Radiator.com Boiling over Bum Clicks

The current click fraud wrangles have given industry-wide prominence to a handful of small search marketers unaccustomed to the spotlight: Lane’s Gifts & Collectibles, Web hosting service AIT, Crafts by Veronica, Metrodate.com. All of these made national news by putting their names on a legal filing against Google or Yahoo! in a state or federal courthouse. All are relative Davids who have decided to take on the search Goliaths over sub-par clicks for which they believe they were not rightfully compensated.

Add another name to the list of the publicly aggrieved: Radiator.com, the auto-supply Web site owned by 1-800-Radiator, based in Benicia CA. Radiator.com was written up about 10 days ago in an Associated Press story on the persistence of Google’s click fraud problems, and Internet marketing director John Thys says his phone started ringing off the hook immediately with calls from fellow advertisers suspicious of fraud.

“I started hearing from all these small to medium-sized guys all around the country who were just in a state of confusion about what Google is really doing about click fraud,” he says. “They all had the same story we had: They’d submitted data to Google about possible click fraud and hadn’t gotten any kind of satisfactory response.”

Radiator.com is the Web offshoot of an auto-radiator wholesaler, Radiator Express Warehouse, that Thys says has been in business for more than 20 years. The company’s main focus is still wholesale distribution, but in 2001 it started servicing the do-it-yourself car care market. The company began putting up a small Web site and shortly after that began running pay-per-click (PPC) ads on Google.

“[Google] actually wrote up a case study about us,” Thys says. “They saw this small company start out spending $1000 a month on search marketing and then grow that budget to $15,000 or $20,000 a month very quickly. So they saw us really ramp up fast and wrote up a study about how this small-to-medium company was expanding their sales using their PPC program.”

That makes it all the harder to understand the cavalier treatment Radiator.com received earlier this year when Thys went poking into his company’s PPC logs and found what he believes are fraudulent clicks.

Thys had just taken over Internet marketing for the company and was conducting a sweeping review of all its marketing initiatives to prune back on efforts that weren’t seeing solid returns. He makes no bones about the fact that the search marketing program at Radiator.com had grown out of proportion to the results it was producing.

“We’re a typical mid-sized company in that we live on data,” he says. “We throw a little money at lot of different marketing things, analyze the results, and as soon as we find something that works, we throw a lot of money at it. So within the first four months of using Google’s PPC, we really cranked our search volume.” So much so, in fact, that by the time Thys came into his post, the company was not showing a profit from its search marketing efforts.

“We were spending too much money on general auto-parts keywords not related to radiators,” he says. “They were driving a lot of traffic, but they weren’t converting into sales.” The company had begun to shift business model, going from being an independent enterprise to becoming a franchise-owned model with more than 40 independent owners across the country. Those franchisors pay a percentage of their sales into a marketing fund—and they wanted to see hat money spent wisely.

Thys brought in an outside contractor to analyze the PPC program and cut away the waste. She did so and now manages the program. Thys says Radiator.com now makes bids against 60,000 search keywords on both Google and Yahoo! and about breaks even.

While he was overseeing these changes, Thys was approached by a San Francisco-based click audit company, Click Facts, with an offer to beta-test their services. Thys agreed, and click Facts went back and looked at the company’s PPC clicks for February 2006, during which the company spent $20,000 on search ads. Click Facts then reported the results to Thys: 35% of the company’s Google clicks were fraudulent in that month, as were 17% of its clicks on Yahoo!

“Google says, ‘If you suspect fraud, figure out a way to detect it on your own, present that data, we’ll look at it, and we’ll actively give you a refund,’” Thys says. “So we went through that process, worked with [Click Facts] to put together data and submitted it.”

The result, Thys says, was a boilerplate e-mail message from Google’s quality enforcement team informing him that the company had concluded, after examining his data, that it had caught those bogus clicks before he was charged for them and therefore that he had no fraud credits coming. The message contained no itemized details about the data Thys had found suspect. “They simply said, ‘Thanks for the data, and by the way, our algorithms are smarter than you, and we’ve determined these clicks were filtered out already.’”

