Lawyer files class-action against Google Adwords

[Bryce]

Somebody posted this in the "domains names" section here (???) but the discussion is more applicable in this folder. Here's the scoop...

Source : http://www.informationweek.com/news/...leID=209100234

Google on Friday was sued for fraud, business code violations, and unjust enrichment, claims arising from the company's alleged sale of low-quality ads.

In the parlance of online marketing, "low-quality ads" refers not to shrill infomercials but to ads that generate a poor response or show a poor conversion rate due to problems with placement, audience targeting, or related factors.

The class-action lawsuit was filed in U.S. District Court in San Jose, Calif., by lawyers from San Francisco-based Schubert Jonckheer Kolbe & Kralowec. The plaintiff is attorney Hal K. Levitte, who advertised his legal services though a Google AdWords pay-per-click campaign last year.

According to the complaint, the "Levitte International" online ad campaign ran from June 1, 2007, through August 18, 2007, and received 202,528 impressions from parked domain pages -- placeholder Web pages with auto-generated links related to a pre-determined search keyword or the hosting domain name.

Google (NSDQ: GOOG) runs an advertising program called AdSense for Domains that seeks to make money off of parked pages. "Parked domain pages generally have no content; however, by adding targeted ads, we hope to help users find what they are looking for," Google's online documentation explains. "Using Google's semantic technology to analyze and understand the meaning of the domain names, AdSense for Domains delivers targeted, conceptually related advertisements to parked domain pages to improve the user experience on these pages."

Despite Google's semantic technology, the complaint states that the ads Levitte placed just didn't work. Out of the 202,528 impressions on parked domain pages, Levitte got 668 clicks and zero conversions.

Levitte's ads also appeared on error pages, through Google's AdSense for Errors program. With 1,009 impressions, 25 clicks and zero conversions, he had little to show for it.

"Domain and error page ads accounted for approximately 16.2% of all clicks on plaintiff's ads during his campaign, yet did not result in a single person completing the online form on the site, or contacting the plaintiff by phone or e-mail," the complaint states.

Levitte spent $136.11 for ads on parked domains and error pages, which works out to 15.3% of his $887.67 ad campaign.

In seeking class certification for the lawsuit, Levitte's attorneys hope to represent other aggrieved Google advertisers. "We believe it's a problem that affects all [Google's] advertisers equally," said Kimberly Kralowec, partner at the law firm representing Levitte.

If the lawsuit moves forward as a national class action and it turns out that all of Google's AdWords advertisers have spent a similar percentage of their ad budgets on low-quality ads, Google could be liable for a significant sum.

"Google includes millions of parked domains and error pages that have little or no content, and that result in practically zero conversions, in both its Content Network and its Search Network," the complaint alleges. "Given the low quality of these parked domain and error pages, advertisers would not want to spend their advertising budgets on these distribution networks. However, Google designed its network in such a way that it was virtually impossible to opt out of the AdSense for Domains and/or AdSense for Errors programs."

The complaint states that while Google allows advertisers to decide whether to place ads on Google Search, Search Network, or Content Network, there's no setting screen that allows advertisers to opt out of the domains or errors networks.

The situation changed somewhat in March, when Google altered its Site Exclusion Tool to allow advertisers to identify entire Web site categories where their ads would not appear (previously sites had to be specified individually). But the complaint claims that the Site Exclusion Tool only allowed opting out of the entire Content Network, not out of the parked domain or error pages.

Google has made further changes since then and advertisers can now find out more information about how ads on parked domains perform. Kralowec, however, said that Google hasn't fully addressed the issue though adequate disclosures and visibility into its ad system.

Google did not respond to a request for comment.

LOL, I love the last line "Google did not respond to a request for comment."

[wowhaxor]

sounds like lawyer dude shouldve learned about adwords before just running campaigns and spending money. adwords works great if you know what you're doing!

[RankSurge]

...but it's news like this that puts a damper on the Domaining Industry...

[danimal62]

Could he not have just opted to not have his adds shown in the content network?

[Bryce]

Read the article, the whole premise is that Google Adwords didn't make the information about the opt-in readily available. IMHO, the guy has a valid case here.

I know I'm ticked off as an Adsense publisher that Google has a double standard regarding parked domains when the explicitly state that publishers can't place ads on sites with little or no content.

