The business model is both basic and complex at the same time. Google and Overture can make your paid-ads appear on multiple web properties if those web properties contain keywords relating to your ad.
The Dependency Of Contexual Advertising
This is called “contextual distribution” and, as a business model, it makes as many dollars as it makes sense. Much of Google’s annual profit is based on paid-advertising and, judging by their most recent profit statements, so is Yahoo’s (through ownership of Overture). Contextual distribution is a good deal for website owners as they receive a commission on every click-through that comes from their sites. Google calls their program AdSense and Overture calls theirs Content Match.
Ads from both firms appear in literally thousands of different places such as other search engines, private and corporate websites, personal blogs, online newspapers, Gmails, etc… As long as Google, Yahoo and the web community at large can produce virtual real-estate, there will always be room to plant virtual billboards. The shear size of the market and their methods of contextualizing ads makes it an extremely complex business. Tracking and reporting on millions of unique business relationships is complicated by the fact that there is two different types of relationships to report on. The first relationship is between the search firms and the advertisers. The second is between the search firms and the webmasters who own the spaces in which ads appear. Disgruntled rumblings are being heard from both sectors.
Advertisers feel threatened whenever a particular campaign does not produce expected results. This can happen for any number of reasons but, being human and having paid real money, the advertisers are liable to target one reason and blame it for all their woes. Click fraud is a very real problem for the search engines. Now that advertisers are starting to look for reasons their campaigns are not making money, the specter of click fraud is receiving lots of attention. Google and Overture are working hard to track and eliminate click-fraud and products such as Click Detective have been developed to combat it. Nevertheless, advertisers are becoming wary and not necessarily due to personal experience. The search engines will have to do more to dampen the fears of advertisers in the near future. This is a perception issue as much as it is a real issue and today’s perceptions have a weird way of driving future realities.
On the other side of the server sits the website owner. Many have been complaining that Google and Overture are not offering sufficient details of their accounts to judge what is working and how much money they should be earning. According to one, a report he received did not make any sense whatsoever and he was unable to find anyone at the search-firm to help him make sense of it. Other search firms such as Espotting, Ask and Lycos are vying for the real estate Google and Overture currently enjoy and stronger business planning support may sway some webmasters away.
Google and Overture are absolutely dependent on strong and sustaining business relationships with advertisers and webmasters. Their bottom lines rely on the complexities of contextual paid-advertising and sustaining their partners is a basic survival issue for both.
Jim Hedger is the SEO Manager of StepForth Search Engine Placement Inc. Based in Victoria, BC, Canada, StepForth is the result of the consolidation of BraveArt Website Management, Promotion Experts, and Phoenix Creative Works, and has provided professional search engine placement and management services since 1997. http://www.stepforth.com/ Tel – 250-385-1190 Toll Free – 877-385-5526 Fax – 250-385-1198
