Net Savvy

New generation web ad fuels dot.com recovery

In case you were one of the billions who thought Google was just a search engine, think again. It’s so much more. It is one of the most sophisticated, targeted network advertising agencies on the net or anywhere.

Those seemingly innocuous text ads that have been popping up on search engines, news and content sites all over the world are part of a new-generation, mega-successful network advertising model, called keyword search advertising. We are now starting to see these Google ads on a few South African sites, including Independent Online (IOL), which was probably the first of the major online publishers in this country to implement them.

The sheer simplicity of these plain text ads belies the brilliance and power of this advertising model. Google’s ads are sentient adverts; they are adverts with IQ. The Google system is so clever that it checks the content of a particular webpage and then delivers a targeted ad relevant to the content on that very page.

In IOL’s case the ads appear at the end of most of the website’s articles. These ads “know” what the IOL articles are about and are able to work out what a reader probably wants. Using Google’s lauded search algorithms, a page is automatically scanned for certain keywords and a relevant ad is served then and there as the reader loads the page in his or her browser.

For example, if I am reading an article on IOL about South Africa’s World Cup bid and the popularity of the vuvuzela horn, an advert to buy vuvuzelas can be automatically served on that same page by Google. The advertiser, perhaps in this case Vuvuzela Inc., would have signed a deal with Google, buying the keywords “vuvuzela” or “World Cup 2003”. Each time a web user clicks on the link in the ad displayed on an IOL article, Vuvuzela inc. pays Google, which then splits the revenue with IOL.

A problem that does emerge for South African online publishers is that these ads come with an overseas bias. There are a limited amount of ads relevant to South Africa that Google has signed up and can therefore serve. Although this will no doubt improve as more local advertisers sign up to the network, it does mean that the door is wide open for someone to set up an equivalent model locally that ropes in South African advertisers and publishers.

But internationally, these text keyword search ads have been so successful that they have emerged as one of the key drivers of the online advertising recovery from the dot.bomb slump.

This year the Interactive Advertising Bureau and PricewaterhouseCoopers reported that online advertising revenue in the US was $7,3-billion in 2003 – the first year-on-year increase since the internet bubble burst in 2000. According to PwC, keyword search ads accounted for 35% of all online advertising spend – by far the biggest contributor, surpassing that old internet stalwart, the much-maligned banner ad. Not only are these ads relevant ads but they are quick serve and don’t impact on a site’s download. Their click-through rates are also reportedly far higher than most other ads. The success of these text ads, has spurred Google to expand its service to also include image ads.

And some South African sites like IOL have made sure they aren’t missing out on their share of this ad revenue pie. It’s not enough to retire on, but IOL is said to be pocketing useful revenue from the ads it is serving on its millions of page impressions. And why not? If a website has the traffic and space, all a publisher needs to do is plonk a relatively simple piece of code on the pages, and then lie back and think of US dollar revenue streams.

There is not much else you need to do. Google does the rest. It finds the advertisers, provides the technology, serves the advertisements, does the reporting and then eventually issues the cheque. Have you ever come across an easier and more efficient way to generate online advertising revenue?

Matthew Buckland is editor of the Mail & Guardian Online @ www.mg.co.za

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