I know it's taken a while, but I've finally understood what this "click" advertising is all about.
One of the biggest headaches facing any small business is how much to spend from your preciously small budgets on marketing and advertising, areas which traditionally have never managed to demonstrate substantively any return on investment. As I’ve found out on many occasions, relying on word of mouth is a waste of time. Leaflets? Why damage the rain forest?
Yet we all know that a certain amount of paid for exposure is vital. How to pay for it, that’s the problem. Advertising on television and radio, newspapers and magazines and billboards is hugely expensive. Most small businesses cannot even think about national exposure.
But then along came the internet. International exposure at a fraction of previous cost. So most small businesses invested in websites and hoped that when people searched the worldwide web, it would be their business that would pop up on their screen.
But these days such an approach is not much better than word of mouth.
So "click" advertising was invented. Brilliant, because you don’t pay unless someone clicks on to your advert (that’s what those little boxes on the right hand side of search engines like Google and Yahoo! are for, I realise now).
It makes the advertisement much more prominent and focused than the straightforward search. You can, in theory, pay as little or as much as you like. You bid for certain words, like Iain McKenzie of MEM Capital, a financial services company in Bicester, Oxfordshire.
He would bid 55p per word for a selection of keywords with Overture, the company that deals with this form of advertising for Yahoo!, and he was quite happy when his spend amounted to between £100 and £150 a month.
Then, over the Easter weekend, Overture charged him more than £17,000.
The charges only stopped when his credit card refused to pay out any more. And MEM’s case provides a salutary lesson for other businesses when it comes to this form of advertising.
What had happened was that Mr McKenzie changed the keywords that trigger these adverts. He entered them on to Overture’s website on the Monday before Easter, they were checked by Overture’s editorial team on the same day and entered on to the web on the Thursday night before Good Friday.
When Mr McKenzie got back into the office on the Tuesday after Easter, he found the company’s bank account was empty.
"I entered 200 new words into the Overture site and all of them were at 55p each," he says. "These 200 words would go on to five pages. But Overture say that the three middle pages were blank and in the small print of the contract, if you leave a page blank it defaults to the highest bid anyone else has made for the word.
"The highest bid for some terms including the word ‘loan’ is around £7, which meant that whenever anyone clicked on our site over Easter from the search service, on some terms we were paying up to £7. I know I entered them all at 55p and left none blank. But I can’t prove it."
Mr McKenzie maintains that Overture ought to have realised what was happening and stopped it. He had never bid more than 55p before, so why go to the highest amount now? He believes that his case is further strengthened because the words on pages one and five were all bid at 55p.
But he says Overture claim their system provides that you cannot leave a page blank without meaning to. Again, surely Overture’s editorial checkers should have realised there were three blank pages and done some checking with MEM? And surely the fact that blank pages can be very expensive ought not to be left to just the small print?
Couldn’t there be failsafe devices on the website when you are entering fresh words, say asking you if you intended to leave pages blank and a box that needs to be actively checked by the trader to say that he is aware of the consequences of leaving them blank?
It’s all been a very expensive lesson for MEM. "We’ve been going for about 18 months," Mr McKenzie says. "Had this happened a year ago we would have been put out of business. Overture say the fact that blank pages default to the highest bid is in the small print of the contract but I haven’t found it yet."
What I’d like to know from you is: was Mr McKenzie just unlucky, or are there other people out there in cyberland who have similar experiences?
