Today was the day. I pulled all on-line advertising off. Google Ad-Words was the last place I was advertising on-line and the sales just can not justify the expense. A little background: In 2003 I started advertising on Google at first $5/day then $10/day and I got good sales, not great, but good. This continued through most of 2004 and then I came up with the idea of doubling my advertising expense, I could probably double my sales. It worked. September of 2004, I increased Ad spend with Google to $500/month to about $1500. Sales didn't double, they tripled! In 2005, the cost of advertising kept rising but the sales were not there. It got worse in 2006. Here is a number that will surprise some, Since I began advertising on Google in 2003, I've given Google $119,186 for my ads. Here are some breakdowns although not accurate since I didn't include Shopping.com, Yahoo or Pricegrabber.com ad costs which not as much as Google, are still substantial:

2003: Ad costs 7% of sales
2004: Ad costs 11% of sales
2005: Ad costs 17% of sales
2006: Ad costs 11% of sales

I didn't advertise with Yahoo or anyone else in 2003, but I did in 2004. Yahoo can suck money with no return of sales faster than a Las Vegas Casino can drain your pocket. Definitely not worth the price to advertise. Shopping.com and Pricegrabber have pretty low Returns on Investment. Shopping.com doesn't even give you a representative to talk to even though I was spending about $600/month on them in 2004 and 2005. Figure my Ad Costs as a percent of sales is probably about 4% higher for 2004-2006.

What causes this? I'm sure Click fraud has something to do with it, i.e. my competitors (of which there are a LOT) click on my ads forcing my cost to rise. For instance, every time an ad shows for Motorcycle Jackets in Google, depending on the time of year, the cost is about $0.80. This is charged to me if a sale occurs or not. So the new leather site that is competing with me clicks just 5 or 6 times a day on this ad, that's $2.40 a day or an extra $72 per month I have to spend. No let's say, they are not only clicking on Motorcycle Jacket Ads, but Chap Ads, Vest Ads, Pant Ads, etc. Figure 3 X $72 or an extra $216 per month. Now that's just one competitor!

In 2005, I signed on with a company that can monitor and check for Click fraud, for a substantial fee. How? I put a piece of code on each one of my advertisements in Google or Yahoo or whoever. When someone clicks on that ad, the service throws a cookie on their computer. When the person returns to click the ad again, the service knows recognizes the cookie and records their IP again. So what did I learn from my service? About 30% of my clicks came from the same IP with the cookies again and again. They were all AOL members or clicking from AOL where the IP addresses change constantly. I could see trends in the data that say the same computer with the same IP address was clicking at a certain time per day, perhaps 15 to 20 times in a day.

I gave the data to Google, also owner of this blog service, and asked for a refund of the fraudulent clicks. After a two week review, they determined that it was an anomaly of AOL and that no fraud occurred. The service that I paid money to wouldn't back up their service and mechanisms. So I'm stuck, unless I wanted to take on Google in court. A lot of forums said, "just figure in fraud as a part of doing business and either continue to advertise or not based on your sales and returns." Is it click fraud or not? I was approached by a person in Pakistan that for $50/month, would click on my competitors ads two hours per day, 30 days a month as a service. That is so unethical. Of course I declined.

I think fraud is now even worse than it was and I don't see it getting better anytime soon. Google claims that they screen for fraud, but I know of at least one person getting hit with a $700 tab in one evening after posting an ad that would not normally generate over $300 in clicks a month. That person was told by G that there was no fraud.

Anyway, the Ads just do not pay for themselves anymore. Google and Yahoo both claim great fraud screening ability, but I don't see it and I don't see a good results on sales anymore either. So, that's the way it is. Now that I have a brick and mortar store, I think the money spent on Google would be much better spent on local advertising.