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Site-Specific SEM

  |  January 16, 2004   |  Comments

You can’t buy just AOL or just Google now. But what if you could?

The growth of search engine marketing (SEM) and all its permutations has been so dramatic and exciting in recent months, there’s been little examination of some fundamental flaws in the current model.

Advertisers have very little control over where their ads run. Now, that doesn’t matter to some, so long as they get conversions. But what if you find out -- as fellow ClickZ columnist Bryan Eisenberg did -- Google AdWords listings on AOL Search convert better than those on Google? Good to know, I guess. Not that there’s anything you can do about it.

For publishers, it’s wonderful revenue is flowing in, even if you don’t know who all your advertisers are (unless you sit there refreshing pages and taking notes). How can you develop relationships with these advertisers -- many of which may be smaller businesses busy growing into bigger spenders? They buy from Google or Overture, not you. They don’t even know if your site kicks butt, performance-wise.

I got to thinking about these issues the other morning after breakfast with Erik Matlick, IndustryBrains president and CEO. On the surface, IndustryBrains seems to be in the same space as Google, Overture, FindWhat.com, Enhance Interactive, Kanoodle, and others. On the search side, it is very similar. But when it comes to content-targeted ads -- a hot area as search players try to expand inventory -- the model is very different.

IndustryBrains private-labels its technology to publishers, which can use their own sales staffs and sites to sell directly to advertisers. (Here’s Business Week Online’s minisite.) IndustryBrains does some selling on behalf of its publisher partners, too. The result is advertisers can buy on just the sites they want or pay more for one site than another. They can also have different creative for each site their ads appear on.

This arrangement can help publishers trying to hold the line against advertisers pushing for CPC deals. Contextual ads can be packaged with normal CPM inventory for bigger advertisers asking for these options. Publishers could send smaller players to the self-serve option, get them hooked on their inventory, and groom them for bigger things.

More important, it helps publishers better capitalize on their own brands and the quality of their audiences. One of IndustryBrains’ partners, Government Computer News, has received up to $12 a click, Erik told me.

Eric spent time selling classified ads back in the day. He says the placements function similarly to those traditional ads. They allow smaller advertisers to get their feet wet with a smaller spend.

"As they grow and as they see the success with the audience that they’re reaching, they can upgrade to a more substantial buy with the publisher," he explained.

Of course, IndustryBrains can only do what it’s doing because it is small and works with niche players. It doesn’t need every distribution deal to bring in a billion dollars. But for some -- especially in the business-to-business (B2B) space -- it seems to make sense. Business Week Online, for one, liked the personal touch a smaller partner can bring.

"We did look at all of [the companies providing contextual listings”," Peggy White, general manager of Business Week Online, told me. "We tend to be relatively conservative. We were more comfortable with IndustryBrains, which has a smaller sales staff that’s working directly with the advertisers." She contrasts that with the self-serve automated systems on Google and Overture.

Now, I’m not trying to do a commercial for IndustryBrains. It’s just that as far as I know, it’s the only company operating under such a model at present. The only similar product I’ve seen is when FindWhat private-labeled its technology out to Verizon.

I predict we’ll see more of these site-specific search/contextual opportunities. Maybe publishers are at work building their own technologies, though I’m told these are difficult to replicate.

Such site-specific systems do add some complexity to advertisers’ and agencies’ chores. An already-daunting campaign management task would grow even more difficult. Guess that’s good news for SEM firms and technology providers such as Atlas DMT’s GO TOAST.

Publishers, too, would have to work harder to sell these opportunities. IndustryBrains helps, perhaps, but Google and Overture have a big built-in base of advertisers. That’s hard to beat. Still, niche B2B publishers -- say, Government Computer News -- aren’t likely to get $12 a click from someone selling to a general audience (on an automated basis).

Ultimately, these systems will provide advertisers more control and give publishers a closer relationship to them. They’ll work for some advertisers and publishers and won’t for others. Wouldn’t it be nice to at least have the option?

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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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