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AdSense is changing the market?
bcc1234




msg:1460775
 9:59 am on Jul 22, 2003 (gmt 0)

Just a few months ago online advertising was the buyers market - and now, I already had two publishers telling me to take a hike cause they could get more from AdSense. And it's not even that popular or well known yet.

I guess it's a good thing for the market (and of course for Google), but it does hurt some advertisers in the short term while probably benefits others.

I don't have any content sites, so I never tried to sign up with AdSense, but I get a feeling that the entry barrier is much lower than for many other networks. On top of that, fine-grained targeting also results in higher profit per pageview than with other networks.

Oh well, back to looking for affiliates... talk to you later :)

 

claus




msg:1460805
 11:42 am on Jul 23, 2003 (gmt 0)

I agree on the corporate thing. Today i actually found myself recommending AdSense to a small department of my home countrys largest overall advertiser (all media, largest being cash as well as eyeballs).

<added>this was as an alternative to banners though, not affiliates, everybody knows that clickrates on banners are low, but the company has not yet done affiliates in the traditional sense, so it's more of a leap or bypass of that stage. It was not my intention to bypass it though, it just never came up.</added>

/claus

<edit>removed link to london hotel search - it is actually quite hard to find a hotel homepage that is just that and nothing else using non-specific search terms</edit>

[edited by: claus at 12:37 pm (utc) on July 23, 2003]

chiyo




msg:1460806
 11:52 am on Jul 23, 2003 (gmt 0)

great points on corporate ad buying.

By raising their adwords bids for a short period they may, in a few months at least once adsense is on a critical mass of sites, be able to blanket many relevant sites for a certain time with ads.

From memory, before this they had to buy up massive amounts of space on Y!

It wont completely replace these types of campaigns of course as there are advantages/disadvantages including less impact than rich media and less flexibility with ad design if its a pop up from Y!, but does offer a credible alternative in some instances.

Applications i think in product launches, rebrandings, one-off events, etc etc. Maybe much cheaper and definately much more targeted than traditional online quick campaigns like this. Before now, you had to be a Y! to do this or pay heaps to Y!

And get this... With Y! or MSN this may take several days or weeks to set up.

In Adwords it will take a minute or two.

VERY exciting stuff for advertisers, and in some ways, something to worry about for ad agencies.

You probably wont be able to do this on OV engines, as it looks like they are only going for major sites and publishers and volume. google's disaggragted web, including smaller but more friendly, homely, and high-brand-loyal sites and communities would be a natural for many product launches.

cornwall




msg:1460807
 12:55 pm on Jul 23, 2003 (gmt 0)

>>You probably wont be able to do this on OV engines, as it looks like they are only going for major sites and publishers and volume. google's disaggragted web, including smaller but more friendly, homely, and high-brand-loyal sites and communities would be a natural for many product launches.

That is one of the interesting issues. Will Google introduce a minimum size requirement for publishers?

On the one hand niche sites give good targeting, on the other hand they are (comparatively) expensive to administer if small, and also, I suspect, more difficult to police (if you are getting hundreds of clicks you are not going to try to pump up your counter with bogus clicks) , while the small site may be more likely to (conjecture)

My guess is that they may introduce higher minimum payment (say $1000 rather than $100 as at present) or a minimum number of impressions per day/month

loanuniverse




msg:1460808
 1:09 pm on Jul 23, 2003 (gmt 0)

Nah, AdSense is paying what suckers think that space is worth, not what it's really worth. That's the problem. Too many advertisers get into bidding wars and publishers benefit from this.
Well that is exactly how market value is determined.... It is worth what people are willing to pay for it. Even Real Estate is appraised this way {disclaimer=there are other methods of appraising real estate, but try telling someone selling his house that according to the cost approach his house is worth only $200,000 when the neighbor just sold an identical house for $400,000 and you would get laughed at.}

This is another reason why the decrease in advertising expense will not be as catastrophic as some have predicted. You will have to keep doing it in order to keep up with the competitors. Either that or you will have to pay someone to create content sites to drive visitors to your commercial site, optimize the heck out of your commercial site or you will be in trouble.

