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Chitika Audit Issues

Posted By Darren Rowse 2nd of December 2005 Chitika eMiniMalls 0 Comments

Wow – I woke up this morning to an inbox full of emails with the word ‘Chitika’ in the subject line. Most of them from publishers concerned with yesterday’s audit where their earnings were reduced – in some cases significantly.

Jensense and Performancing both write critiques of the process and discussion forums are alive with Chitika publishers talking about the vast variation in reductions in the audit. These range from what I can see from 8% reductions up to a reported 70% from what I can see.

Chitika explains the auditing process on their support area with the statement:

‘Every month Chitika audits the clicks that we receive from all of our publishers sites. In the audit process we remove any invalid clicks such as: repeated clicks from the same ip, clicks from countries such as China and India, etc. This is done to protect our advertisers from fraudulent clicks.’

I had a chat with someone in Chitika management this morning about yesterday’s audit and it seems that the reason why publishers with the largest reductions were audited so heavily was primarily for reasons of traffic from non accepted countries.

This fits with my own anecdotal evidence as I’ve interacted with a few publishers in the last 24 hours who when I’ve asked them about the source of their traffic have told me that they get similar percentages of traffic from Asian countries.

My own reduction in this latest audit was around 13% in my own direct earnings and around 40% of my referral earnings. This makes sense to me as most of my traffic on the sites I have featuring eMiniMalls is US, Australian and European but I know ProBlogger (which is where most of my referrals come from) has a higher Asian readership.

So – the question of what to do about Chitika is one many people are asking me:

Here are some thoughts that come to mind:

1. Firstly keep working on your optimization of your eMiniMall ads – I continue to see publishers using all the default settings which would be limiting performance. I’ve written about optimization techniques here and here.

2. The advice I was given by the Chitika rep this morning was to make the most of the new alternate ads feature that was announced yesterday. The whole reason for this feature is that if you have traffic from a non accepted country your ad space will be redirected to a more effective ad. For example I know one Chitika publisher with a lot of Asian traffic that is setting up his Chitika ads to show ads from Amazon Japan as an alternate ad. Smart move.

3. While I see a lot of people saying they’re going to leave Chitika I’d be careful about over reacting. Yes it may be valid to leave completely – but I’d be much more inclined to keep it running in conjunction with other ad systems and keep experimenting with ad positioning and optimization. If you’re getting audited right down to nothing then it might be time to move on – however even with large audits you’re still earning something from it and I guess then comes the decision about what else you could be running in those positions and if they’ll perform any better. If you can find something else to work better for you in certain positions I’d go with those options – but you might also want to consider putting Chitika in other spots.

Here’s a tip for Chitika. I think it would be a wise move to have a faster auditing system. By faster I’d suggest to work hard at building it into the daily statistics so that publishers are not presented with one figure only to have it reduced a month later. This is what Google does with their stats – they have smart pricing procedure that seeks to protect advertisers that none of us ever know the results of. Of course they have vast resources to throw at such a system that a start up like Chitika does not have – but it’s something that I hope Chitika will move towards.

Lastly I’d like to echo the thoughts of Andy at performancing who finishes with his post with a balanced and perceptive paragraph:

‘Getting an ad network up and running (with sustainable growth) is a monumental task, and it doesn’t surprise me that eMiniMalls is having issues. Even with these issues, they’ve come a lot farther than any other recent second tier ad network, and for that, I commend them. My question is, will they do what they need to do to work these things out and become a major player?’

I think Andy’s wise here. I suspect that getting any ad network up and running is a real juggling act of getting the formulae right between advertisers and publishers. Hopefully every time an issue raises it’s head they are one step closer to a solution that all can benefit from.

Update: I’d be interested to hear what people’s audits were like. Don’t mention specific numbers – but what kind of a decrease did you see? While there is talk around of publishers losing 90% I wonder what the average is. The big decreases get all the press and attention but what about average Joe chitika publisher?

I’ll start us off. My decreased earnings were 13%, a couple of percent more than the last two months. What was yours?

update 2: Chitika have just started paying October’s earnings to publishers via paypal (and cheque if you earn above the $10,000 paypal limit). Publishers earning above $600 for the month are being to fill in a W9 or W8 form for the US IRS and to fax it back to Chitika).

About Darren Rowse
Darren Rowse is the founder and editor of ProBlogger Blog Tips and Digital Photography School. Learn more about him here and connect with him on Twitter, Facebook, Google+ and LinkedIn.
Comments
  1. I think it’s very foolish of people to complain and threaten to jump ship so soon after Chitika Eminimalls have started up. They’re not long out of Beta. It’s too soon to make a judgement.