[shallowink]

Sounds like he's just trying to cash in on google. He ran the ad campaign for 3 months, bad results. He stopped it. Google lost his business. Why can't people just let the market work? It isn't like google promises conversions, just click throughs. Rest is up to the advertiser.

[wowhaxor]

Originally Posted by shallowink

Sounds like he's just trying to cash in on google. He ran the ad campaign for 3 months, bad results. He stopped it. Google lost his business. Why can't people just let the market work? It isn't like google promises conversions, just click throughs. Rest is up to the advertiser.

and in fact I've heard the last 3-4 months people with crappy traffic - low to no conversions - are actually being dropped from adsense. I agree with you though, if it doesnt work for you find something better if you cant build something better or shut up.

[Bryce]

That's not the point and btw, the site he was advertising is pretty horrible looking so it's no wonder he didn't get any conversions. The point is that Adsense for Domains and Adsense for Errors are shady schemes that Google is using to monetize domains WITHOUT content.

Does anybody here get the conflict of interest and the lack of ethics on Google's part regarding these two abominattions ?

Nobody is disputing that traditional Adwords are a great thing, the issue at hand is Google profiting from something they are adamantly opposed to. It's a double standard and it's indicative of Google's lack of ethics these days.

[danimal62]

I dont know, I found it pretty easy! Seems the guy is just looking for check!

[shallowink]

Sorry, but we will have to disagree. The point is, this lame lawyer can't figure out how to market on the web and blames google.

And you have an ax to grind with google over domain parking. It doesn't matter, it is their choice to do so or not. Seems everybody has a high expectation of google as a company and they forget they are a company, they are in this to make money. There's nothing which says they have to be perfect.

[ShaneC]

Originally Posted by Bryce

That's not the point and btw, the site he was advertising is pretty horrible looking so it's no wonder he didn't get any conversions. The point is that Adsense for Domains and Adsense for Errors are shady schemes that Google is using to monetize domains WITHOUT content.

Does anybody here get the conflict of interest and the lack of ethics on Google's part regarding these two abominattions ?

Nobody is disputing that traditional Adwords are a great thing, the issue at hand is Google profiting from something they are adamantly opposed to. It's a double standard and it's indicative of Google's lack of ethics these days.

This is not a double standard issue. Your argument is run by the idea that "if I can't do it, then no one should be able to".

Do you realize what would happen if anyone with a Adsense account was legally able to put ads on a site without content? Google has established a standard of control over who can, and who can't use Adsense For Domains, and Adsense For Errors. This is a basic standard that goes hand in hand with any type of business, it has NOTHING to do with the lack of ethics, nor is it a double standard.

Don't forget that publishers are also profiting from Adsense For Domains, and Adsense For Errors, not just Google.

[mtime88]

Originally Posted by Bryce

That's not the point and btw, the site he was advertising is pretty horrible looking so it's no wonder he didn't get any conversions. The point is that Adsense for Domains and Adsense for Errors are shady schemes that Google is using to monetize domains WITHOUT content.

Does anybody here get the conflict of interest and the lack of ethics on Google's part regarding these two abominattions ?

Nobody is disputing that traditional Adwords are a great thing, the issue at hand is Google profiting from something they are adamantly opposed to. It's a double standard and it's indicative of Google's lack of ethics these days.

I 100% agree with you. Google does not let publishers put adsense on pages with no content, yet they do it themselves. Not right at all.

[Bryce]

OK, evidently most of you see no problem with people squatting on domains and/or most of you must be playing the parked domain game. Personally, I don't care about domain speculation as far as buying and selling domain names goes but this whole concept of buying domains just to park them is a scourge to the internet and it's propagated by lazy people who want something for nothing. Google is cashing in on your apathy.

@ShaneC - I own over 90 domains and each and every one of them was bought with the intention of developing and all of them have some original content on them. I will never agree with buying domains just to park them and I totally disagree with anybody that thinks monetizing domains with no content is a viable source of income.

and btw, Shane, I'm currently earning more than enough per year from various affiliate programs (including Adsense) and from my offline investments. So please read what I'm saying and stop trying to pretend you know me or what I'm thinking because you're sadly wrong.

[snowbird]

I totally disagree with anybody that thinks monetizinf domains with no content is a viable source of income.