My guess is that they may introduce higher minimum payment (say $1000 rather than $100 as at present) or a minimum number of impressions per day/month
I don't think this will happen. I hope it doesn't anyway :D Some keywords need as much coverage as possible.

chiyo




msg:1460809
 1:33 pm on Jul 23, 2003 (gmt 0)

>>on the other hand they are (comparatively) expensive to administer if small, and also, I suspect,<<

My feeling is that Adsense is much easier to administer than affiliate and other programs due to various factors. Due to this the "fixed cost per publisher" is much lower as a percentage of total cost than for other networks.

loanuniverse makes a good point too. With a large inventory, some advertisers with niche products/services have very few places to target, and niche sites will often do a much better job than a tiny section in a mega site like infoplease etc... With adsense, advertisers can have ads in several of these niche sites which otherwise would have been too small to negotiate separate arrangements with but together are significant.

As far as i can see, and for better or worse, googles strategy here seems to be to "let a thousand flowers bloom" than be hustled into a corner by a few monopoly players. Its the way the web was meant to work...

woop01




msg:1460810
 1:43 pm on Jul 23, 2003 (gmt 0)

I must say that the title of this thread on the front page is about the most semantically spinned title and description that I have ever seen on WW.

bcc1234




msg:1460811
 2:10 pm on Jul 23, 2003 (gmt 0)

woop01, I think the mods have removed the description.

added:
The initial idea was for me to whine a bit about how unfair life is :)

devlin




msg:1460812
 2:15 pm on Jul 23, 2003 (gmt 0)

Chiyo: It wont completely replace these types of campaigns of course as there are advantages/disadvantages including less impact than rich media and less flexibility with ad design if its a pop up from Y!, but does offer a credible alternative in some instances.

Yes, they will be perceived by some of the ad guys as having less impact (= taking up less bandwidth :)), but it may only be a matter of time before even the most mainstream people in the advertising world realise that text ads have a higher CTR than graphic ads.

Most of us who have been running banner ads for a while will have appreciated the far higher CTR from AdSense.

D

europeforvisitors




msg:1460813
 2:24 pm on Jul 23, 2003 (gmt 0)

If those "doorway" sites are cancelled or not, that doesnīt matter to the advertiser...As an advertiser I donīt mind them.

That's interesting, because most of the advertisers who have commented about AdSense here and elsewhere have been concerned about the quality of the traffic they receive from marginal sites. Your attitude seems to be:

"A click is a click"

While theirs is:

"Clicks from some sites are better (or worse) than others."

I can understand one reason why advertisers might be concerned about having their ads run on "doorway" sites: Because the sites themselves are likely to contain little useful information, users will be more likely to click on the AdSense ads to find the information they need. In other words, traffic from a doorway site is less likely to be "prequalified" than traffic from a real information site is--thereby reducing the conversion rate and ROI for the ad.

DaveN




msg:1460814
 2:32 pm on Jul 23, 2003 (gmt 0)

traffic from a doorway site is less likely to be "prequalified"

I disagree a doorway sites IMO tend to be completely targeted so it's down to Adsense to deliver the correct content, hopefully soon they will get their algo right.

DaveN

europeforvisitors




msg:1460815
 2:55 pm on Jul 23, 2003 (gmt 0)

I agree on the corporate thing. Today i actually found myself recommending AdSense to a small department of my home countrys largest overall advertiser (all media, largest being cash as well as eyeballs).

In an earlier life, I worked at an ad agency that represented many consumer, b2b, and industrial clients at a Fortune 500 company in the Midwest. Although some of that corporation's divisions focused on the mass or nearly mass market (tape, consumer sandpapers, office equipment), many were in highly specialized markets such as:

- Traffic control (reflective materials for stop signs, striping tapes for roads and crosswalks)

- Fire-resistant materials (various gunks, goops, seals, and blankets for office buildings, nuclear power plants, etc.)

- Microtaggants (tiny coded confetti-like bits that could be mixed with paint, explosives, etc. to identify the material's source for warranty or law-enforcement purposes).

