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5/02/2007
  MSN AdCenter Garbitrage

Microsoft's adCenter has really gone downhill in performance lately. Along with declines in traffic, my accounts have seen big decreases in conversion and ROI.

On April 29, adCenter sent out a notice to advertisers changing their terms of use:

We're writing to notify you that your Microsoft adCenter Terms and Conditions are updated. The changes take effect on April 30, 2007.

Some of the key adjustments to your Terms and Conditions include:

  • Microsoft may use matching criteria other than keyword searches to display your advertisements.
  • Microsoft may display your advertisements on its network of advertising channels operated by the Microsoft network of participating websites and other distribution outlets.

Basically, they are saying that your ads can now show up for any reason on any of their partners sites. So much for targeting search keywords!

Microsoft has already announced that they are testing an AdSense competitor, so this change certainly enables them to show your ads on content sites with some type of contextual matching.

However, Melissa M. from the SEM2 discussion group also points out that she's seen Microsoft buying IntelliTXT ads, and routing the clicks to a landing page of adCenter advertiser ads.

MSN is actually running Intellitext ads on content sites, sending visitors to a Live search page with adCenter ads on it. We saw a spike in clicks on a handful of keywords on 4/30, with no resultant increase in conversions, and I attribute it to this garbitrage by MSN.

She calls that Garbitrage. Which captures it perfectly. Check this thread for more details.

So I see a few big credibility problems for Microsoft stemming from this:

  1. A major TOS change with basically no notice. You could almost call it a "zero-day exploit".
  2. Funnelling low-quality untargeted traffic to search ad customers campaigns.
  3. Overall desperation and drop in traffic and performance.

It's hard to believe how bad Microsoft is at this whole thing... but they are, and I expect them to lose even more accounts as people see this junk get reflected in their stats.

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