Competition

Competion helps advertisers, not publishers

[jhood]

I happened upon this in the MSN AdCenter forum:

"We've been running campaigns for several months. Very low cost-per-click. Where we pay $2 in Google, we get clicks for 5c in adCenter. The cost-per-conversion is $15 in Google and $3 in adCenter."

All those publishers who complain constantly about AdSense and await the dawning of competition should pause to consider whether competition in the contextual advertising market will be helpful to publishers ... or advertisers.

Econ 101: Competition in what is essentially a commodity market helps the purchaser, not the seller.

[hunderdown]

And so the question is, how do we as publishers avoid "commodity hell"?

I don't know about you, but I am fairly certain that my site is not a commodity.

[alwaysthinking]

Too bad MSN can't deliver nearly the amount of Traffic that Google can to publishers' web sites, especially those with tech type content, and thereby limits the exposure rate of the advertsing campaign. Therefore many advertisers will have to consider the trade-off between speed of acquistion & cost per acquisition.

Many advertisers have time constraints or prefer to pay extra ad fees, in order to realize a quicker ROI. Of course, others prefer to be frugal with thier advertising expenditures, and don't mind generating sales at a slower pace.

So it will depend upon the advertisers's target market and time horizon for their marketing campaign, as to whether MSN ad program is more "cost effective" than Google's.

And this also doesn't take into account the "quality of traffic" and it's corresponding converson rates. advertisers will have to experiment to determine which ad program is more effective for their particular target market.

My guess is that it will end up that Google will be more effective for tech advertisers, and MSN for more generalized market niches... and advertisers for a whole range of additional products & services will find that Google & MSN ad programs work out about the same for their campaigns... when all factors are considered. (imho)

[guru5571]

The premise of thread is flawed. Competition will help both advertisers and publishers. It's the brokers in the middle that get the squeeze. i.e. Google, Yahoo!, MSN.

Right now Google is in the driver's seat (virtual monopoly) therefore they take a nice big cut, but not too big;)

If adCenter doesn't deliver better money for publishers they won't be a player and will be full of Adsense rejects. So unless MSN delivers something better, they will remain a niche player and will be fencing with the likes of Kanoodle and AdBrite.

[guru5571]

In respose to ECON 101. A little concept known as supply and demand. Publishers rates will only fall when the increase in the amount of publisher space outstrips the increase in the demand from advertisers. Obviously there are different amounts of flux depending on the keywords, etc.

Any competition between brokers will simply reduce broker fees. There may be some decrease for publishers where certain keyword markets become more efficient (liquid).

[danimal]

competition is beneficial for publishers in a number of ways... for instance, with ypn you can choose whatever targeting category you want... it's a great way to fight the ad blindness that comes with those repetitive adsense ads.

adwords has whored out their prices to be so low that the program is swamped with mfa's and directory garbage... i haven't seen very much trash with ypn at all.