Back in the 1980s when I wrote copy for these clients, most of their advertising was in highly specialized trade magazines, and sales were done primarily by field reps who obviously had limited time for calling on smaller prospects. Today, AdSense would be an ideal medium for such products and specialized markets, because careful choice of keywords would make it possible to reach everybody from the public-works director of a small town to an engineer selecting fire-protection products for a skyscraper to a paint contractor who doesn't want to get stuck fulfilling warranty claims for other contractors who are sharing a bridge-repainting project. In other words, those clients would be able to target by application instead of having to target by publication. And they'd be able to reduce the cost of sales to smaller markets as well as the cost of acquiring leads.

Even in the far larger consumer marketplace, there are some types of advertising for which AdSense is ideal. Airlines and hotel chains offer a highly perishable product, and many of them have special fares or rates for last-minute buyers. Instead of waiting for in-the-know customers to visit its Web site every Wednesday afternoon to find the weekly "Internet fares," why shouldn't an airline use AdSense to promote those fares to a wider audience? Better yet, if the airline really needs to fill seats between Detroit and Tokyo, why not run an AdSense promotion with keywords that specifically promote its MSP-NRT Internet fares?

In short, PPC programs like AdWords/AdSense aren't just for Web-savvy entrepreneurs--they also have great potential for corporate advertisers. Over time, they're likely to steal an increasing number of ad dollars (and pounds and euros) from mainstream media advertising--just as direct-response marketing and sales promotion have done over the last 20 years or so.

europeforvisitors




msg:1460816
 3:12 pm on Jul 23, 2003 (gmt 0)

I disagree a doorway sites IMO tend to be completely targeted...

Yes, but they're targeted to people who are seeking information, not necessarily to people who want to buy.

Think about it:

I'm curious about the Widgetco CoolShot 550 digital camera, so I do a Google search and find a comprehensive review at a digital-photography site. If I click on an AdSense ad after skimming through the review, I'm likely to be a serious prospect because I know the CoolShot 550 is a 5-Megapixel camera that will fit into my shirt pocket, take pictures in complete darkness, and upload images to my computer via Wi-Fi. I also know it takes great pictures, because I've viewed the sample images in the review.

If, on the other hand, I go to dons-doorway-site.com and find nothing but some boilerplate specs for that camera, I'm going to want more information. So, if I click on the AdSense ad, it doesn't necessarily mean I'm a buyer--I may just be looking for the information that I didn't find at dons-doorway-site.com.

Now, some advertisers are going to figure that a lead is a lead, and that I'm worth inviting to their site (even at the cost of a clickthrough) whether or not I'm going to place an order today. But not all advertisers will feel that way. Some will opt out of "content ads" entirely to avoid paying fifty cents or a buck every time an information-seeker clicks an AdSense ad at sites like dons-doorway-site.com.

The solution is obvious: Give advertisers more control over the kinds of sites where their ads appear.

Side note: Instead of creating "doorway sites" to make money from content ads, people like Don (the owner of my hypothetical dons-doorway-site.com) might be better off doing contract SEO work for advertisers. I think we'll see a lot of that in the future as SEOs contact AdSense advertisers with a sales pitch that says, "Why pay 50 cents or a dollar a click to be on a content page when you can have your own site rank high in Google?"

MaxMaxMax




msg:1460817
 3:13 pm on Jul 23, 2003 (gmt 0)

And with the "do not call" list proving so popular, a lot of telemarketing dollars are going to be freed up for other direct response channels...like PPCSE.

rcjordan




msg:1460818
 3:22 pm on Jul 23, 2003 (gmt 0)

>agree on the corporate thing. Today i actually found myself recommending AdSense to a small department of my home countrys largest overall advertiser (all media, largest being cash as well as eyeballs).

Thank you, claus. That was the point I was making/defending (poorly) here (msg 6)
[webmasterworld.com...]

loanuniverse




msg:1460819
 3:36 pm on Jul 23, 2003 (gmt 0)

As far as i can see, and for better or worse, googles strategy here seems to be to "let a thousand flowers bloom" than be hustled into a corner by a few monopoly players. Its the way the web was meant to work...
They also have a technology that matches contents with ads on the fly. It would be silly for them not to leverage it since their closest competitor {OV/Yahoo} can not do the same.

