Search Advertising with Publishers, Time to Oust Google?


What is it about Google?  Why do so many Publishers look at the contextual search space and throw up their hands and say, “here, you do it.”  Why is that market so entirely dominated by the Goliath?  Okay, so maybe there are about 10, 11 maybe 12 players in the space – networks if you will like Kanoodle or Go.com – who provide contextual advertising for publishers.  But why haven’t the publishers bothered to sell the search advertising on their own?  How much money is thrown over the fence to the networks?  How much money is lining Google’s pockets. 


 


Google has dis-intermediated the space.  They control the advertiser and the publisher.  Unique position.  The publishers are dependent upon them for both the traffic and the ad revenue.  But now Google is developing content and channels which means it will start to compete with its AdSense partners.  Will the publishers be prepared?  Will they step up and start to examine the concept of selling their own search advertising?  Can they even do that?  Technically? 


 


If they have the internal sales staff selling display advertising they have the capability to sell the search advertising, but what about the infrastructure to deliver the contextual search advertising?  What about Advertisers?  Would they be willing to buy from a decentralized market?


 


Let’s look at the display advertising space for a minute.  In 1996 I worked with a small group of people to kick off Zacks.com.  It was one of the first advertising-supported web sites and the fastest growing financial web site on the Web.  We quickly grew our network for co-branded web inventory and sold advertising like mad.  We had a model and scaled it.  But that was just it.  We were leveraging content with other publishers (BIG Publishers like Dow Jones and CNN and AOL) to create co-branded pages that we owned and sold advertising on.  We were creating more and more inventory and continued to sell out.  But our partners were not creating scalable models.  They had content but had not figured out the advertising model yet.  They were turning to networks instead.  Networks – we’re talking the early days like DoubleClick and 24/7 (actually it was Petry and Katz back then and ClickNow! and they were still all separate).  There were some more but who remembers anymore which were the first ones (that will generate some comments!). 


 


Anyway big publishers were throwing their inventory over to these early networks while they got their acts together.  Zacks became the reseller for some of these sites back then as well.  And even today they continue to act as a reseller with their ad network of financial sites.


 


So the progression is clear.  Display advertising was born.  Early adopters began to sell advertising and for those who were slower to get on board, there were the networks.  So what about search?  Now of course, publishers sell their own premium inventory and give the remnant space to the networks.  And of course some networks even get some not-so-remnant space.


 


For search there are only networks.  In fact, for a long time there was just Google.  Now there are more players but Google still has the massive piece of the pie.  And what is their share of the revenue when you participate in AdSense?  More than the other networks –  sometimes a lot more.  But still, they also push more ads through at higher rates so it can net out. 


 


Contextual search revenue has been like free money for publishers.  But there is money being left on the table.  And the amounts may be significant.  Technology exists for these publishers to be selling and managing their own search advertising.  As promised, I try to find technologies that offer compelling opportunities in the space.  LookSmart is one of them.  Their AdCenter is a private-label search advertising manager for publishers.  It is tied to the LookSmart network so you don’t have to completely sell your own inventory, they will backfill what you don’t sell. 


 


AdCenter is a search ad server for publishers.  It enables a web site to sell its own contextual search and retain a much higher margin while still allowing for the use of networks for unsold inventory portions.  Quigo also claims to private label its solution as well but I haven’t verified that.


 


So this might just well be the next generation.  If publishers can direct-sell search to advertisers and retain a greater share of revenue, they can also under-cut the rates of a Google and make it more compelling to advertisers.  Large publishers can really make a go at this while the niche sites could still make a solid run at it.  Let me know your thoughts.


 


Reactionary with Insight.

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Going Further with Dave Morgan and the Obligation of Publishers

 


Going further with Dave Morgan’s January 25th, 2007 article in Media Post, “When Will We Deliver On The Promise?” brings up the obligation of publishers.  Dave quotes alarming statistics that less than 20% of ads are found to be relevant by users online in comparison to 47% of newspaper and magazine readers. 


 


Dave writes that “while many of the top content sites have dramatically improved in this area, far too many sites are addicted to just adding another ad unit every time that they have a new revenue opportunity… too many Web sites still look like Times Square at night: lots of crazy colored ads all shouting at once.”


 


So if the onus is on the publishers, let’s look at that.  Magazine and Newspaper publishers exercise some decorum with their ad sales – especially magazine ad sales.  They have spec requirements, color and style requirements.  But Web sites don’t.  There are file limitations – but that is a loose limitation that is really more so imposed by the advertiser’s ad server than by the publisher.  Lots of rich media types can be run, colors of all kinds are acceptable, animation is fair game and now there is video.  So sure it looks like Times Square.  It’s worse because its not up in the air its right in your face!


 


Back to relevance though.  Why has search been so effective?  Context.  Targeted advertising aims to do the same thing right?  Advertisers try to target audiences with their products.  They target verticals, demographics, geographies.  They use behavioral and event-based targeting and now the early adopters are doing customer re-targeting.  But where is the contextual advertising in display media.  How do we get that?  How do advertiser’s make their content relevant to the content that they are associating with?


