some users might think this is great, since the platform will find and test new, related keywords that advertisers may have not known about. When looking at this decision by the Google Adwords team a bit closer, it is easy to see that this is not only a bad move, but more importantly, an unethical one.

Why Google Adwords Automatic Matching was poorly executed

1- No focus on REAL performance metrics
According to Google:

The system will continually monitor your performance on these queries and adjust its matches accordingly. Automatic matching aims to show your ads only on queries that yield a high clickthrough rate (CTR) and a cost-per-click (CPC) comparable to or better than your ad group’s current average CPC. This way, your ads receive additional targeted traffic at a similar cost to your current traffic.

Higher click-through rates (CTR) do not mean much for most advertisers, who are focused on the resulting user behavior beyond the click at the keyword level. Anyone that has ever measured conversions (sales, sign ups, key page visits…) knows how much variance there can be from one keyword to another, so adding new keywords with a high CTR only ensures one thing - Google is going to max out advertisers daily budgets.

Some may like getting the extra traffic, but for advertisers that are working on a tight margin, this could actually put their cost per conversion over their threshold, causing them to lose money due to an inefficient campaign configuration.

2 - Some Advertisers Keywords are Regulated
Having managed several pharmaceutical campaigns, I know that the specific keywords that are used require legal and regulatory review in order to ensure compliance with FDA regulations. Adding new keywords will automatically wind up tossing this important consumer protection layer out the window, possibly causing searchers to become misinformed about what conditions a drug effectively treats among other mishaps.

Aside from the pharmaceutical industry, I can see a lot of copyright infringement and brand misuse by affiliates and even companies themselves that have not added comprehensive negative keywords to their ad groups.

3 - Automatic Opt-In
Come on. Seriously. Automatically enabling this type of feature is straight up unethical. This should be something that advertisers can review and then decide on themselves.

4- Bad Timing and Lack of Communication
I can’t imagine that the Memorial Day holiday weekend didn’t cross the minds of Google Adwords decision makers when choosing a date to launch this feature, which is automatically enabled. How much additional ad revenue will they make by pushing the budget limits of their advertisers campaigns for a few days before everyone returns to work and has a chance to disable this feature?

Aside from that, I personally received no communication regarding Google Adwords Automatic Matching prior to logging in to my account just a few moments ago.

5 - Diluted Keyword Performance Metrics

According to Google:

Performance statistics: Aggregated performance statistics for automatic matching will appear in each ad group’s Keywords tab, in a line item labeled Automatic Matching Total.

Search Query Performance report: You can see the search queries that triggered your ads due to automatic matching by running a Search Query Performance report. The queries will be labeled Automatic in the Search Query Match Type column.

What this means is advertisers can’t even track the performance of their new, auto-added keywords on an individual basis. Google aggregates the new keywords as one channel and then allow advertisers to run a separate report to see what keyword terms actually are in that group.

For an innovative, “do no evil” company like Google, I simply can’t see how they can get out of this one without a pubic apology and some changes to the new Automatic Matching feature.

I read this article this morning:

Where Does Google Go Next?

It’s always cool to hear about people breaking off and doing their own thing. I think that this article is good in that respect, but it tries to put a bit of a negative spin on it, alluding that “The Google” is doing something wrong to cause more of its people to leave. If you look at the situation realistically, it is inevitable for a huge corporation, hiring tons of smart, innovative people. I think that it would be a savvy move to see them embrace their exiting entrepreneurs and help them at whatever level they need to get out and continue to build the “the internets”. Do I smell a Google Incubator Program?