The point about the do not call list is a good one. In addition, according to an article in this week's BusinessWeek, the search related advertising is supposed to double by 2006 to over US$5.5 Billion. The link to the article is under the Google/IPO/Finance forum.

claus




msg:1460820
 3:53 pm on Jul 23, 2003 (gmt 0)

rcjordan, that post #6 goes for media brokers as well, and personally i think your way of stating it is both clear and accurate :)

europeforvisitors:
>> those clients would be able to target by application instead of having to target by publication. And they'd be able to reduce the cost of sales to smaller markets as well as the cost of acquiring leads.

Those were precisely my thoughts.

bcc1234:
>> Just a few months ago online advertising was the buyers market - and now, I already had two publishers telling me to take a hike cause they could get more from AdSense.

And then there's the auctions system. Certain advertisers will really want to be #1. They will bid higher and it will still be a lot cheaper and more flexible than managing banners through an intermediate agent (not to mention traditional media) - i dont see prices drop as it gets more well known. It's brilliantly conceived by Google.

/claus

<edit>added some</edit>

[edited by: claus at 4:08 pm (utc) on July 23, 2003]

DaveN




msg:1460821
 4:07 pm on Jul 23, 2003 (gmt 0)

I agree with you europeforvisitors it's just your definition of a doorway site is different to mine ;)

Dave

hooloovoo22




msg:1460822
 5:28 pm on Jul 23, 2003 (gmt 0)

In other words, traffic from a doorway site is less likely to be "prequalified" than traffic from a real information site is--thereby reducing the conversion rate and ROI for the ad.

the basic idea of adwords in the first place is ads on google's site in which there is NO information...just people looking for that term. if i could only pay for traffic that converted i would...but we're a long long way from that

bcc1234




msg:1460823
 9:55 pm on Jul 23, 2003 (gmt 0)

claus,
And then there's the auctions system. Certain advertisers will really want to be #1. They will bid higher and it will still be a lot cheaper and more flexible than managing banners through an intermediate agent (not to mention traditional media) - i dont see prices drop as it gets more well known. It's brilliantly conceived by Google.

That's my point exactly. They are not going to get cheaper. As a matter of fact, every new merchant joining the market will be able to shake it (even if just for a short amount of time).

cornwall




msg:1460824
 9:59 pm on Jul 23, 2003 (gmt 0)

>>They are not going to get cheaper. As a matter of fact, every new merchant joining the market will be able to shake it (even if just for a short amount of time).

If I assume that the premis is correct then why does it follow that their profitable run will be "just for a short amount of time".

Not quite sure why you are suggesting their profitable period will only be short, if you think bids will be at least as high as current.

bcc1234




msg:1460825
 10:15 pm on Jul 23, 2003 (gmt 0)

cornwall,
If I assume that the premis is correct then why does it follow that their profitable run will be "just for a short amount of time".

Not quite sure why you are suggesting their profitable period will only be short, if you think bids will be at least as high as current.

Ok, there are merchants A,B,C selling widgets.
They all have been doing so for a while and bid reasonably knwoing their ROI.

Then two new merchants (D,E) start selling widgets.
They don't know a thing about PPC or ROI, and even if they understand the concept of ROI (in a traitional sense), they have no meants to calculate it. What do they do? They start bidding for the first spot. They keep losing money and eventually stop bidding, but not before taking some market away from A,B,C. Finally, D and E are out.... And then two new merchants (F,G) join the market and the whole things starts all over.

It's like that now, so nothing new here.
What I was saying is AdSense provides an alternative for smaller publishers and thus has a potential to become the main source of paid traffic. Kinda like google for se traffic now, who could imagine that several years ago?

