How Traffic Exchange Sites (MGID,Wahoha etc) Can Harm Your Google Adsense

Many bloggers have been in panic over the last few months, since Google has been involved in a huge clampdown – banning AdSense on sites that have been part of traffic exchanges. At the outset, traffic exchanges have not been doing anything illegal – they are promising readers to move around the web without getting back to a channel (Google, Twitter, or Facebook). However the interplay of human behavior, along with the model traffic exchanges have created is creating big hurdles for Google – both in ensuring value to its advertisers and ensuring efficiencies of their systems. This article is an attempt to unravel this exciting network phenomenon.

The AdSense policy on Traffic Exchanges
Way back in 2007, Google Adsense blog came up with post recommending people not to get onto traffic exchanges. The post clearly suggests that while there may be a value in being part of them, they “may” cause invalid clicks. Given that many bloggers depend on Google solely for their livelihood – there is mass fear about adopting high quality products that help improve user engagement on their sites.

The Resurgence of Traffic Exchanges
Ajax and the ease of installation of widgets has caused a resurgence of traffic exchanges. Traffic exchanges provide value – both to the publisher and the reader, in getting contextual and new unique users from other sites. Sites like MGID, Wahoha, 2leap have been growing leaps and bounds. Testimonials of people saying their traffic increased by 500% in a week makes one wonder if this is a big ponzi scheme. To understand this, we should understand how traffic exchanges work.

You lease out real estate on your articles to the TE (Traffic Exchange) widget. The widget decides to show outgoing links here dynamically.
When users click on the TE widgets articles on your page, the TE remembers your site (or a set of pre-selected pages), and promotes them more on other sites.
You get back traffic – often much more than what you sent out. Makes you wonder how this can be a non-zero sum game. The trick is that every click on the widget takes a user to an intermediate page – where the user is link baited to click on more than one article. They all open in new windows in the background. One click turned to many. Non zero sum.

Due to the overwhelming importance given to user click behavior, links that get promoted mostly look like this. I know you cannot resist clicking on them. Unfortunately, these are not linked to.