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The Next Context

  |  April 16, 2004   |  Comments

Where will contextual ads and paid search listings turn up next?

Whew.

If you follow search marketing, you're likely exhausted by the changes over the last few weeks. Between dueling local offerings, pricing changes, personalization, and trademark issues -- not to mention Gmail and A9 -- my brain is beginning to overflow like an overfilled (and over-caffeinated) mug of java. Amid all the excitement, I thought I'd speculate on news that might keep our heads spinning in the months to come.

Google's recent announcement of changes to its AdWords pricing model really got me thinking. It's planning to "normalize" pricing for clicks across its network, both for contextual (where it's already started) and search. The decision suggests Google recognizes that post-click conversions from AdWords listings differ greatly depending on where the ad appears. (This after appearing to deny such a conclusion for some time.) If Google's not comfortable charging the same per-click price across its network, there are obviously significant differences in value in different deployments... or there will be, anyway.

What kind of deployments is Google planning? The mind races. (Unfortunately, Google couldn't arrange for me to talk with someone on the subject.)

Let's not forget Overture. The Yahoo subsidiary has taken a different pricing approach -- creating a separate marketplace for its ContentMatch ads. That's not to say it's not exploring some new distribution schemes. Talking to Overture's Paul Volen, vice president of partner product marketing, I threw out a few ideas: email, RSS, mobile. Will we be seeing ContentMatch in these contexts?

"We are definitely looking into all those areas," Paul told me. "Anywhere where there is content, and appropriate and contextual listings. It just makes common sense."

Differing Displays

I met a couple of weeks ago with some folks from Vibrant Media, a company that's gotten headlines, and blog entries, for its unusual method of distributing paid listings. Here's how Vibrant's product, IntelliTXT, works. Users breeze through their usual ration of online content, when they come across a link in green text, double-underlined in green. Mousing over that link, which appears on a "commercial" keyword, brings up a text ad. Users can't click on it for a couple of seconds. The idea is that the delay gives them time to look at the ad, so only qualified people actually click.

Though Vibrant says it's selling most of the inventory itself, Overture provides some listings to round out the mix. So far, the technology seems to be employed in less-sensitive content areas publishers can't otherwise easily monetize. The Motley Fool UK is testing the links on its discussion boards. Nevertheless, journalists are said to be up in arms about the implications of paid ads appearing within their stories or columns. As a journalist, I can certainly understand that.

As long as publishers are OK with the distribution method, there's no problem as far as Overture is concerned. Volen adds Vibrant has been given "some pretty strong guidelines that they've had to follow." These include the keywords that are chosen and the way the listing is displayed, among others. So far, no negative feedback from advertisers whose Overture listings have suddenly started appearing in this unusual format, according to Volen.

E-Mail

We already know about Google's Gmail (now we even know it's not a joke). What we don't know is how well ads in the service will drive conversions. I expect we'd initially see lots of "novelty factor" clicks. The potential abuse factor is pretty high. People are already talking about sending nonsense words like "atY1957g" in messages to Gmail users, then buying accompanying keywords on AdWords. They'd put the actual message not in the email, but instead in the AdWords ad (and the site it links to). Then again, if ads are really targeted based on what email users discuss, there's real potential for relevance and, therefore, qualified clicks.

Volen acknowledges the Yahoo empire has all the elements necessary to implement its own Gmail-style contextual ads, but adds it's not really Overture's decision.

"It's one thing to say, 'Will this work for this advertiser?' It's another to say 'Will this work for our users?' That's Yahoo's decision," Volen said. "We could do the same thing that Google is doing. We haven't gone down that route for other reasons."

In not-as-controversial email ad news, we're starting to see contextually targeted ads in email newsletters. Google is distributing its ads in iVillage's newsletters. Overture is doing the same, on a limited basis, in double-opt-in newsletters from both MSN and its parent company, Yahoo.

"Most of those are still in test mode. Nothing is in large volume there," said Volen. "We want to see how well they're performing and how well they're working."

RSS

One step from email newsletters is the spam-free alternative, RSS. Contextual ads are a natural for RSS distribution. They fit perfectly with the largely textual content; publishers are desperately looking for a way to monetize the service; and a pay-per-click model avoids some of the tracking problems inherent in the format.

No official word so far on RSS distribution for contextual ads, but one intrepid blogger has come up with a plug-in for blog publishing software Blosxom that adds contextual ads to RSS feeds. It looks a little awkward so far, as full ad copy doesn't appear, but it's a promising experiment.

Mobile

Perhaps the most out-there idea I've seen is Overture's test (which it's downplaying considerably) of ads on a "mobile travel directory" in the U.K. The ads will appear within the travel section of carriers' WAP portals. Though WAP hasn't proven to be the most popular format for mobile digital data (SMS is), the companies collaborating on the project say it's just a first step to more fully realized 3G applications.

"The service, which will include a number of Overture's top travel advertisers, will generate data to help Overture better understand mobile user needs and will pave the way for a fuller launch of paid search on mobile services during 2004," the test press release reads.

Well, I'm certainly looking forward to it, and to all the future distribution methods tested, poked, prodded, and rolled out in coming months.

Don't worry. We'll keep you updated.

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ABOUT THE AUTHOR

Pamela Parker

Pamela Parker is a former managing editor of ClickZ News, Features, and Experts. She's been covering interactive advertising and marketing since the boom days of 1999, chronicling the dot-com crash and the subsequent rise of the medium. Before working at ClickZ, Parker was associate editor at @NY, a pioneering Web site and e-mail newsletter covering New York new media start-ups. Parker received a master's degree in journalism, with a concentration in new media, from Columbia University's Graduate School of Journalism.

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