    Shouldn’t people be concentrating on producing content for their blogs and making sensible use of ad space / alternate ads rather than spending huge amounts of time discussing it?

    On that note… Chitika stays… back to writing content…

  2. Well said Andy – improvise, adapt and overcome.

    Only the weak stand around wailing and blaming others.

  3. I am seriously considering dumping Chitika ads. Adsense is good and better. At the end of day your traffic from Google goes down because of new ad system and then chitika at the end of month dump us with 50 – 60% reduction
    What you suggest Darren? Wait and see or just dump them…

  4. I only saw about 7% cut.

  5. 50% exactly.

  6. I lost about %10.

  7. Thomas says: 12/02/2005 at 9:13 am

    Approx. 19 percent.

  8. A drop of about 20% on a low traffic site where the readers are roughly 50% US and 50% UK. So not an unexpected amount to go down by.

  9. Mine was reduced by about 16% but I only made peanuts for October. I will be waiting anxiously for the November audit as I have made significant steps in optimization and my earnings went from 1 digit to 3 digits per day.

    I am still onboard with Chitika but have taken the referrals down from my sites. I will feel better recommending Chitika once the system gets better.

    Maybe Chitika could start bi-weekly audits and move to weekly and then daily audits as their resources grow. I agree and understand that starting an ad company is no small task but I also know that too much bad publicity can come around and bite you in the back.

  10. 15% cut with about 10% of trafffic coming from “fraudulent” countries. In November I doubled my Chitika unaudited earnings, mostly by optimization of adds (just a slight increase of traffic).

  11. Alrighty, after venting earlier on in one of my posts if had another look at the whole situation and have been reading up on it too. I guess the quoted 90% is a quote from my post in this sitepoint thread (http://www.sitepoint.com/forums/showthread.php?t=322419&highlight=chitika)…and after recalculating everything I can say that the cut was an exact 96,28%. In another context I would be really proud to be quoted all over the blogosphere, but not in this case as you can imagine.

    My conclusion (without having any insight into the inner workings of the audit process) the following things are sure IMO:

    1. My sites don’t receive invalid clicks in the common sense (or at least nothing out of the ordinary)
    2. I’ve optimized the ads as best as possible using the hints of you, Darren, and other experts.
    3. There’s a good possibility that there are >1 clicks per IP as I’ve got many returning visitors (daily)…so they will be substracted…okay.
    4. The main chunk of the substracted clicks would have to be clicks from unsupported countries (if I can trust Google Analytics) a rough estimation would be 50% unique visitors from US + Europe, the other 50% ranging from South America, China, and the Mideast – and I guess these are all considered “invalid” and substracted.

    So, if you combine 3. + 4. I guess that you can cut the unaudited numbers in half, maybe even chop of 60%…that said: substract another “usual 10%” and you’re near the true numbers I’m looking at.

    So, does this make the situation any better for me? Not really, but at least I know what’s going on now…although it’s a little bit weird to put on the sherlock holmes hat and go “fact hunting” to get behind this…especially if you’re looking at an ad-provider like chitika who doesn’t support you in the whole process left alone in the whole “audit scandal”…on a brighter note: now that they’ve done their homework (with the whole alternative ad functionality) it’s possible that the numbers will be more real-life than fiction…although this is still no excuse for two months of served ads without proper payment (after all november is already down the drain as I think the cut will be similiar right there).

    Bottom line:
    1. Don’t let your customers (in this case the publishers) in the dark for two months or at least stop wondering why there’s all this uproar everywhere and try to explain the situation (why do they have a blog again?)
    2. Work on a quick solution of more uptodate stats (if not daily then at least weekly)
    3. If you can’t handle all the buzz, don’t take on all those publishers just to leave them back unsatisfied!

  12. If Chitika is saying that clicks from some countries are not wanted then they should be able to detect it and put up a public service ad or something similar. To count the click and then take it away is only asking for Public relations nightmare.

  13. My cut was substantial. 38%. Although it’s better than 90% I’m still not pleased at all. What’s the point of even letting us know what our unaudited traffic is in the first place? The only thing that does is set people’s expectations falsely and ultimately creates unhappy clients. Chikita seems to be their own worst enemy right now with this, whether their reasons are good or not.

    I don’t understand why this stuff isn’t thought out before launching… Ingoal makes a fine point: “If you can’t handle all the buzz, don’t take on all those publishers just to leave them back unsatisfied!”

    The best thing you can do is pay someone well for their efforts. The worst thing you can do is take it back.