Parking domains can be a good and steady source of income. I have domains with over 95% type in traffic, and the traffic has been stable for 10+ years. No search engine rankings or backlinks are required. If its making me money, and not hurting anyone else, then why is this wrong? Because someone could develop the domain? Hardly. We all could go around and find domains with crappy content and claim we have a right to them because we could do a better job.

Until Eminent Domain laws are created for domains, I will continue to leave some of them parked until I decide to develop them (if ever).

[skins4webs]

Maybe, he just had a product that nobody wanted

Good luck anyway.

[ShaneC]

Originally Posted by Bryce

OK, evidently most of you see no problem with people squatting on domains and/or most of you must be playing the parked domain game. Personally, I don't care about domain speculation as far as buying and selling domain names goes but this whole concept of buying domains just to park them is a scourge to the internet and it's propagated by lazy people who want something for nothing. Google is cashing in on your apathy.

@ShaneC - I own over 90 domains and each and every one of them was bought with the intention of developing and all of them have some original content on them. I will never agree with buying domains just to park them and I totally disagree with anybody that thinks monetizing domains with no content is a viable source of income.

and btw, Shane, I'm currently earning more than enough per year from various affiliate programs (including Adsense) and from my offline investments. So please read what I'm saying and stop trying to pretend you know me or what I'm thinking because you're sadly wrong.

I have never bought domains with intent of parking them for money either, and I too also have a great deal of domains, 130 to be exact. I don't bother setting up parked ads on them, because I rather put my time into developing the sites, and have them generate legitimate search engine traffic. However, I'm not going to judge the people who are doing it, because honestly I don't care. Obviously that is where our opinion differs.

Your financial status, and level of success have little to do with the subject. I was simply stating my argument against your claims that Google has created a double standard. Not once did I "pretend to know you", I asked one question, and said what I thought your argument was based on. I'm allowed as a thinking individual to draw my own conclusions.

[Bryce]

Originally Posted by ShaneC

I'm allowed as a thinking individual to draw my own conclusions.

Of course you're allowed to draw your own conclusions, I merely stating the fact that your assumption was incorrect.

Now that we're all clear on that...

The FTC has guidelines regarding "bait and switch" advertising, which is essentially what Google is doing with Adsense for Domains.

If you read the heading of the article...

A class-action lawsuit alleges that Google committed fraud, business code violations, and unjust enrichment by selling ads that were unlikely to generate conversions.

...the lawyer who filed the suit is obvious aware of the FTC's "Truth in Advertising" laws and clearly sees a loophole that Google is exploiting because they are internet based.

For example, in the Television advertisment industry (which also falls under FTC guidelines) a television station is not permitted to sell advertising on "dead air space".

Imagine if your company advertised with WKXX, a local television station in Peoria, IA and when their daily broadcasting was complete, they put up their little "off-air" graphic and an hour later they started running your ads every half hour in the middle of the night when nobody was watching. You'd be pretty pissed when you got your statement with the details.

This is essentially what Google is doing with these two programs. They're selling "dead air space" and it is definitely a 'bait and switch" tactic to lure people to a site and then switch them based on advertising.

The FTC regulation also applies to internet advertising and Google is going to take it on the nose with this one because no matter how anybody tries to sslice and dice it, it's still a blatant violation and I wouldn't be at all suprised if the FTC took action against this shady business practice.

[Bryce]

Originally Posted by skins4webs

Maybe, he just had a product that nobody wanted

Good luck anyway.

His site is pretty awful -> http://levitteinternational.com/

Would you be tempted by that ???

[Faint]

I think that this guy is trying to make up for his loses due to inexperience in online marketing. He could have easily dropped the content network (which was part of his failure), and this would have never happened.

It's going to be interesting to see how this turns out.

[shallowink]

It's not dead air, he got click throughs. He didn't convert them. That part is cut and dry.

Bait and switch would entail switching products. Which google did not do. They sold him ad space and he got ad space.

And from your example, you could position that argument against any domain parking setup. Problem there is, the people who are "lured" do so because they click the links. And they aren't paying for the ads. So that argument is invalid as well.

Domain parking isn't something I do or would do. I don't see it as a long term viable method. But lynching google for it would be silly. We don't even know the details of their domain parking setup. Odds are its just a minor aspect of a much larger corporation. Or something they acquired from one of their buyouts.