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Wednesday, June 18, 2003

Google Extends Content Targeting to Small Publishers

Today Google launched an extended version of its content targeting program. (See previous Traffick coverage of this.)

Dubbed Google AdSense, the new program provides advertisers with placement on a potentially huge variety of topically-relevant web pages. As before, ads are matched with the content of a page "on the fly." The new wrinkle, no doubt being incorporated in stages, is technology from Applied Semantics (who formerly offered a product called AdSense), whom Google acquired shortly after announcing its first version of content targeting.

According to Google's Susan Wojcicki, manager of Google AdSense product development, the program should benefit users and publishers alike. Users may benefit because of the focus on relevancy. Publishers, especially small publishers with no dedicated ad sales staff, may appreciate the convenience the ad serving system offers them (no work outside of placing a few lines of code on their pages). And making it possible to sustain quality niche content may mean that more small publishers stay in business without having to resort to those "please donate" buttons or to rely entirely on paid content models.

Our demo of the program (see the ads on the left hand side of this page) proved straightforward to install. And it appears that Google is now going with a revenue sharing arrangement with publishers, which should be a better deal for them than the fixed CPM "media buy" approach Google took when it first announced the content targeting program. We feel a revenue share is important in an environment where advertisers are bidding in an auction system. If ads generate more revenue overall due to intense advertiser competition, publishers and Google both benefit. This will generate more publisher goodwill than if Google simply enjoyed an increasingly high margin while paying out a fixed rate to the publisher.

Some of Google's competitors have built fairly large ad networks by accepting smaller publishers, with mixed results. Some observers are questioning how Google will maintain control over traffic quality. Will advertisers run into inflated click counts and the like?

The AdSense program is supposed to combat that in a couple of ways. First, all publishers must apply and be approved by Google editorial staff. Presumably, only publishers of decent quality, niche content will be accepted. Secondly - as they do with the Google search engine itself - Google has the ability to rely on automated checks to look for anomalous behavior, low quality content, etc. This is just an extension of what Google already has the capacity to do, since they already have such a large index of web content. Potential bad actors will be flagged for human review.

The AdSense program brings a potentially vast universe of small publishers (fewer than 20 million impressions monthly - the minimum may be as low as 50,000 impressions) into Google's ad network. A largely technological solution to serving advertising on what has until now been a very fragmented marketplace of smaller publishers should offer advertisers a viable way of placing an increasing number of relevant, targeted ads within their existing Google AdWords accounts. Publishers can apply online for acceptance to the AdSense program at: http://www.google.com/adsense.

Posted by Andrew Goodman




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