Dealing With Contextual & Other Non- Search Ads

Aug 2, 2004 - 1:22 pm 0 by

So far, I have only good things to say about the conference. The suggested hotel is nice (Marriott), the convention center is nice and now being officially part of the "press", I have access to a room where I can write and post. I have to ask some of the Jupiter people if I can gain access to the wireless lan here, seems to be locked down. Once I get access to that, I will hopefully post more frequently.

Dealing With Contextual & Other Non- Search Ads

Joshua Stylman from Reprise Media starts off stating that the demand for search advertising is higher then the supply. A larger audience is reached through contextual ads. Types of Non-search ads are: behavioral targeting, directory driven advertising, and contextual advertising.

Contextual advertising is keyword based targeted adverting on non-search pages (i.e. overture, google, kanoodle, quigo). He then shows an example of a search done on Google for "hotels in New York" and explains how it is very pre-qualified. Then he shows how xontextual advertising works by going to a site and finds ads to leading to hotels in new york. He says this is bad, because he lives in new york and doesn't need a hotel. He explains that contextual ads should not be using the same algorithms that AdWords uses. A search ad is different then a contextual ad search. He says you to "message to mindset", the people reading content sites are reading the content and not requesting your ads. So he says, you need to be more intrusive, like with TV or paper ads. You need to get them into the mindset of buying.

He aggregated 10 different campaigns of 3 months of data and 6 million clicks. Search out performed contextual by 3 times. The conversion percentages were like 6 times more effective on search versus contextual. When does contextual ads work? He said if you run broad targeting often (general interest topics), low commitment from users required (content, free email registration and free download, etc).

He said all the negative thoughts on contextual ads are because they are looked at too similarly as search ads. Very good presentation.

Brad Byrd from NewGate (also a moderator at Search Engine Watch Forums) brought up his Apple PowerBook to give his presentation (smart guy). He prepared two case studies, one from a retailer and one from a non retailer.

The non-retail's goal was to get the customer to ask for information from the site. Google's CPC between AdWords vs. AdSense were basically the same. Overture's pricing were slightly different, but more so in Overture. Google now allows for SmartPricing, which allows for prices to be adjusted automatically. AdSense distribution is closer to the AdWords distribution then the Overture network (well, you see AdSense all over the place, Overture doesn't allow anyone to sign up). The average CTR for this non-retail customer was higher on AdSense then on AdWords but less on the Overture Content side then on the Overture Search side. Conversion rates were higher on search ads on both Overture and Google, but the Google AdSense conversion rate was pretty good. The Cost per Action (CPA) was higher on the content side then on the search side, but both content and search ads made sense based on ROI for this non-retail customer.

Second case study was an online retailer (he said a famous retailer but said he couldn't give up the name). The CPC were similar in AdWords and AdSense and also fairly similar on Overture's ads. Search ads brought a much higher reach. The CTR was higher on search ads versus contextual ads. The conversion rates were higher on the search platform but the contextual side did not look to bad, so the contextual ads are getting in front of the right customers. The CPA were much higher on the contextual side then the search side but it made sense to continue based on the overall requirements of the customer.

The takeaway is that the mileage may vary based on the networks (overture, google, etc.), so experimentation is needed. The opportunity is there. Contextual has lower CTR, CPA varies by channel and by advertisers, contextual's limited distribution network = lower traffic potential and contextual seems to garner better results for non retail customers (because there is a lower barrier to action - no purchase wanted on these sites).

Andrew Goodman from Page Zero and also a moderator ad SEW forums. He entitled his presentation "Squeezing ROI out of Contextual Inventory". He first goes over why people are attending this session; PPC campaigns are paying off, campaign metrics stabilizing in good ranges, there is not enough distribution and revenue (give me more). So that can lead to problems, where you say, "give me more" and you click of the "contextual ad" option.

Andrew is going to give you tips on how to big lower with Google AdSense (Overture already allows you to do so). (1) Target best converting keyword groups. (2) Leave bids high, turn "content targeting" off. (3) Copy this campaign and put it into a new campaign (4) Bid lower, (5) turn "contextual on".

Case study #1 was a subscription client and it worked well for the client who tried this workaround. CTR was 8% higher on search then on content. Conversion rates were 30% lower on contextual versus search but he was able to bid lower. So the CPA was cheaper on content and revenue increased 21% and additional profit was 29% based on this content work around. His client also put some AdSense ads on his side to get on the "sell side".

Case # 2 was a tech related client. CTR was lower, the CPA was much lower on the content based on the workaround. The success was highly dependent on the "low bid" technique. As long as you can get your price then go for it.

Patrick Keane from Google was up next, he is based in NY. General content consumption is much higher then search consumption, there is not infinite inventory in search. They are doing their best to get more publishers based on increasing relevancy and ultimately leading to more clicks. He wants to hear from us how to improve the program, very short speech.

Paul Volen from Overture was up next. They had to expand beyond search, like Google (95% of Web consumption come from outside search). They separated out search from content to make it easier for advertisers to manage those ads. They said its a learning process and they are learning from these sessions and feedback. They also launched conversion counter to track this information better. Short as well, but now we go to Q & A.

Q & A: Why is there virtually no traffic if your not in the top three listings of contextual ads on Overture Content Match? Overture answered that most ads show three ads and its totally dependent on the amount you spend and the number of ads displayed in an ad (based on the publisher's request).

Why doesn't Google show the expected impressions based on search versus contextual? They are looking into it and they just don't know the reach yet but they are working on it. They are going to try to do this at the page level at some point, because its about the pages and not the site level. Joshua added that you need to believe in your ad distribution network, if Overture sees that a distribution network is not working, then they will and do drop them.

Does Overture have plans to allow graphic ads in their network? He has no announcement to make on this but they are hearing feedback from advertisers on this and he wouldn't rule it out. This question brought up some jokes about how some graphic ads look like text ads. Then one said that its not about text versus graphics when it comes to higher CTR but rather about the relevancy of those ads to the Web user.

Forum discussion at Search Engine Watch.


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