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Monday, February 26, 2007

Seth on Contextual Ad Targeting

Seth Godin wonders whether media buyers are right to pull ads off Google's and Yahoo's contextual networks because of how loosey-goosey they are with their approach to placement -- they match ads to pages, rather than allowing the advertiser "channel control."

While it's true that Y!&Goog would benefit from better sites joining their networks, I agree with Seth that being so afraid to show your ads on "Joe Schmo's Sports site" could be doing the client a disservice.

I thought we already had this debate. In the early going, lot of us were critical of the contextual ad programs for a number of reasons - mine was simply the poor performance, fraudulent or crapulent publisher partners, etc. Others in the biz, with more of an agency bent (and most likely to cheer for Quigo, Sprinks, etc.), demanded that Google's content targeting allow more direct control of what websites ads show up on, as opposed to forcing advertisers to accept the open-ended "smart matching" concept that used semantic technology to match ads with content.

So... first Google responded with site exclusion. Then, they released a site-targeted flavor of content targeting, in a parallel program. That as a direct response to these agency-style demands. Site targeting allows you to browse a menu of sites, add them to your list, and only show your ads on them.

I monitored ads running in both flavors for several months. A funny thing happened: the old "flawed" content targeting program got better, and my approach to managing those campaigns improved. The ROI came in line with search. Meanwhile, nothing on the "site targeting" side was converting. The performance was much worse.

At a couple of conference presentations I guessed that this is in part because computers do a lot better job of matching my ads against a million potential candidate pages than I possibly can in scanning down a list of 50 so-so potential publisher targets. You settle on 20 or so of these sites, then become obsessed with spending the full budget on just those. They convert poorly, so you've overspent on this handful of websites. That's a fairly typical scenario.

In short, because of computers aiding in the matching, classic content targeting offers more efficiency, as the systems get perfected.

Seth, both the intuition and the data point towards there being nothing inherently wrong with Google's approach to matching ads with content. No, the program isn't perfect, but placing high-CPM ads on big brand sites just because I want to appear respectable isn't exactly a challenge. It's more of the same: take too much of the client's money, and waste it, and claim the blue-chippiness of that approach as a benefit.

Both approaches -- the finicky put-me-only-here approach, and the "ROI-or-else" approach -- work in the marketplace. For very different reasons. Funnily enough, Google now offers two parallel programs to suit different ad buying constituencies, and are working on rolling out multiple ad products down the road, to keep everyone happy.

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