  14. Update: just received my first payment from Chitika via PayPal.

  15. My adjustment was a mere 3% but earnings were small for October and most (95%+) of my traffic is US based.

    While this does appear to be a PR disaster, they’re a still a small outfit so publicity is always nice, even if it’s negative. They have time to turn it around…

  16. shouldn’t all this stuff have been sorted out while in beta?

    Are they still in beta – I see a few references to beta remain…

  17. Christian says: 12/02/2005 at 10:39 am

    50%, CPM down to about 1.00, I’ve removed them, it’s an insult; my traffic is European and North American – mainly physicians… what a waste.

  18. I haven’t had much in the way of appropriate use for eminimalls (since they don’t have mortgage, real estate or financial content at all), but I have a couple of thoughts as a disinterested observer.

    1 – If they don’t accept clicks from a specific country, they need to not serve ads to those IPs. Send them to alternate URLs or leave them blank. The ability to do this is all in their court and then they won’t generate the bad clicks – and unrealistic publisher expectations and bad blood – in the first place.

    2 – If they only accept 1 click per IP, I wouldn’t use them in a big way. I want repeat visitors and I want repeat visitors who also patronize my advertisers – not just once, but regularly. Perhaps I’m misunderstanding and this is 1 click per advertised product per IP per site, but it it’s 1 click per IP per site they are basically stealing the clicks for the second, third and so on advertised products.

  19. Yep – that’s why they’ve introduced the alternate ad feature Tom. Hopefully it will be helping some bloggers.

  20. 9% on small numbers

    That said, three weeks of Chitika in Oct, matched what I made in four weeks on Adsense. So I have no reason to complain.

  21. My audited revenues were about 19% less than my unaudited. This was my first month with audited revenue, so I don’t have much to compare it to.

    Losing 20% isn’t wonderful, but on the other hand I didn’t displace my adsense ads — I supplemented them with the Chitika ads, so anything is an improvement over not having them.

  22. […] I imagine I’ll give it another month and see what happens. Darren Rowse spoke with a Chitika representative who explained the reasons for the auditing, and a large component was for ads clicked from invalid countries. Most sports bloggers should make out okay in this respect as I’d imagine most readers are from North America. […]

  23. Umm, going against the grain here. My audited revenues went UP 4%. I’m just starting out, and my overall revenue was low. They bumped it on the 7th and part of the 8th when they were having problems, but did it again on the 30th. Go figure.

  24. At least I have a extra income.
    http://milcarros-1.blogspot.com

  25. […] But what has really got some people going is their ongoing Auditing process, where without notice they take a percentage off from your earnings for various reasons – read more about it at ProBlogger. […]

  26. I save a 35% decrease in mine this was my first month so I’m not sure what to expect only had about half the month so was not much anyway.

  27. […] 1st, 2005 and is filed under News Brief. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently notallowed. […]

  28. I had a 50% reduction in October. My first reaction was to remove Chitika, but then two things happened:

    1) I read a post from their blog about the alternate ads.

    2) I received my payment through PayPal.

    So, I finally decided to keep Chitika.

  29. Well, I actually had an INCREASE in my audited figures over my unaudited figures … Due to the 2005-10-07 date being added to the audited figures, and it was missing from the unaudited figures

    Yup .. my “single digit audited figures” were higher than my unaudited figures *sniffling*

  30. Overall, my earnings were audited by 23.9%, but I expected a rough ride since my biggest chitika earning site had a ton of traffic from Japan due to a Slashdot.jp link and subsequent links from a bunch of Japanese blogs and forums.

    Still came out on top for the month of October though.

  31. We lost 32%. We also have a disproportionately large AOL readership.I am wondering if the reductions were because of the AOL proxies?

    That scares me a bit.

  32. I received my payment this afternoon and it was a 10.77% difference. I also did not remove the Adsense ads that I already had, and they continued to perform about as they always have. Of course, I am small time and have yet to cross the $100 threshold with AdSense, so in reality, I’ve not got paid for that yet, while I HAVE got paid for my Chitika ads. I think for the small guys especially, Chitika ads are great.

  33. Tom Hanna has a great point on this:

    2 – If they only accept 1 click per IP, I wouldn’t use them in a big way. I want repeat visitors and I want repeat visitors who also patronize my advertisers – not just once, but regularly. Perhaps I’m misunderstanding and this is 1 click per advertised product per IP per site, but it it’s 1 click per IP per site they are basically stealing the clicks for the second, third and so on advertised products.

    What is the deal with how the clicks are calculated. If I have people curious and clicking the ads, I have done my job. Conversion is the job of the website I have sent traffic to. My job was to get them the traffic.

