12/29/2005
Contextual advertising trend
Right now there are a whole bunch of people trying to create the next big adsense. People see the value in contextual advertising, and programs are popping up all over the place.
I think most of them are missing the boat, and are setting themselves up for failure. Most of them get trendy, people realize they don’t work very well, and stop using them within a few months.
Why don’t they work very well? Because the businesses use a horizontal market model. They try to be google and be everything for everyone. They try to be able to serve relevant ads to any page, and it doesn’t work because they don’t have the ad inventory that people want, like google has.
This is why Yahoo hasn’t done very well yet, but will do well in the future. They have a gigantic base of advertisers, and that base will grow to the fringes as they improve their version of adwords. They already have a huge traffic base so it’s worth it for advertisers to come and advertise with them.
Others don’t have this luxury, they don’t have the huge traffic base, so they don’t draw nearly the number of advertisers.
So what’s the next big trend in contextual advertising?
Vertical markets.
Being the best source for traffic in a specific industry. If you can be the best source for traffic, you can get lots of targeted advertisers, not lots of random advertisers.
NextInsure.com is the best example I’ve seen of this. They only do insurance and mortgages. They have advertisers bid per click what they’re going to pay, and then they go out and get their ads on high quality publisher sites. If you’re an advertiser in the insurance industry, and you’re doing a PPC campaign and nextinsure isn’t part of that ppc campaign, you’re missing the boat.
I think this is the way most contextual advertising is going to go over the coming years. Imagine a technology targeted ad network that was only targeting technology stuff. The payouts on these networks are higher. Don’t you think sites like devshed.com or expertsexchange.com would love to have a technology targeted service that pays much better than adsense or kanoodle?
Or how about the work from home verticle market. Imagine how much wahm.com could make if they didn’t have to serve crappy adsense on their site, and they could be part of an ad network that was specifically and only targeted at work from home advertisers.
Vertical market advertising provides higher payouts to publishers, and better traffic for advertisers because you can control the distribution of the ads. You can make sure the ads are only on high quality sites. It means less click fraud, less spam, less advertising money wasted.
Vertical market contextual advertising is a win-win for everyone involved.
Filed under Business Ideas by John
Comments on Contextual advertising trend »
Vince @ 2:13 pm
This is all based on the life-span of the PPC business model right?
Chris @ 9:31 am
What alternatives to adsense are you trying?
admin @ 2:34 pm
I’ve tried YPN but it wasn’t very good. I’m going to give it another shot soon.
Other than that, I haven’t done much. I’ve tried kontera, chitika, and another blog specific one all with mixed reviews.
While I’m pretty unhappy with adsense, I still believe it’s the best thing out there for initial monetization of web traffic.
After I monetize with adsense, if a site does well, I move to affiliate programs.
Vince @ 4:11 pm
What kind of sites are you building for adsense or affiliate monetization?
John Jonas Blog - Blog Archive » Contextual Advertising Battle @ 11:28 am
[…] It looks like chitika is having a harder time than they expected (and than everyone else using them expected) figuring out how this ppc contextual advertising thing works. It kind of goes back to what I said about contextual advertising services needing to go after vertical markets, instead of trying to be everything to everyone. Unless you’re google, (and even if you are google), you’re going to have one heck of a time dealing with click fraud if you are trying to please everyone, and if you’re trying to do a ppc model. Post Navigation by Category […]
ashok @ 5:00 am
This has nothing to do with vertical markets, I don’t think. It’s just a fantasy.
The other day I was daydreaming in class, and I wondered what I would do if my blog grew, and what ads I would like to serve.
People who read poetry don’t buy a lot of things, right?
Well, there are some serious books that a publisher called Paul Dry Books has put forth, books that any serious reader probably needs (a commentary on the Illiad & the Odyssey probably being the best one they’ve put forth so far). Amazon routinely sells some classical music at a discount - if only that discounted music could be advertised when it is discounted!
Penguin is another of my favorite publishers, as is the University of Chicago. Again, serious readers need to think in terms of brand for recommendations. There are plenty of translations of Kant I wouldn’t recommend to anyone.
There are magazines and journals too that I wish could advertise on my blog. Canada’s Warlrus magazine is very lively and fun to read, and The Chronicle of Higher Education is essential reading for those of us in academia.
I’m sure if someone had discounts on Lindt chocolate they might want to sell to (ahem) my audience, and they might want to sell my sort of audience on things that allow them to write and think differently. Blackwell’s Philosophical Gourmet site is more than welcome to advertise; Schtuff.com, which encourages people to create their own wikis, sounds like tons of fun…
I dunno. I hate writing on Shakepeare or something and seeing an ad for a psychic come about because my entry triggered the keywords “love” and “dreams” or something…
Robert C. @ 11:23 pm
I like the concept of Vertical Marketing, and agree that it does make more sense to approach your marketing efforts with a rifle, instead of shot gun..
I find that “vertical marketing” in my industry (wholesale and surplus B2B suppliers) is woefully inadequate.
There are website directories that are dedicated to the business, but not any succesful PPC models. Just about everyone in the wholesale and surplus industry depends on Google Adwords and Overture for most of their online marketing efforts.
In addition, most wholesale and surplus websites that feature free supplier listings, do not have one particular site that gets an extradinary traffic accept for one, entitled Wholesalecentral.com, which has been around since 1998. They get about a 2 millions visitors a month. Possibly more.
However, they (Wholesalecentral.com) are mostly involved with having wholesale suppliers setup shop throughout their e-commerce network.
There was an attempt by one particular site (which will remain nameless) at starting a PPC campaign for the wholesale industry, but it concentrated on searches from their site only - not from a network of sites that were dedicated to wholesale and surplus supply sources…
The “site only” PPC model did not work out, and it failed in dramatic fashion due to a number of factors.
I just wonder what kind of money it would take to set up a network like this? I would assume it would be a “Herculean” effort in money and support staff?
Any thoughts or suggestions on how I could be a NextInsure.com for my indusry? Points to ponder..
1) How to get solicit wholesalers and industry related
websites to participate in the program? Normal online
marketing efforts? Offline advertising?
2) Money involved in start up phase?
3) Software programs to manage PPC programs?
4) What model to go with? PPC, or Pay Per Action (PPA)?
I like the Pay Per Action model, because that would
cut down on click fraud.
Regards..
Robert C…
“The Dog barks, but the caravan moves on”.
Arabian Proverb..