Overture Partners with Gator

Overture Services inked a three-year deal with controversial adware company Gator to provide paid listings on its Search Scout service, which serves pop-under ads when users visit search engines like Google.

For example, when a user of Gator software visits Google and searches for “antiques,” a Search Scout pop-under featuring Overture listings is triggered. (The page is labeled as a service of Gator, not the Web site visitors were viewing.) Search Scout is downloaded to users’ computers in return for free software, like its e-wallet application for filling out online forms.

Financial terms of the agreement were not disclosed.

Overture, which began testing the service in September, said its advertisers received a return on investment at or above the network’s average. Search Scout will expand the reach of its paid-search network, which includes distribution deals with portals Yahoo and MSN. According to Gator, 35 million people use its software.

“The proof is in the pudding,” said Scott Eagle, Gator’s chief marketing officer. “Our click-through rates run from 10 to 20 percent for a pop-under.”

The red-hot search sector has recently looked to expand paid listings from the search results page. Google recently began selling content-targeting advertising, which serves up relevant keyword listings on content pages. Overture plans a similar offering later this year.

“They’ve found more real estate on which to serve their ads,” said Fredrick Marckini, chief executive of search optimization company iProspect. “This is the trend you’re going to see.”

However, the Gator partnership is sure to cause more rancor than Overture’s other distribution deals, given the controversy Gator’s business model has produced.

Gator raised hackles in the online advertising world when it began serving pop-up and pop-under ads targeted to the Web sites its users visited. Publishers felt the ads infringed on their rights. After a furious legal battle, Gator and a group of publishers, including The New York Times and Washington Post, settled the case in February. Terms of the settlement were not disclosed, although the publishers made little secret of the fact they were pleased with the terms.

Eagle said Gator had few worries that Search Scout would become a target of similar lawsuits, particularly since the results are served in a pop-under window, not pop-up.

The new outlets for paid listings raise some new concerns for advertisers. Like content-targeted ads, the listings may prove less relevant since they are not an immediate response to a user query, instead residing on a pop-under page that might not be noticed until well after a search was completed. Overture advertisers’ listings will automatically appear on Search Scout, like any other search engine.

“If advertisers are forced to pay for clicks that don’t produce an outcome because they’re not tied to search, you might see a revolt,” said Marckini. “I hope that going forward all the search marketing companies will give their advertisers the flexibility to choose only those components of their offerings that are working best for each advertiser.”

The partnership also threatens to heighten the acrimony between Overture and its archrival Google. Since Google barged into the paid-listings market a year ago, the two companies have squared off for key partnerships in the lucrative search industry. Google quickly established its credibility by snatching away key Overture partner AOL last May.

A spokesman for Google declined to comment on the Overture-Gator partnership.

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