Made for Advertising sites - MFA

What do they mean to you?

What is MFA and what does it mean to you the publisher? Basically MFA is "made for adsense" or "made for advertising" sites. What this means is, a company will create a page that is basically made up of 100% ads using targeted keywords. The MFA site owner will drive traffic to their various sites through different means including Google Adwords by supplanting those very same keywords in the AdSense system with hundreds if not thousands of ads that they buy for pennies.

To break it down:

A store owner, (a.k.a Advertiser) buys an ad and determines that they will pay $1.00 per click to get customers to come to their online store.

Advertiser decides that they want to be listed on sites that use "green widgets" as keywords in their content.

Publishers write content about various things and happen to mention green widgets a few times in an article or story they write.

Through the magic of Google Adsense, the publisher's site will show the Advertiser's ad for "green widgets".

If a reader is interested in buying some "green widgets" they will click on the contextual ad displayed beside the content. They would then be redirected to the Advertiser's website.

Normally, this is a good deal for everyone involved. Contextual ads generally have good conversion rates. This means that anyone clicking on the ad is a potential customer - and if the Advertiser spends $1 to acquire a customer that will spend $100.00 for a pair of their "green widgets", they've just made a great profit. Determining your online advertising budget is no easy task and depends a lot on your profitablity, your conversion rate and your customer retention rate. The maximum cost of customer acquisition (or COCA) is an important figure in determining your advertising budget.

Now where MFA comes in is through a process called arbitrage. Arbitrage is technically the practice of taking advantage of an imbalance between two markets. In MFA terms it is taking advantage of the ability to buy cheap clicks and turn them into valuable clicks.

What an MFA site owner will do is go and buy thousands of keywords for pennies related to "green widgets" and will point all of these ads to a page containing the Advertiser's ads that the Advertiser is paying $1.00 a click for. Now to be fair, this isn't always such a bad deal for the Advertiser. The customer clicking on a contextual ad is a likely consumer of the Advertiser's product, and the MFA site (while adding a layer of clicking into the picture) gives the Advertiser the same customer that would have normally directly reached them. The only real loser is the Publisher. The MFA is using the Google Adwords system to exploit the contextual nature of keyword placement, and the ability to buy that placement for pennies a click.

Currently, the Publisher has little or no control over what ads show up on their site. So even while they are producing valuable content, the MFA is breaking the "value chain" by stealing away Advertisers for pennies. The "value chain" is that the Publisher created content that users want to look at, and Advertisers put ads in that content for people to see. The MFA contributes nothing to this process. As long as conversions remain good for the Advertiser though, Google and the MFA site will continue to benefit from this process.

Over the long term as Advertisers become frustrated with MFAs and Google, they will move on to other contextual advertising programs such as Adbrite or the Yahoo YPN program. Adbrite for example allows publishers to set minimum bid amounts on advertising space to keep MFA sites out of their networks.

I have seen many successful online publications hemorrhaging massive amounts of revenues because of MFA sites stealing their income through arbitrage. Over the short term, publishers using Adsense will continue to lose money as MFA operators become more sophisticated at keyword targeting and traffic buying. Sites that would normally earn a $5-$10 CPM are currently seeing their CPMs dive down into penny values. I encourage any publishers losing money due to MFA sites to write a letter to Google suggesting minium price settings in Adsense accounts.