Google Inks iVillage Deal, Makes AdSense Changes

Google and women-focused Web network iVillage announced a multiyear deal on Wednesday for both paid search and contextual advertising services, as iVillage becomes the latest sizable publisher to join Google’s AdSense contextual ad program.

Under terms of the deal, Google will provide Web search and paid search listings from its network of 100,000 advertisers. In addition, iVillage signed on for AdSense, joining top sites like Weather.com and Switchboard, to display relevant text listings on certain content pages. The integration will be completed in the fourth quarter.

For iVillage, the deal is an opportunity to wring more advertising revenue out of its site, which drew about 15 million visitors in June, according to comScore Media Metrix. Despite a loyal audience, the company has yet to translate it into profits. Reporting its second-quarter financial results yesterday, iVillage said it lost $12.1 million. (Much of its loss was attributed to a one-time $8.1 million charge from cost-savings maneuvers.)

“It has the potential to add millions to our top and bottom lines,” said Doug McCormick, iVillage, on a conference call. “We are now a bigger player in the rapidly growing area of paid search.”

The exact length and financial terms of the deal were not disclosed, but AdSense publishers share in the percentage of revenue generated each time a user clicks on a listing.

The Google deal displaces Sprinks, which had provided contextual advertising links on iVillage.

Contextual advertising tries to take the robust success of paid search and apply it to content sites. Google uses its search technology to scan content pages, identifying their subject matter, and then matching it up with an advertiser listing.

Publishers have been drawn to programs like AdSense as a way to profitably use excess ad inventory that might otherwise generate only low-priced ads.

The iVillage deal is another feather in Google’s cap as it seeks to quickly expand its lead in this burgeoning advertising area. Google continues to gain on the momentum it enjoys from its head start in rolling out its program two months before rival Overture Services released Content Match. Overture has content-ad distribution deals with Edmunds.com, MSN and Knight Ridder Digital.

AdSense Alterations

In addition to tailored deals with top sites like iVillage, Google in June rolled out a self-service AdSense program for small publishers to display text listing on their own sites. On Wednesday, the company rolled out a number of alterations to the program.

One change is an attempt to better utilize ad space when it cannot match the content on the page to a relevant advertisement. In the past, Google would display public service links from groups like the American Red Cross. Now, it will use the space to provide a “relevant search” link that takes users to a Google search results page for a query it determines to be related to the page content.

Susan Wojcicki, Google’s director of product management, said the move was meant to keep the Google ad space relevant and useful to visitors.

“We don’t want to have what happened with the banner industry,” she said. “People saw a lot of untargeted banners and people learned to ignore them.”

If Google cannot figure out a page’s content, it will serve a blank ad with a message, “This blank space brought to you by Google.”

Likewise, a small related-searches link will appear at the bottom of all AdSense units for self-service customers. The changes will not affect premium AdSense partners like iVillage.

The related-searches boxes will also undoubtedly serve to increase traffic to Google’s site. Wojcicki said small publishers directing the searches would not share in the revenue generated from clicks on paid searches there.

Additionally, publishers will be able to alter the colors of how the ads appear, choosing from 20 palettes to match their sites.

“The idea is the publishers want to control the look and feel of the site and they want to control the look and feel of the ads,” Wojcicki said.

Google has also given self-service AdSense publishers some basic analytics functions, enabling them to calculate their revenue average over a time period.

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