Google Clarifies AdSense Referral Policies
Posted on 10th February, 2007
The recent changes of AdSense referral policies have caused some confusion among the AdSense publishers.
In particular, why Google allows explicit endorsement for referral ads but do not allow the same practice for AdSense ads.
Explicit endorsement means you can specifically call attention to your AdSense referral ads. You can ask you readers to click them on purpose without fear of being penalized by Google.
What you can’t do is to encourage people to click on any ad, including referrals ads for deceptive purposes such as asking visitors to click on referral ad to make you money.
What Google wants is that any endorsement to a referral ad must be done in a way that supports the intended use of the product.
Google clarifies this confusion over at their AdSense blog.
First, referral ads are credited on a cost per action (CPA) basis. This means that there is a specific action such as an install for Google Pack that your visitors must complete before you generate earnings. The advertiser places a certain value on that action being completed, and is willing to pay you a percentage of that value. If you highlight the referral ad and encourage more people to complete the action, the value that the advertiser places on that action does not diminish.
For example, Google is willing to pay up to $2 for each new user who downloads and installs Google Pack. If you encourage people to download and install Pack on your site and the conversion rate goes up, we’re happy to pay the additional cost, because it directly translates to more Pack users for us.
However, this isn’t the case for most AdSense for content and AdSense for search ads, which are served on a cost per click (CPC) or cost per thousand impression (CPM) basis. It’s generally harder for an advertiser to decide on a CPC/CPM value than it is to decide on a CPA value because multiple factors go into deciding the value of a click or impression. Encouraging clicks on these ads not only drives lower quality traffic to an advertiser’s site but provides poor data for an advertiser to make an appropriate bid on the click. This results in a poor experience for visitors and advertisers, which isn’t good for you as a publisher.
Additionally, you can endorse referral ads because you know the exact ad you are displaying on your site. You are offering your visitors genuine advice based on the products and services you think they’ll like. However, with CPC ads you don’t know which ads will show up — it would be disingenuous for you to recommend the products or services in your ads in this case, which could result in visitors being misled.