    If they are seriously limiting it to one click per ip, they are in a sense stealing from me. It is like they are calling me a thief and unscrupulous, when I have done my job with the advertising.

    If I was clicking all of the ads from home, that would be different, but if I design my site that drives people to the ads according to the terms and conditions, then they are taking money from me whenever they do not pay me for a click.

    Ugh, this is starting to get my dander up.

  34. Mine is 30% cut, quite shocked at first glance. However, there seems be many publishers out there whose cut is more than mine. Anyway the payment has been received, thanks Chitika! Will continue to push on it since it’s still in beta, and bear in mind that products in beta do have some issues. Hope Chitika can turn it better soon :)

  35. Hillarious… this is another internet scam and people are suggesting not to jump ship? They got greedy and realised they could rip us for tens of thousands without anyone caring.

    You’ve all been taken.

  36. Why can’t Chitika recognise that the internet is worldwide, not just the US? If they are so concerned with “invalid countries”, why don’t they filter out the display of ads from their end and become an enclosed protectorate in an internet that is worldwide in nature?
    If I can block whole countries from accessing my server, so can Chitika!

  37. AhmedF says: 12/02/2005 at 5:34 pm

    95% US+Canada traffic, 43% cut.

  38. Sam Reese says: 12/02/2005 at 5:43 pm

    I’m surprised you (and others) didn’t see this coming, Darren. It sounds pretty classic. All those “Wow! Way higher payouts than Adsense!” comments didn’t set off warning bells in your head?

  39. 40% cut, which is much, much worse than expected. Not sure how long I’ll keep them.

  40. “this is another internet scam”

    Hmm, funny, I’ve been burnt twice by Internet scams (when I was not clued up) and I lost money and never made any.

    Now lets’ see – Chitika – hmm it’s FREE and I’ve been PAID.

    Yeah, that sounds like a REAL scam to me.

    (oops, forgot the sarcasm tag)

    C’mon Danny get real – if you don’t like the system don’t use it – but don’t go around calling legitimate programs a ‘scam’ just because they’re fine tuning. I suppose it’s easy to pick on the startups. Didn’t you get any money? Oh boo-hoo – go and optimise, learn how to make money like the professionals do. Don’t badmouth things you don’t understand.

    (darn forgot the rant tag too)

  41. Sam – the fact is that I still don’t have warming bells with eMiniMalls when it comes to my own sites. They’re still earning me double than Adsense each day even taking the audit into account.

    As far as this being a scam – Andy M is right on the money. It’s not cost me anything, they are sending me money each month in larger amounts than any other ad program – the ads are adaptable to my site…. to me that’s not a scam.

    What I see is a company who is still in start up mode – developing a product with real promise. Yep they’ve made some mistakes and are learning some lessons the hard way about dealing with publishers and advertisers – but they’ve actually put something pretty worthwhile together.

    What I also see is a lot of people reacting out of hurt and perhaps throwing the baby out with the bathwater. I see people accusing this start up company with some pretty horrific things without acknowledging that the product itself does have some things going for it amidst it’s problems.

    Lets acknowlege the problems but try to keep some perspective on this.

  42. True, Darren, some people are really upset with the situation and are making accusation all around the blogosphere and I fully understand your position, at least I think so.

    I think you can sum up the whole situation with some of the following points…

    Dear Darren:
    1. It’s obvious to me that you’re satisfied with chitika
    2. It’s NOT true what many people claim around the blogosphere (that you’re only reporting the positive sides of chitika and lie about the situation)!
    3. I understand that you aren’t jumping to any conclusions and don’t want to take sides as you don’t experience the same problems – apart from the fact that it wouldn’t be a good idea on both the personal and business side – as you’re doing good business with them, raking in MAJOR cash at the same time (an old german saying for situations like roughly translate into “…don’t saw off the limb you’re sitting on…”).
    3a. It’s a difficult situation for you and I understand that you’re annoyed at some of the things spreading around the blogosphere (“…Darren in bed with Chitika…” type of stuff), but jump to 4.
    4. You gotta admit that people get suspicious or jump to conclusions if there MIGHT BE something going on. In this case what’s going on is that there seems to be an (obvious) business relation with you and chitika (your link on their blog, they linking to your wrap-ups, you speaking with representatives when most people can’t seem to get a hold of anyone with them, etc).
    4a. This is quite natural as you’re, at least I guess so, one of their premiere publishers, on the other hand it could seem to some people to be an “You scratch my back I’ll scratch yours”-type of relation as you’re promoting their product and they’re sending (referral) traffic to your website…

