Google Gobbles Up Sprinks

  |  October 24, 2003   |  Comments

The white-hot search service signs a four-year deal with Primedia to sprinkle contextual ads in the publisher's Web of hobby pubs and Internet Guide sites. In return, it gets to make competitor Sprinks go away. Google IPO Auction in Works

Google has signed Primedia to a four-year search and contextual advertising agreement, and has purchased Sprinks, the publishing company's paid listings unit.

Financial terms were not disclosed, and Primedia executives declined to comment further.

The deal calls for Google to become the exclusive provider of contextually targeted and search advertising across the 450 About.com Guide Sites and the Web sites for most of Primedia's Consumer Media and Magazines Group. The group includes many of the magazine publisher's 250 magazines, which include Motor Trend, Automobile, New York, Fly Fisherman and Creating Keepsakes.

Sprinks' key strength is that it has long been working on the problem of serving relevant ads on content pages. This is something Google provides via its AdSense program, and rival Overture, now owned by Yahoo, also offers. Contextual advertising has become hot as search players seek to capitalize on the popularity of the medium by expanding inventory off of search pages.

In a statement, Primedia chairman Dean Nelson said that he did the deal because Google's base of 150,000 or so advertisers would let the company "accelerate the benefits of contextual advertising across our Internet sites and enable us to more effectively monetize our Web site traffic than we could with Sprinks alone."

The deal is a win for both Google and Primedia, according to Matthew Berk, research director for Jupiter Research, which is owned by this publication's parent, Jupitermedia. "Primedia gets to unload the operating costs of the Sprinks division, which is probably not insignificant. Gogogle clarifies the channel, gains customers and broader distribution for AdSense. Primedia takes a less-profitable division and replaces it with a nice cushy deal from Google." Although he's not privy to the terms of the deal, Berk guesses that Google is paying Primedia in addition to sharing ad revenue across Primedia's network.

Greater distribution for Google is essential, Berk said, in its war with Overture. "Distribution was Overture's Achilles heel," he said, and, before it was acquired by Yahoo, the biggest line item in its budget. The economics of Google, he said, demand an ever-increasing number of opportunities to serve up keyword campaigns.

What that means for advertisers is another story, Berk said. Google will replace Sprinks' method of contextual targeting, which allowed advertisers to pick from a hierarchical list of categories, with the keyword method used by Google and Overture. "Google took one of the variants out of the model," Berk said. "[Sprinks] advertisers and publishers now have to change horses."

ClickZ Live Toronto Twitter Canada MD Kirstine Stewart to Keynote Toronto
ClickZ Live Toronto (May 14-16) is a new event addressing the rapidly changing landscape that digital marketers face. The agenda focuses on customer engagement and attaining maximum ROI through online marketing efforts across paid, owned & earned media. Register now and save!*
*Early Bird Rates expire April 17.

ABOUT THE AUTHOR

Susan Kuchinskas

Susan Kuchinskas has covered interactive advertising since its invention. The former staff writer for Adweek, Business 2.0, and M-Business covers technology, business and culture from Berkeley, CA.

COMMENTSCommenting policy

comments powered by Disqus

ClickZ Today is our #1 newsletter.
Get a daily dose of digital marketing.

COMMENTS

UPCOMING EVENTS

Featured White Papers

ion Interactive Marketing Apps for Landing Pages White Paper

Marketing Apps for Landing Pages White Paper
Marketing apps can elevate a formulaic landing page into a highly interactive user experience. Learn how to turn your static content into exciting marketing apps.

eMarketer: Redefining Mobile-Only Users: Millions Selectively Avoid the Desktop

Redefining 'Mobile-Only' Users: Millions Selectively Avoid the Desktop
A new breed of selective mobile-only consumers has emerged. What are the demos of these users and how and where can marketers reach them?

Jobs

    • Contact Center Professional
      Contact Center Professional (TCC: The Contact Center) - Hunt ValleyLooking to join a workforce that prides themselves on being routine and keeping...
    • Recruitment and Team Building Ambassador
      Recruitment and Team Building Ambassador (Agora Inc.) - BaltimoreAgora, www.agora-inc.com, continues to expand! In order to meet the needs of our...
    • Design and Publishing Specialist
      Design and Publishing Specialist (Bonner and Partners) - BaltimoreIf you’re a hungry self-starter, creative, organized and have an extreme...