To add insult to injury, the e-mail was signed simply “Ray”. “No last name, no phone number, no e-mail address,” Thys says. “To me that was insulting. We were spending upwards of $20,000 a month with Google almost since they started selling PPC ads. We followed their reporting procedure. Getting that kind of result didn’t sit too well with me.”

Thys pressed the issue with another letter, and Google agreed to make a more detailed report on a small slice of the data. He recently got the results of that partial analysis, and he’s still dissatisfied with the judgments Google made. “In some cases, they said we claimed seven cases of click fraud but they only charged us for five,” he says. “Other instances that they say ‘fall within the parameters of normal click behavior’ are just ridiculous, like seeing four clicks from the same address in the space of two minutes.”

Whether such patterns could be “normal click behavior” or not doesn’t matter to Thys. “I’m paying for leads, which are one click from one IP address,” he says. “So I have to start asking myself what I’m paying for with Google.”

Thys has not had a chance to press Yahoo! about the alleged fraudulent clicks on its system; he’ll do that once he has time to prep the same kind of data files he sent off to Google. As for Google, he’s still working out the proper response to his second exchange of notes and data.

Thys is not angry enough to launch yet another lawsuit, or even to sign on to an existing one. (“I really don’t want to mess with lawyers.”) He allows that some of the fall-off in conversions that Radiator.com has seen could be unintended consequences of changes the company has made in its ad creative. He’s even appreciative that Google took the trouble to take a second look at some of the alleged invalid clicks at his request.

But frustration, anger and even a tinge of betrayal creep into his voice when he discusses his treatment by Google. And he’s certain of one thing: He’s going to opt out of that $90 million settlement Google has offered in a click-fraud class action suit brought in Arkansas. “It’s a joke,” he says. “There’s no way we’ll accept that.” Under Google’s proposal, only $60 million of that amount will go to PPC advertisers, and that will come in credits that one lawyer in a Google lawsuit has estimated at $4.50 for every $1,000 an advertiser spent. The only ones who’ll be paid in cash are the lawyers.

“I’m starting to get the feeling that their entire system is built on maxing out advertisers’ ROI,” he says. “I get that it’s their game and they have the power. Their whole flag is, ‘We are the smartest computer engineers in the world, and we know things before you do.’ But they’re not open; we simply have to abide by what they tell us are ‘normal’ patterns. It’s their rules, and we’re all playing by them.”

That frustration is compounded by the realization that even after receiving what he consider shoddy treatment, his company must continue to run its PPC ads on Google and Yahoo! “We have to. They’re the only game in town, and search marketing is the second biggest channel for our online business. If I stop advertising with Google and Yahoo!, my sales are going to drop badly.”

And while he has given some PPC business to MSN and had talks with Ask.com, he’s more interested in simplifying his marketing efforts than in signing new contracts and adding new complications. “We know Google, we know Yahoo!, we understand our organic marketing and we work with eBay,” he says. “So we’ll focus on those. But when we see something that looks like click fraud out there, we’ll try to find out what’s going on.”

What would make Thys feel better about running performance ads on the big search engines?

“Calls,” he says. “I’m begging for Google to expand their distribution network with pay-per-call.” His company has run a small program on the network operated by pay-per-call provider Ingenio and seen some good results. The model makes perfect sense for radiator.com, which after all began life as 1-800-Radiator and operates its own CRM call center.

Phone calls are appealing to Thys on many fronts. For one thing, specifying radiators can be a tricky proposition requiring consultations about car makes and models; phone work rather than online forms gives an opportunity for that customer service.

And substituting calls for clicks would also help him in his effort keep that newly culled herd of keywords relevant and productive. “If I’m bidding on a bad keyword with pay-per-call, I’m going to know about it right way,” he says. “I’m going to get a call from my franchises saying, ‘These leads stink.’”