The search giant gets it right in its newest anti-spam drive.

If you’re going to be the market leader, you might as well lead by example. Google (GOOG) has long dominated the online ad industry, fueled by its popularity in search and its auction-based approach. Ads on the Web, meanwhile, have been overrun by shady offers of teeth whiteners and stomach flatteners. These ads—which TBM has covered zealously—are classic bait-and-switches. They lure you in with the promise of self-improvement, charge your credit card exorbitant and unexpected fees, and don’t pick up the phone when you call to cancel. As I said, these guys are the salt of the earth. Unsurprisingly, Google’s ad network has not been immune to these scams despite their efforts. Ubiquity, after all, attracts the unseemly.

Google has long tried to weed out these ads and their scammer brethren. Its ad network is policed by software that detects the bad seeds and puts them on notice. (This is very different from some ad networks, like Pulse360 and AdBlade, that allow these scammers to spread their message across the Internet, including on The Big Money.) But the scammers are just as crafty, consistently tweaking their pages to sneak past Google’s requirements. It’s the oddest of arms races: Google trying to prevent some customers from giving it money, and the customers trying as hard as possible to make sure they can keep paying Google. When Google banned an ad and the site it linked to, the scammers just created a new domain and ad, essentially pointing users to the same place, filled with the same shoddy offers. Google’s old approach, while partially effective, still let too many ads through.

And so Google has made a minor shift in its policy that has major implications. Up until now it has taken action against ads, not advertisers. If an ad violated one of Google’s terms of use, the search giant would take it out of circulation, but that’s it. Google briefed TBM on its new policy: It will now ban the advertiser, not the ad, effectively neutering the advertiser’s ability to shift from one ad and shell site to another. Think of it like the struggle between the police and a graffiti vandal. Up until now Google has only been erasing the tags after they’ve been put up. Going forward, they’re going to take away his spray cans and put a GPS collar on him, making sure he never does it again. It would be a principled stand by any company, but especially by Google because of its position in the market. I worry, though, that the rest of the industry won’t pay attention. On this issue, Google might be a leader without any followers.

Google’s policy switch is so impressive because it reacts to the real-world circumstances of how these scams are perpetrated. The crackdown is meant to focus on all scams—malware, get-rich-quick sites, getting users to pay for otherwise free software, etc. But as a case study, let’s look at how it affects the white-teeth and stomach-flattener scams that pervade Internet ad slots.

To do so, I need to give a quick crash course in affiliate economics. If you’re a real masochist and want more information, I’ve outlined the whole sordid ecosystem elsewhere on TBM. The abridged version: These ads propagate through a network of affiliates that are paid to direct people to the scam product in question. Let’s say you’re a scumbag who wants to sell an acai-berry weight-loss regime. You’re not the one doing the advertising on search engines and content sites; you’re paying others to do it for you. The affiliates are usually directing people to an intermediary page that speaks highly of the scam product, making somebody more likely to buy if he clicks through to the product page. The affiliate then gets a cut of the revenue if the people it sends to your scam site stay and buy something. It’s the affiliates who are flooding the Internet with ads—the more they put up, the more likely they are to get clicks, referrals, and revenue. As long as they’re making more in commission than they are spending on advertising, they come out ahead.

Thus, it’s part of the affiliate’s business model to create as many ads as possible. And here’s where we get to Google’s common-sense adjustment. By targeting the affiliates, not the ads, Google avoids playing Whack-a-Mole and gets to the root of the problem. In the past, when Google banned an ad or linking site, the advertiser would just put up a different ad that linked to a cloned page. Google’s new policy will stop that. The company also says its software can detect if a scammer sets up a duplicate account in response to the banning, eliminating that new account, too.