Marketers React to Yahoo! AdSense Alternative

Many marketers would welcome Yahoo’s launch of a contextual ad network for smaller publishers — providing it’s different from Google’s AdSense program. That’s the consensus among marketers ClickZ News spoke with about the expected new distribution method, which has been widely discussed on blogs and in other publications.

“We view it as a welcome change for Overture. Overture is specifically focused on generating the best results for advertisers. As they expand their contextual product into the smaller sites, Overture’s product will rival, if not exceed, Google’s,” predicted Will Margiloff, CEO of eXact Advertising. “There’ll be a constant battle back and forth between them to get hold of these tier-two and tier-three content sites to drive good traffic.”

A Yahoo offering that pays attention to quality of sites in the network, strives for openness in its policies, and offers advertisers more control would be good news for everyone involved, marketers say. Advertisers could benefit from increased competition in an area that has been ruled by Google, and publishers would benefit from having a more attractive revenue-generating option for their sites.

Yahoo currently has a contextual ad program in its Overture ContentMatch product, but Yahoo doesn’t offer a self-service sign-up program for publishers, as Google does with AdSense. A Yahoo spokesperson declined to comment specifically on any plans to expand its network of publishers, saying, “We are currently in the midst of testing several publisher-focused products. We’re in the initial phases of these tests, so we’ll have more to discuss once they are completed.”

Meanwhile, the company has launched an email sign-up form at publisher.yahoo.com, where it explains that, “To support the publishing community, Yahoo will be introducing new products and services — including publishing tools, advertising products and access to our Yahoo audience.”

Industry watchers expect Yahoo to launch a self-service network like Google’s, which would extend its contextual ads to blogs and other smaller sites. What’s not clear is what criteria would be used in deciding whether to accept new sites, to make those approved part of the existing ContentMatch distribution, or to allow advertisers to bid for the distribution method separately. No matter what, the move will broaden its network reach. Some advertisers are withholding judgment until Yahoo reveals its strategy for maintaining the quality of leads delivered.

“Everything I’ve seen leads me to believe Yahoo might be limiting it more than Google does with AdSense. That would be a good thing for advertisers, because if the content sites are up to standard, it gives you another channel to go after,” Matt Naeger, VP and general counsel of SEM firm IMPAQT. “If they open it up the same way, the value is going to be minimal.”

Though Overture hasn’t done anything but hint at the new distribution method, the company is already seeking to reassure advertisers.

Many advertisers have expressed the desire for more control over the sites or categories of sites where their ads appear, or don’t appear, within Google’s AdSense network. Some publishers have also expressed frustration about the lack of openness in Google’s commission structure. If Yahoo begins offering tools that give users on both sides more control, it might pressure Google to do the same.

“A lot of people have been wanting Google to give publishers and advertisers more options, and Google has been relatively slow to make certain changes. The fact that there may be a competing program might make them feel like they have to come along on some of these things,” said Danny Sullivan, editor of Search Engine Watch.

The move by Yahoo comes as MSN is widely expected to ramp up its own pay-per-click (PPC) ad network. MSN renewed its PPC deal with Yahoo in November, extending its three-year-old agreement to provide Overture paid listings on MSN sites in the U.S., Canada, Europe, and Asia through June 2006. The previous agreement ran through June 2005.

A key element of the deal allows Microsoft to begin selling and displaying its own ads on the site, a move that would allow it to ramp up its own ad sales program while maintaining service levels and garnering revenue from the Overture ads on its site.