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The Case For Overture To Enter The Mass Contextual Advertising
By Dave Lavinsky, Sat Dec 10th
Contextual Advertising is, by definition, text-basedadvertising. As opposed to search engine results which show upwhen a user types in a specific request, contextual ads appearalongside text on all websites that opt to show them. The market leader in contextual advertising is Google. Throughits AdWords™ program, advertisers can choose to syndicate theirads on relevant websites. On the other side of the equation,website owners can join Google’s AdSense™ program to serve theseads. Google is not the only company that allows website owners toserve contextual ads. There are a host of others such asSearchfeed.com and Revenue Pilot that also do this. The problemwith using these other firms is that the price-per-click youreceive will most likely be less than the price that Google paysyou. This is because advertisers generally bid/pay on an auctionbasis. Since Google has so many bidders, the price that theadvertiser pays is greater than they pay on lesser searchengines (classic supply/demand economics).
There is one search engine, Overture, which also serves largevolumes of advertisers, and as such, has keyword bid prices thatare as high as, and often higher than Google’s. While Overturedoes offer contextual advertising, it has strict limitationswhich prevent the vast majority of websites from enrolling.Specifically, Overture limits its contextual advertising programto websites generating more than 1 million web searches a month. Overture clearly is missing out
on a huge revenue source bylimiting program participants. The rational behind itsselectivity is most likely the fact that its contextualadvertising program relies heavily on Overture's editorial teamto avoid poor matches that a technology-dependant approachinevitably produces. As an example, according to statementsreleased at the time of the program’s launch by Bill Demas,Overture's Senior Vice President, without editorial interventiona story about a person stabbed to death could easily carry knifeadvertisements. While Overture is missing out on significant revenues, webpublishers are also missing out by Overture’s non-participation.This is because, if more web publishers were able to choosebetween and Overture’s programs, Google would be forcedto become more aggressive with the percentage split that itgives publishers. While it has been reported that bigGoogle partners such as AOL.com receive 80% of the revenue perclick generated by Google ads, publishers report figuresin the 10% to 50% range. So, web publishers should really begin pushing Overture to openup its contextual advertising program as web publishers, andpotentially Overture/Yahoo!’s shareholders, could reapsignificant financial benefits. About the author:As President of Growthink, Dave Lavinsky has helped the companybecome one of the premier business plan development firms.Growthink clients have collectively raised over $750 million infinancing, launched numerous new product and service lines andgained competitive advantage and market share. For moreinformation please visit http://www.growthink.com
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