So right now, if there are some Ds and Es ruining my day on AdWords, I can make up with other traffic sources, but if AdWords (and similar services) become the only viable solution - then A,B and C won't have anything to compensate for D's and E's stupidity with.

hooloovoo22




msg:1460826
 12:30 am on Jul 24, 2003 (gmt 0)

They start bidding for the first spot. They keep losing money and eventually stop bidding, but not before taking some market away from A,B,C. Finally, D and E are out....

unless D gets smart and starts selling his widgets as a loss leader or imports them from china and takes a smaller margin for more market share.

in the long run, as more advertisers come aboard, cpc should go up and settle at a high rate - almost cost, as there are going to always be merchants getting new clients/customers at cost in hopes of turning into a long term customer.

cornwall




msg:1460827
 8:56 am on Jul 24, 2003 (gmt 0)

>>Then two new merchants (D,E) start selling widgets.
They don't know a thing about PPC or ROI, and even if they understand the concept of ROI (in a traitional sense), <<

Whilst that may happen against one or two keywords, I think my assumption would be that new players are liklier to be big corporations, and not bewildered amateurs.

To that extent ROI will be both important and monitored (more closely perhaps than "smaller, amateur" players).

If ROI stacks against traditional advertising (and take it from me, that is not very accurately measured) then more of the advertising budget of MegaCorp Inc will go on targeted web advertising.

I continue to be impressed by the targeting of Google ads - Hicksville, Illinois gets ads for Hicksville hotels, and Boonies, West Virginia gets ads for hotels in that town. If I were the advertising controller for Grot Hotels, I would be looking at this seriously as a way of getting guests for targetted hotels.

killroy




msg:1460828
 10:09 am on Jul 24, 2003 (gmt 0)

I still think there is great potential for AdSensers and Adwordtizers to work together for mutual benefit.

As Adsenser (well, and adwordtizer) I have the unique perspective of knowing exactly where some adwordtizers targeting is going horribly wrong, and a unique interest to help them get it right.

I'm not interested in american firms selling unexportable products to my local visitors in my country. I'd LOVE to tell them about geo targeting and therefore improve their CTR, ROI, and my site ads and targeting too. It's win-win all the way.

I hope they will set up a forum, or internal posting system, where I can leave messages to particular adwortizers and let them know about istargeting to save them money, and improve my CTR.

SN

jilla




msg:1460829
 11:57 am on Jul 24, 2003 (gmt 0)

hooloovoo22 said: the basic idea of adwords in the first place is ads on google's site in which there is NO information...just people looking for that term. if i could only pay for traffic that converted i would...but we're a long long way from that.

I agree with that. When people click on adwords from google search engine they are NOT seeing information about digital camera model xyz.. they are clicking on that phrase .

So, a doorway page that has minimal information is not providing less information than when someone clicks on the phrase from google's search engine results page. I feel it's up to the google adwords advertisor to provide the information that will sell though of course any doorway page would need to provide some degree of information on the product to not get reported anyway.

europeforvisitors




msg:1460830
 2:46 pm on Jul 24, 2003 (gmt 0)

I feel it's up to the google adwords advertisor to provide the information that will sell though of course any doorway page would need to provide some degree of information on the product to not get reported anyway.

If Google's search results get cluttered with ersatz "content sites" as they are with affiliate sites, Google is likely to respond with changes to the AdSense program. These changes could include:

1) Raising the standards for acceptance (and retention).

2) Restricting the use of AdSense code to sites that have been approved by Google.

3) Raising the payout minimum to $500 or $1,000.

I think we'll see other changes, too--e.g., the ability for advertisers to select or block sites by domain--but the three changes that I've mentioned above would go a long way maintaining the program's reputation with advertisers and discouraging AdSense "doorway sites."

Disclaimer: I'm not saying that Google should make these specific changes, so no flames, please. I'm just saying that Google could be forced to become more restrictive--and that, if Google does become more restrictive, the fault will lie with the get-rich-quick crowd.

saoi_jp




msg:1460831
 3:07 am on Jul 25, 2003 (gmt 0)

europeforvisitors:
The solution is obvious: Give advertisers more control over the kinds of sites where their ads appear.

However, isn't there an additional point being overlooked here? Let's say someone searches Google for that camera you mentioned. These same ads will appear on their search results page. So rather than two senarios (the doorway and the rich-content sites) there are actually three (add the search result page of Google itself).

added: Didn't notice that hooloovoo22 replied with the same point earlier.

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