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Has anyone else seen the same results with this PPC?
The fact is that $50 is not a lot of money considering how expensive Google and Overture are, so people will try just about any 2nd/3rd tier CPC program and hope that it works. That's the business model for these companies; hope that enough advertisers will 'try' them even at $50 and they make a lot of money.
Hopefully they will all be sued like FindWhat, but I don't think the legal consequences scare these companies.
There's also a whole lot of sub-syndication and cross-pollination in the smaller search engines' distribution channels, leading to questionable traffic practices like using popunders.
But unlike fraudulent traffic, even poor sources like PU or incentivised traffic can convert, theoretically. If one of the smaller engines can rein in click fraud, they'll take the first step to legitimacy, which should increase conversions significantly. As conversions rise, more trial advertisers will stay and the bids will rise to be commensurate with the conversion environment.
True, but good luck doing that. How is a smallish company supossed to compete with MSN, Yahoo and Google for good distribution partners? The answer is that they cannot.