September 17, 2007

We continue our discussion on new advertising methods and how they can be used in today's Web 2.0. It is becoming clearer that Internet properties which are better prepared to accomodate more interactivity, both for users and advertisers will do better in their specific market niches. Those sites also stand to gain an edge over their competitors and should help them become leaders going forward.

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Transitive Advertising for the Web (TAW) offers the advantage of switching older search advertising models into innovative marketing vehicles that are geared more for today's Web 2.0, while at the same time offering advertisers greater flexibility and more control over their Internet marketing campaigns.

It can be said that these new marketing vehicles for Internet advertising actually reverse the relationship between publishers and advertisers, since in older, more classic advertising models the advertiser held most of the control. They decide just how much budget they want to allocate and on which properties they want to apply it.

However, since the advent of Pay-for-Placement (PFP) networks such as Google's AdWords and in some cases Overture has changed this relationship in significant ways, Internet marketers and advertisers may want to study this new phenomenon a bit further.

In Pay-for-Placement (or pay-for-performance as it is sometimes called), advertisers are only paying publishers when their ad actually performs. Many observers and the advertisers themselves are now viewing this as a large shift in itself as far as media concept is concerned.

Google's AdWords programs even goes a step further by actually disaggregating advertisers from Internet publishers. Using PFP, advertisers are no longer selecting the publisher with whom they are doing business, but are instead selecting the specific keywords and the context in which their ads will appear.

Now, instead of advertisers buying PPC networks on specific publisher sites, they simply release their ads on the Internet on previously-identified servers where they can easily be found or on their own Web sites.

For example, these ads are now filled with information supplied by the advertiser themselves on who exactly they are attempting to target, what kind of market segments they want to be in and of course which ones they expressly forbid (pornographic sites or affiliate portals).

They also determine in advance what percentage of their budget they wish to allocate in that segment for the ad itself, based on a number of previously-set guidelines and according to their own research and in-house data.

After they are finally published, some of these PFP ads can be cut and pasted (similar to a link) into their own sites, on the condition these sites conform to the previously-set guidelines the advertisers dictate in their ads.

The PFP ads then track their own progress, and through RSS feeds or similar technology they have the ability to report back to the advertiser or marketing agency that produced the ad in the first place. Such feeds can report back on who has pasted the ad and into what sites, how many clicks that publisher has delivered and just how much money might be left in the advertiser's account.

Such ads then propagate themselves until they literally run out of money, after which they simply turn themselves off automatically. If the intended ads are working effectively and as planned, and if the ROI generated from them is acceptable to the advertiser, they can then allocate more budget to them and continue with their campaign.

In a way, some call this another form of viral marketing. What's more, it's publisher driven, meaning that it lets publishers decide which ads are appropriate on their sites and which aren't.

Publishers certainly won't place ads on their sites that don't perform, and they'll work harder in placing ads that do. This is good for advertisers, as their downside is protected by PFP.

Also, the upside is that the market is effectively optimizing their own ads as with AdSense, as well as honoring the crucial endemic relationship between publisher/author and the end-reader.

In a way, it can be said that publishers are in fact endorsing the advertiser, and that the publisher's endorsement must carry some weight with the reader.

As some skeptics could say, there could be some issues or problems with this advertising model. However, in the end, this new Internet marketing idea isn't any worse than the PPC model itself.

As many Internet advertising agencies will already tell you, this concept could be subjected to broadcast media metrics right at the source, since the concept isn't entirely new. CPM (Cost Per Thousand Impressions) is a term borrowed from print advertising and is widely accepted by traditional advertisers as a measure of reach and frequency.

In the older days of the Internet, if a company had a Web site that was essentially considered as "brochureware" by today's standards, they still called it a corporate site and they would still allocate advertising budgets to it just the same.

In early 2000 and after the Internet bubble burst, brochureware sites beyond initial branding were severely questioned. The ad industry shifted to the Cost Per Click model almost at the same time when eCommerce sites became more popular.

Back then, Internet advertising was considered effective if it drove additional traffic and sales to their site owners.

As a natural process and as a result of all these efforts, Internet users became more aware on how such broadcasted ads were trying to influence their buying decisions.

Then Yahoo and Google stepped in with a targeted market for advertising, based on CPC, that rewarded effective ads on various sites. Both ads and sites were then highly optimized with their targeted messages.

This marketing model works fine with advertisers as the only influencers and the only ones with sites. But it fundamentally ignores the influence of social networks. Exactly what happens when Internet consumers become users with their very own identity, ie with their own blog or corporate site with products or services to sell on them?

Overall, what’s different with new advertising concepts is that, it’s not the number of impressions you make, but exactly who you impress. Maybe there is a need to redefine new metrics.

A smart media buyer could wake up to this fact. On just an impression basis, the server hosting the ad could get say one dollar from CPM. Like any broadcast ad, a Web site with high traffic rates can generate a return. With an assumed two percent CTR (click-through rate) for say 2,000 views, the return of the CPC model would be $40.

If the topic used matches the advertiser's overall theme it will generate a return on investment (ROI). Google AdSense commoditized placement of CPC-based ads while placing the burden of performance on the ad writer. The problem with this is that it treats certain sites the same for placement as if similar topic language was used.

Where traditional metrics truly break down is with content syndication. Important changes are expected that I think could enable explicit tracking of a newly-devised metric.

For example, in RSS feed commercialization, users would wish they had full text feeds to manage in their news aggregators. For their part, Internet marketers and advertisers demand measures of how effective their ads in the RSS feeds are.

With Web 2.0, feeds and their ads are served on their respective Web sites. A model that would provide RSS feeds with trackable ads and with more user control over subscription would certainly be a welcomed addition in this segment.

Additionally, with NewsGator and FeedBurner fully funded and on their way to prime-time, expect more content aggregators to better enable a variety of publishing tools of their choice and that would better adapt to specific Internet ad campaigns.

Serge Thibodeau,
Professional SEO,
Rank for $ales.

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