Competing with Pyramid Schemes

Can I report them to google?

[BriGuy20]

I'm selling extremely popular and (as of now) profitable widgets (so popular that they seem to be in the news every week or so). I'm doing well with AdWords, in the 1 to 3-5 position range (1 usually with the G-Spot ads above it). My concern is that a number of pyramid scheme sites have sprung up offering free widgets. The problem is that these "free widget" sites are inevitably pyramid schemes where it is difficult to impossible to get an widget (you have to sign up for a magazine or other moneymaker deal, and/or you have to sign up about 5 friends to do the same before getting your widget). While these schemes are unsavory (i.e. somewhat misleading and only good for the people at the top), I'm not sure if they are against Google's Terms of Service for advertisers. These people are taking up good spots (IMHO) yet I do not think they deserve them, and I think many people will be suckered into these schemes without a thing to show for it. I just did a widget search, and 2 of the top 3 ads (2 of the top 4 if my ad was up) are for these schemes. Should I try to report this to Google, or should I just let it be?

[Syzygy]

I am aware that in the UK at least pyramid selling schemes are to be outlawed [pm.gov.uk]. As far as other countries are concerned, I'm afraid that I've no idea.

One would anticipate that with the introduction of the above mentioned legislation in the UK, G will have to ensure that ads promoting pyramid selling schemes are not shown to UK residents.

Certainly I would look to approach Google and find out exactly what their policy is currently, and in light of the UK situation, what their policy is going to be.

Syzygy

[stevenmusumeche]

You wouldn't happen to be selling portable music players? ;-)

[BriGuy20]

Steve:

I'm selling widgets. No specifics. :)

These widgets DID get a cover story recently, though. ;)

[mquarles]

Pyramid schemes are also illegal in the U.S.

MQ

[BriGuy20]

I do know that they are technically illegal in the U.S., but I wanted to hear from AWA or somone with close ties to Google regarding google's policy on such sites. I'd be happy to sticky a link or two.

[hobbnet]

I don't think these sites can legitimately be called pyramid schemes. Its an incentivized offer, not a pyramic scheme.

[BriGuy20]

Hob: I can see what your saying, but I don't agree with it. Quoth a popular widget enthusiast site (perhaps the most popular for this particular widget):

"There seems to be some confusion about how this site (and others) works. Let me explain. You sign up. You have to get 5 referrals. Those 5 people each have to get 5 referrals (or people to sign up) and so on.

In terms of numbers it goes like this -
1 needs 5, 5 needs 25, 25 needs 125, 125 - 625, 625-3125, 3125, 15,625, 78125, 390625, 1953125, 9765625, 48828125, 244140625, 1220703125, 6103515625, 30517578125- that's when we run out! 16 levels.

Its a pyramid.
Plain and simple.
And as such it is not permitted in the [WidgetWorld] Forums. You need to realise that you have to be one of the top 12% to actually ever stand a chance of getting anything from these schemes.
They are a con, and by signing up to them you are just perpetuating the scam and lining someone elses pocket. It is also spam. You post this info here, email your friends and family and so you are spamming for the spammer.
It is viral marketing.
Most viral marketing plans use others resources to get the word out. Members who post messages and links to sites which feature the promise of free [widgets]are relaying the marketers message for them and they are using the resources of [WidgetWorld] to do this rather than their own.

As such we will have nothing to do with them on [WidgetWorld] and members who post messages on these "offers" may find themselves being banned from this site. MEMBERS WILL BE INSTANTLY BANNED IF THEY ARE CONSIDERED TO BE CREATING ACCOUNTS TO SPAM THE FORUMS!

Remember, if it sounds too good to be true, it is..."

There are other articles that seem to take the same stance as this one. The thing that ticks me off is not only are these people taking away business from legitimate sources (such as myself), but most people who sign up for these will never get enough people to where they can get their free widget. If they DO get a free widget, they have gotten people to spend more than the price of the widget in the first place (the widget just seems like a way in, a popular product to get people to click on a banner or link when otherwise they may not). This assumes that the free widget sites are "legitimate," which they may not even be.

While my motivation is partially selfish (i.e. I'd rather people click on my link than theirs), I'm concerned about the people clicking too. I can maintain a profit with my links because people are LOOKING for the widget I sell, and quite often they buy it. IF they didn't buy the widget, I'd stop showing the ad. People clicking on these free widget offers will most likely NEVER see the widget they are looking for, which seems unfair in my book.