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Is Contextual Search Advertising Right For You?
by Patricia Hursh ©Copyright 2004
SmartSearch Marketing, Boulder, Colorado

Many search advertisers are currently evaluating content-targeted 
programs (also called contextual advertising). The expanded 
visibility can be great, but is it right for your business?  
These programs are relatively new in the search advertising 
world, and early results are mixed.

First, let's define contextual advertising and review how it 
works. Then we'll take a look at some recent results, and 
finally, I'll share a few recommendations. 

What is Content-Targeted Search Advertising?
With contextual advertising, pay-per-click search ads are 
displayed not on search engine results pages, but on related 
content pages across the web. This is accomplished by matching a 
site's content with advertisers' keywords. Ad sellers such as 
Google and Overture determine what a site is "about" using some 
combination of algorithms and human review. Ads are then served 
on these participating sites by matching content to advertisers' 
keywords. In this way, contextual advertising is a method of 
distributing paid search listings beyond search engine results 
pages.  

To illustrate, if a person is viewing a web page about Acapulco, 
Mexico on a website that is participating in a contextual 
program, a search ad for an Acapulco hotel might be displayed 
on the page. The ad is served based on the "context", or the 
subject of the web page.   

Who is Selling Contextual Search Advertising?
The two largest players in this space are, not surprisingly, the 
two biggest pay-per-click ad providers: Google and Overture.  
Google's product is marketed to publishers under the name "Ad 
Sense", and is simply called "Content-Targeted Ads" when 
presented to search advertisers. Overture's program is entitled 
"Content Match". Other search players offering contextual 
advertising include Industry Brains, Enhance Interactive 
(formerly ah-ha.com), Searchfeed, and Kanoodle. 

Where Are Contextual Ads Displayed?
Both Google and Overture have been busy building their publisher 
networks. Google content-ads are shown on HowStuffWorks, Mac 
Publishing sites (Macworld.com, MacCentral, JavaWorld, and 
LinuxWorld), New York Post Online, Reed Business Information 
sites (Variety.com and Manufacturing.net), U.S. News & World 
Report online, and thousands of other participating sites.    
Yahoo-owned Overture's ads are shown across Yahoo! (Games, 
Groups, News, Shopping, and Travel), several MSN areas (MSN 
Entertainment, MSN Money and MSN Family), InfoSpace, and 
Edmunds.com, to name just a few. 

How Do I Participate?
One important detail that catches many novice marketers off-guard 
is that when you launch a pay-per-click campaign on Google or 
Overture, contextual advertising is turned ON by default. You 
must proactively opt-out of the program if you do not want to 
participate. Once you know this, turning contextual ads OFF is 
easily accomplished by adjusting your campaign settings. 

How Do I Track Results?
Both Google and Overture offer the option of separating results 
for traditional keyword ads and contextual ads in their reporting 
systems, so advertisers can measure impressions, click-through 
rate, cost-per-click, and conversion (if you are tracking this 
through the ad provider) by each type of ad. 

Similarities: Traditional Search Ads vs. Contextual Ads
Contextual advertising and traditional search ads are similar in 
that advertisers buy both through the same provider, as part of a 
single campaign. In both cases, keywords and bids determine if an 
ad is displayed, and in what position it is presented relative to 
the competition. The same text ad is displayed (i.e., title, 
description, and URL) either way. Finally, advertisers pay on a 
cost-per-click basis. 

Differences: Of course the fundamental difference is that traditional search 
ads appear on search engine results pages after someone enters a 
query containing a keyword matching or relating to the ones you 
are bidding on. The key point here is that the person viewing 
your ad has proactively gone to a search engine looking for 
something related to your products or services.   

In contrast, content ads are not shown on search engine results 
pages at all, but rather on web pages containing content deemed 
to be relevant to your keywords. The people who see your ads on 
these pages are not necessarily actively searching.

This illustrates the fundamental difference between "search mode" 
and "surfer or browse mode". In fact, many advertisers view 
traditional search ads and contextual ads as very different 
things, and believe that contextual advertising is more 
appropriately compared to ad placement in niche magazines than 
to traditional pay-per-click advertising.

Now, let's look at results…

Recent Results
Contextual advertising is not a new concept in traditional 
marketing or eMarketing, but it is a fairly new option for search 
advertisers. Google's program has been around for about a year, 
Overture's a bit less. So far, ad providers are reporting that 
results for contextual ads are similar to those for traditional 
pay-per-click programs. However, many advertisers complain that 
click-through and conversion rates are much lower.
   
Based on this feedback, Overture now allows separate bids for 
traditional and contextual ads. But Google has not followed 
suit: their keywords have *one* bid associated with them, whether 
the advertiser is engaged in search advertising only, or search 
plus contextual. 

My personal experience is that click-through rate tends to be 
much lower, and cost-per-conversion a bit higher, with contextual 
ads. However, I've also found that contextual advertising can 
provide substantial impressions at a very competitive rate. For 
example, with one of my clients, 80% of their monthly search 
advertising investment and 83% of clicks come from traditional 
pay-per-click ads. The 20% of their budget attributable to 
contextual ads is, in fact, less efficient from a pure 
cost-per-conversion basis. So you might be inclined to say… 
"turn it off". But not so fast: By adding content-targeted ads, 
the client has gained nearly five million contextual impressions 
per month at an additional cost of only $4,000. Because this 
amounts to a CPM of about $0.80, they are very pleased with these 
results. (Keep in mind that this company is in a *very* active 
search category -- most advertisers will not see impressions of 
this volume.) 

Recommendations
Bottom line: Test and measure before you invest significantly.
I believe that content-targeted search ads are great for 
advertisers wanting to maximize their reach and frequency across 
the web in a very relevant way. If you are interested in volume 
of impressions or maximum exposure, contextual advertising may be 
perfect for you. I've found that this can be an extremely 
cost-effective way to enhance a brand online, and your results 
may be very favorable on a cost-per-impression basis when 
compared to other methods. 

Contextual ads are also great for companies who have already 
fully utilized the traditional keyword inventory available to 
them, but who continue to look for additional online advertising 
opportunities. That said, advertisers who are driven solely by 
cost-per-conversion should test the waters carefully before 
engaging in a full-scale content-targeting program. 

Additional Resources
To learn more about Overture's program and see an example of 
how a contextual ad appears on a website, visit Overture's 
advertising center: 
http://www.content.overture.com/d/USm/ac/ba/cm.jhtml. 

For Google, visit: 
https://adwords.google.com/select/faq/sample.html

Note: Website *publishers* need to evaluate contextual programs 
from the other side of the fence... that is, they should consider 
the possibility of generating additional revenue by allowing 
content-targeted ads on their sites. But, that's another article 
-- this analysis presents only the search advertiser's point of 
view. 

This article was first published in the High Rankings Advisor 
(http://www.highrankings.com/advisor). 

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A true pioneer of electronic marketing, Patricia has been using 
technology to improve marketing and communications for more than 
a decade.  Today, as president and founder of Boulder 
Colorado-based SmartSearch Marketing, Patricia and her team 
specialize in performance-based search engine advertising 
campaigns.   

More information on SmartSearch Marketing and Patricia Hursh is 
available at: http://www.SmartSearchMarketing.com 
Email her at Patricia@SmartSearchMarketing.com
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