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Separating Search and Contextual Inventory

  |  January 30, 2004   |  Comments

Overture now allows marketers to bid for contextual and search inventory separately. How should you cope with yet another major search engine change?

As a search engine marketer, you act quickly, shifting strategy and adapting to sudden market changes. The latest major shift is a change to Overture's Direct Traffic Center (DTC). It now allows separate bidding for listings running in a contextual environment.

With separate auctions for keyword-based contextual inventory on Overture, it's more important than ever to have a strategic and tactical plan that takes contextual opportunities into account.

Contextual inventory can be a huge opportunity for marketers, as well as for search engine traffic providers and publishers. Correctly implemented, contextual inventory can drive additional sales and profit. Conversely, like pure search campaigns, poorly executed contextual campaigns are an opportunity cost. They waste budget and force you to miss high return-on-investment (ROI) opportunities you could have taken advantage of in other areas.

Some Q&A about the change.

Will Google need to separate the AdWords and AdSense auctions, following Overture's lead of separate auctions?

Google isn't telling. But, it rarely releases plans until it's ready to execute. Google may not have to separate contextual from pure-search inventory to allow separate bids because it has a very large advertiser network.

Based on client and personal campaign data I've reviewed, each client will see a different quality level between the two traffic types. For some marketers, contextual inventory works the same, or better, than pure search. Others have offers, creative, and keyword lists resulting in dramatically poorer conversion and quality in contextual ads. Even if half Google's 150,000 advertisers opted out of contextual advertising because of poorer conversion, Google still has a robust network of marketers who would choose to stay in the contextual network.

Why did Overture choose to separate its contextual network?

It may appear contextual inventory, on average, isn't as valuable as pure-search inventory. Yet Overture had several compelling reasons to separate. First, to satisfy marketers who prefer the additional control a separate auction allows.

A second business reason may have influenced the decision. Currently, when Content Match listings are displayed in contextual inventory locations, the Overture ad server selects one keyword for the ads, preserving the paid-placement model for that page. Overture could easily eliminate the presumption of position by selecting multiple keywords.

Both Google and Overture have stated they wish to provide relevant ads in a variety of locations, including Web sites and even email. With relevance as the guideline for serving ads, either vendor can select ads from several keywords, all of which are relevant to an ad-serving situation, and place those ads in positions based on formulas that factor in relevance and revenue.

An efficient contextual ad-serving algorithm strongly favors targeted ads. The ads are clicked (surfers vote with their mice). This method of ad serving is better for the surfer, the publisher, and the publisher's rep.

How does this impact you as a search marketer? You must measure contextual advertising in Overture separately from pure-search advertising to allow you (and/or your campaign management system) to make informed bid decisions. Contextual ads are viewed by potential customers at a different time, place, and mindset than paid-search ads.

Determine bid prices based on specific differences in data, not gut instinct. Develop a well-defined strategy for deciding when to run contextual ads. Do you use the same ROI guidelines for contextual ads, or do you adapt ROI goals based on information regarding long-term customer value that originated from contextual listings? Are you factoring in the additional reach and exposure contextual ads provide?

Note: To determine if Overture traffic is from paid placement or Content Match, turn on the optional "Overture Tracking URLs" feature in the DTC (or ask your search agency to). This allows your tracking or campaign management system to differentiate traffic and helps manage content listings against ROI or other post-click objectives. The Overture Tracking URLs feature is also used by campaign management and tracking systems to differentiate the Overture match type. Look at these referrer strings from a log file:

GET /?OVRAW=travel&OVKEY=travel&OVMTC=standard
GET /?OVRAW=travel&OVKEY=travel&OVMTC=content

Notice content, match type, and keyword are all identified. The clicks came from different sources -- one from search, the other from Content Match.

Some clients ask if they can run different listings or landing page creative for search and content. Currently, the only way to do so would be by maintaining separate accounts. Opening multiple accounts for the same keyword/domain is not advisable, as it's frowned on by the engines (although it's sometimes possible and even valuable, such as in the above dual-creative example).

Hopefully, targeting and control improvements will appear across all vendors. Anything that helps marketers target better is also better for Web users, and that usually means more clicks. More clicks (at the right price) make marketers happy. Search engines collecting CPCs are happy, too.

Paid-placement search portals are becoming behavioral and topically targeted text listing networks. By understanding how to tap the power of these contextual listings, you can add significant profit to the bottom line. Keep your strategies, tactics, and technology up to date, and you'll reap the rewards.

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ABOUT THE AUTHOR

Kevin Lee

Kevin Lee, Didit cofounder and executive chairman, has been an acknowledged search engine marketing expert since 1995. His years of SEM expertise provide the foundation for Didit's proprietary Maestro search campaign technology. The company's unparalleled results, custom strategies, and client growth have earned it recognition not only among marketers but also as part of the 2007 Inc 500 (No. 137) as well as three-time Deloitte's Fast 500 placement. Kevin's latest book, "Search Engine Advertising" has been widely praised.

Industry leadership includes being a founding board member of SEMPO and its first elected chairman. "The Wall St. Journal," "BusinessWeek," "The New York Times," Bloomberg, CNET, "USA Today," "San Jose Mercury News," and other press quote Kevin regularly. Kevin lectures at leading industry conferences, plus New York, Columbia, Fordham, and Pace universities. Kevin earned his MBA from the Yale School of Management in 1992 and lives in Manhattan with his wife, a New York psychologist and children.

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