    To all the others, especially the annoyed publishers:
    1. As you should know by now I’m one of the annoyed people, but I try to stay reasonable and I abstain from making any false claims that I can’t back up…so should you…but noone can prevent you from playing through some scenarios…
    2. Calling people liars doesn’t help the situation in any way…
    3. What would you do if you were in a good position, like Darren is in? Comment? Join in on the raging mob? – I don’t think so…

    To Darren and all the others:
    1. The alternate url feature will help improve the situation..
    1a. Why now though? Why not months ago…I know it’s water under the bridge now, but I still can’t stop to wonder…especially as this particular problem (not serving ads to unsupported users) isn’t exactly rocket science…
    2. If you’re so annoyed that you don’t want to stay with them, fine…if you want to stay with them, fine. I still haven’t made up my mind completely as I’m still too annoyed at the prospect of another “wasted month” (november)…
    3. The eMiniMalls as a product are a good way to either be the main building block of your ad-chain or a supplementive block…nontheless chitika needs to get things in order pretty soonish: what’s the big deal with (at least next to) real time stats? If you ain’t got enough computing power invest some and buy some decent machines for yourselves!
    4. If chitika as a company has learned one thing from this whole discussion (I’m not sure if they’re even fully aware of it or even care) it should be that: You can’t screw over your publishers, especially not with all the circumstances (showing ads all the time, MAYBE cashing in with the advertisers, then not paying your publishers) and you guys certainly need a PR guy who’s aware of the blogosphere and the whole online world as I haven’t seen any official statements yet…*side blow with a grin* Darren comes to mind ;-) */side blow with a grin*
    5. One point is open though: if they can just axe your earnings by up to 96% now, what keeps them from doing it (in a smaller frame, let’s say 1% on all accounts) in the near future? Something like this doesn’t make a (young) company look really trustworthy, or does it?!
    6. Like it or not, even if it’s mostly (if not nearly all) bad press…you know the old saying…bad press is better then no press…

  43. I received my Paypal payment and there was a 20% cut. It does seem a little ridiculous that you don’t actually KNOW what you’re going to be paid until a month or so later, but what do you expect? They’re clearly still “working” through some things as most times you have to wait until the next afternoon to learn what you earned for the previous day.

    I am keeping them up because they do earn more than Adsense and the quick payment is an excellent perk, but Yahoo clearly blows both out of the water.

  44. My cut was about 40%, and I also got paid via PayPal.

  45. This guy is making a pretty harsh accusation (click fraud) towards many of those complaining about the drastic cuts:

    http://www.kbcafe.com/adwords/?guid=20051201074537

  46. September – 1.3%
    October – 0%

    Even with 26% of my readers from China… Go figure

  47. […] I can only assume that those complaining about the audit are unintentionally leaving their sites open to invalid clicks by using public computers, a shared household computer ro intentionally making fraudulant clicks. There may be more behind it and Darren Rowse hints at other reasons: I had a chat with someone in Chitika management this morning about yesterday’s audit and it seems that the reason why publishers with the largest reductions were audited so heavily was primarily for reasons of traffic from non accepted countries. […]

  48. The “disqualify clicks from certain countries” strikes me as odd. If, indeed, there are certain countries or IPs that are problematic then why even serve up an ad in the first place. No ad, no false click.

    The way I look at it is they (google, chitka, etc) are paying to “show” an ad on my site. It is real-estate, plain and simple. The metric for it’s value is derived from clicks.

    Here is my simplistic viewpoint:
    * If you are not going to honor a click, then do not show the ad.
    * If your software isn’t sophisticated enough to make this determination in real time then perhaps you are in the wrong industry?

  49. The key issue here is reporting.

    There is no technical reason for one month delay in auditing. There is no such thing as processing time = one month. Therefore, a one month delay in auding must be a matter of policy.

    Why does that policy exist?

    Chitika need to dump the policy of one month delay on statistics. Pro-publishers are not going to ramp-up quality traffic without more accountability.

    >>It’s not cost me anything

    Darren, look up opportunity cost.

    Also, some publishers do have traffic aquisition costs which are at risk if the advertiser doesn’t pay.

  50. I agree spud. The only thing that could be returned or audited after a month would be checks (cheques). Cards are processed or declined on the spot. And don’t tell me an average of 50% of people charge back the purchase inside of a 1 month window. That doesn’t happen.

    Andy – do you work for them? You sound really defensive over a “beta” program that just ripped thousands of webmasters off. I’ll stick with adsense thanks.

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