March 26, 2003 3:03 PM PST

Google, ad networks team on text ads

Google has partnered with two online-advertising networks to display pay-for-performance text ads across sites affiliated with the networks--a move aimed at rapidly expanding the search giant's marketing business.

In the last month, Google's AdWords, or text-link, ads have started appearing on sites belonging to Web publishers that are members of major ad networks, including Fastclick and Burst Media--which combined represent sales of ad space on nearly 24,000 sites. Google said it started syndicating ads to Fastclick and Burst, among others, as part of a test of its newly minted service to place text ads on pages selected for their relevance to a marketer's products or services.

By tapping ad-sales networks with ties to thousands of publishers at once, Google accelerates its efforts to align with publishers for contextually relevant advertising. The deals also mark new territory for the online ad networks, which went out of fashion after the dot-com bust when Net marketing budgets dried up and questions about Web advertising's effectiveness haunted the industry. As search marketing heats up, ad networks are quickly joining the fray.

"Anything that is going to drive marketers to the Internet and (help them) recognize the value of the medium is good for all of us in the ad game," said Jeff Hirsch, chief revenue officer of San Diego-based Fastclick, which specializes in selling graphically rich advertising, including pop-under ads, across a network of 22,000 sites.

Hirsch said Fastclick has partnered with Google, but he declined to comment on the specifics of the deal.

In the last year, search-engine marketing has emerged as a bright spot in the online-advertising market, serving to revitalize the industry and the companies that leverage such marketing, including Web giant Yahoo. Because of its effectiveness for advertisers, Web publishers and surfers, search marketing has become one of the most competitive and evolving areas in the industry, sparking a slew of acquisitions. In the last month, for example, Overture Services bought technology and assets of AltaVista and Fast Search & Transfer to compete head-to-head with Google in Web search as well as in pay-for-performance search advertising, a market it pioneered.

Aiming to swiftly extend their ad networks, Overture and Google have both announced programs to place cost-per-click listings on content-targeted Web pages, beyond search-related pages. But Google so far is ahead of the game, having signed deals with Knight-Ridder Digital, the San Jose Mercury News and HowStuffWorks.com to begin the service.

The formula takes a page from search-related advertising, in which marketers bid for placement next to or within query results related to specific keywords; advertisers pay only when visitors click on the links. For Google advertisers, the sponsored results appear not only on Google.com, but with the company's partner sites, including America Online and EarthLink, if the advertisers so choose. Advertisers now have the option to appear on Web pages unrelated to search.

To provide this offering, Google uses its core search technology to understand the meaning of a Web page and to serve a relevant marketing message to that page. For example, it can display an ad for transmission parts on an automotive page at HowStuffWorks.com. Or, on the Web site SailingTexas.com, a visitor might see six Google-sponsored ads related to sailing lessons on the right-hand side of one of its pages. The downside of this is that the ads could be competitive to the publisher's own offerings. The upside is that the links could boost ad revenue to the publisher.

Major publishers such as CNN.com and ESPN.com, as well as small publishers such as SailingTexas through the Fastclick network, have gotten in on the act because of potential revenue.

Such a system was the dream of advertising networks during the Internet heyday--and the promise of the medium to online advertisers. Companies such as DoubleClick and Engage, which are no longer ad networks, sold the idea that, with insight into surfers' habits across multiple sites, marketers could target audiences with desirable traits. That dream collapsed in the face of privacy concerns and the quick devolution of the market after the dot-com bust. Ad networks largely tailor promotions to people visiting categories of pages such as finance or autos, or they can update an ad campaign after determining how it performs on certain sites.

Ads on the search-result pages of Google and others have been effective at driving people to marketers' sites when they are looking for something specific, as suggested by the keyword they entered to begin their search. With such technology, Google says that it can do the same with ads on nonsearch pages.

While some people say the ads are highly targeted and relevant, others say they can fall short of the successful recipe that search offers. Specifically, some advertisers say they do not drive as many sales as search-related links do.

Kevin Lee, CEO of search engine marketer Did-It.com, said that search engine marketing on content-targeted pages can be more effective than banner advertising and performs close to as well as search marketing. For some advertisers, however, the number of people responding to the sales pitch once at the marketer's Web site can drop by 40 percent, he said.

"If there's a really good fit, it can actually outperform search marketing," Lee said.

 

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