 


Smartbanner technology is one course of action.  TruEffect has TruBanners – but that is just one example.  I put this one out there to you all for feedback on finding more.  Maybe Dave Morgan will come back to us with ideas as well (??).  A Smartbanner pulls content from another source dynamically in real-time.  So, for example when an individual enters a stock ticker symbol into a web site and the advertiser is an online broker, the banner can incorporate the stock symbol with the $10 per trade offer in real-time.  Now the ad has context and relevance to the user. 


 


Another example would be a user who is conducting a search on a trip from Denver to San Francisco on Expedia and an ad banner for a ticket for that route pops up from United Airlines – also a Smartbanner.  Relevance.  Context.


 


If more of the advertisers on web sites incorporated this kind of technology into their ads, the users would consider the ads to be more relevant and would pay more attention to them – and would probably interact with them more as well.


 


So how do we get advertisers to do this … well it can start with the publishers.  Publisher who offer dynamic content like stock quotes, weather forecasts, travel itineraries, recipes (man I can keep going if you want me to) can expose the dynamic string so that an advertiser can use Smartbanners.  This is not rocket science.  Publishers should be encouraging advertisers to do this.  It’s a win-win.


 


Contextual advertising is synonymous with search and text links but banner advertising has its rightful place too.  Reactionary with Insight.

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When Will We Deliver On The Promise, Deliverying the Right Ad At the Right Time


In MediaPost’s Online Spin, Dave Morgan wrote When Will We Deliver On The Promise?.  He discussed a question that he received while sitting on a panel at the  DLD (Digital, Life, Design) conference in Munich. 



Walt Mossberg, personal technology columnist for The Wall Street Journal wanted to know: “When will the online advertising industry actually deliver on its outstanding promise of the last decade to present the right ad to the right person at the right time? When will we finally deliver a consumer experience where the vast majority of ads that we deliver are meaningful, and not junk and clutter on Web pages?”


Dave’s observation was that “the online ad industry is always touting its extraordinary technical capabilities to target relevant ads … [but] we are still giving consumers a terrible experience when it comes to the vast majority of ads that we place on their Web pages.”



Dave’s article argued the evolution of the industry and compared it to the evolution of print and broadcast.  But what he failed to do was point out the capabilities in the industry that do deliver on the promise of delivering the right ad to the right person at the right time.  As the CEO of TACODA, I was surprised not to hear him plug it, but then again his insight expands beyond self-promotion and so it was healthy to see him stay on topic.  Regardless, here is the response that I posted on his blog:

Solid arguments Dave, and a very positive outlook. I think to see the conformity trend makes a lot of sense. But I also think that repurposing existing technologies presents the opportunity to put the right ad in front of the right person now. I don’t know how you answered Walk Mossberg’s question, but he is not alone in that inquiry. It is a popular question and one that I know TACODA aims to answer with BT. Putting the right ad in front of the right person at the right time is the golden nugget. Knowing how to recognize the right person is the major task. BT does it with the prospecting of anonymous individuals as we know. Customer re-targeting can establish the same capability through first party ad serving as I have argued in the past. Together these two technologies can enable an advertiser to put the right message in front of prospects and customers while advertising on the web in real-time. The composition of the advertising audience can be measured so that customers no longer get re-prospected with promotional messages and customers get driven towward recurring revenue-minded actions. Putting the right message in front of the right person at the right time makes the advertising relevant.

Reactionary with Insight.

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TruTags, Universal Site Measurement Tags


Here is an afterthought.  In Tom Hespos’ article on Become an Ad-Serving Power User he described a painful dialogue between the MediaPlanner and the Webmaster regarding tagging a site.  During this hypothetical example he mentions:


 


“The major ad servers have a wonderfully simple solution to all this. Place their tags on critical pages of your client’s website and upload the network tags through your own ad server. The ad server then manages which tags should fire at the appropriate moment. This can save your agency a ton of time and effort during the trafficking process, shaving hours off your management time.”


 


I am not exactly sure what Tom is talking about in terms of the ad server’s tags.  Dynamic Logic has a “Universal Tag” that they have created which allows you to tag a site one time and then redirect pings to other tags but this is for the purpose of pulling in the Millard Brown surveys.  DoubleClick has partnered with DL and enables the redirect pings so that you can post the Universal Tag (supposedly although I can’t find anyone who has actually deployed it) and then the tag will fire off other tags when it is activated.


 


TruEffect has its patent-pending TruTags.  This is uniquely different in that they are tags that you put on an advertiser’s web page and you can use them to load other pixels through them so that when they fire, they will simultaneously fire other pixels.  And Advertiser or agency can load up as many other tracking tags as they may wish without ever having to retag the advertiser’s site.  It’s perfect for that Webmaster who bitches and moans every time you want to add or remove tags. 


 


Reactionary with Insight.

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