Full disclosure: I buy and sell ads. That’s a significant percentage of my income (10-15%). With that out of the way…

Something seems to have changed in Google in the past month. I attributed it to new hires to manage the holiday advertising boom, but my paranoid side has decided it may be something more sinister. The EU may be right about the Google Monopoly. I think I am seeing the “evil” side of the “don’t be evil” company.

First, several of my clients had issues with getting ads approved on Google. One was told he couldn’t buy AdWords against his page because it didn’t add any unique information about the product. The page was selling his product, which he ships from his warehouse. Another client waited three weeks for an ad to get approved for her day spa. The first client discovered the conversion rate was higher sending people to an Amazon Web page that he did fulfillment on, and Google turned the AdWords off because he wasn’t the page or domain owner.

A third client has a Mahalo like site for medical information. This client had been running ads directing traffic to the medical information pages, but had them turned off for being a “bridge” site, which basically means there are stub pages linked to other pages. What is particularly interesting about this case is originally the client was linking to the home page of the site and an AdWords rep suggested linking to specific medical information pages to increase the keyword relevance, which is higher on symptom specific landing pages.

Thinking this was way too many weird things for one week, I decided to create a new AdWords campaign to buy traffic to this post about Peyton Manning’s Divorce. XYHD is mostly a hobby and sandbox site. We don’t make huge money on the site, but it is a good place to test WordPress themes, Web site acceleration techniques, and vent about news items (like this article), so over at BlackWaterOps.com we like having traffic. It makes us feel good to have a few thousand people read our articles rather than ranting to the dead air. Doing an ad spend to get more traffic to an article already getting tens of thousands of visits seemed like a great way to track search traffic vs. ad traffic with regard to page views, comment frequency, and time on site. (What can I say, I’m a data geek.)

Based on the previous week I can’t actually say I was surprised when Google didn’t approve my ad to the XYHD post. I mean I was surprised, but I wasn’t. After all the other issues, I was ready to believe running an ad would get my site delisted, or get me kicked out of AdSense (totally different story about a new client who got kicked out of AdSense for changes an AdSense rep made to her site at the AdSense in Your Town event).

All of this prompted me to reach out to Google tech support. You can’t just call Google when you have a customer service issue, you have to go through its forums, or an email system that takes days to get resolution. But several things leapt out during the conversation.

The three companies currently buying advertising against “Peyton Manning Divorce” in Google search results are: Ask.com, which only has “bridge” pages; Bing.com, which only has “bridge” pages; and PopEater.com, which is doing arbitrage to recoup the ad spend with a bridge page linking to other pages via on site search. All three of these ad campaigns are against Google’s AdWords policies. So… my page with actual content, arguably mediocre content, but actual content nonetheless, should be (according to the terms of service) an amazing choice for a landing page. Instead, it was declined for “site policy” violations.

The actual ad campaign isn’t a big deal; I was likely going to lose money on the experiment, but it demonstrates something wrong with Google’s ad auction system.

When the ad auction system is working “right” bidders compete for keywords not only on price but with bonuses and penalties based on the “relevancy” of their landing page. Working with a company like BlackWaterOps.com, we help you write copy that will convince the Google engine that you are as relevant as possible for the resulting page, and while this can often save our clients up to 80% (and lines our pockets, earning us half of what we save our clients), it borders on extortion. Truthfully, ad copy for living room furniture isn’t more relevant for a sofa because we use the word sofa instead of couch in our copy, and it certainly isn’t more relevant for for an interior design campaign because we included the word couch that we were buying against. An ad campaign is more relevant if the ad copy matches the landing page copy, so that the clicks on ads are relevant to what the user clicked on.

You do get bonuses in the AdWords system based on click through rates, which makes sense because Google would want to optimize for CPMs on its search results, as well as on AdSense content partner pages, but pricing based on a computer evaluation of the quality of the landing page doesn’t create a necessarily fair market place. Imagine an auction site that sells furniture, if this fictional furniture auction only allowed bids from people with rooms the furniture would look good in, or offered a 10% discount on bids if you owned other furniture matching the piece you were bidding on. No one would come to that auction. Well maybe people with lots of red furniture looking for more red furniture…

So with selective enforcement of policies seemingly based on the amount of the ad spend, pricing based on an undisclosed computer derived formula, and first page pricing that is based on Google’s interpretation of the value of a keyword, why would anyone participate in AdWords? Because it’s a monopoly. And because of how Google’s AdSense Program works, it will stay that way. If you run AdSense on a page you can’t participate in Microsoft’s contextual ad matching service PubCenter. This means that as a site owner, I can’t run my own auction by the same rules Google does.

Microsoft would love to be a competitor to Google in the ad space, but it doesn’t have the ad inventory to make that happen, and it can’t get traction in a world where blogs and Web sites can’t test the waters with Microsoft in a meaningful way. It’s not just Microsoft, I mean I don’t want to trade one monopoly for another, but Chitika, Adsdaq, and other ad companies are all forced to not do contextual matching of ads in order to play in the market, because without sufficient inventory, publishers can’t make the switch to another provider. And without the ability to sell contextual relevancy, the ad providers can’t sell ads with enough value to the advertisers to justify competitive pricing.

In all other ways Ask, Microsoft, and other Google competitors could compete on quality of service, they just kind of suck by comparison. Bing is getting better, but there is a reason Ask.com and Yahoo.com are exiting the search business — they couldn’t compete with the Google search algorithm. The contract Google enforces on ad partners force ad buyers to use Google AdWords for advertising. That is what defines a monopoly. Winning because you have the best product isn’t a monopoly. Winning because your customers don’t have a choice due to anti-competitive behavior is.