Contextual ads gather steam

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For many marketers, contextual Web ads, which appear to consumers who are effectively self-selected, are becoming not only a favored catchphrase, but also something of a holy grail.

Online search engines like Google and Overture are key tools in the "contextual" movement because they allow marketers to deliver the most relevant advertising to people when they are in the market and mind-set for a particular item or service. So too, are software applications such as WhenU, Gator, WeatherBug and Weather.com's Desktop Weather, because they sit on a consumer's PC desktop. These applications are gaining momentum among marketers for their laser-like targeting capabilities, enabling delivery of a relevant message when consumers are pre-disposed to receiving one.

"It's being able to target by mind-set and at the right time that is the most intriguing thing; you're reaching people at the key moment of the buying process," said Cari Weissberg, VP-interactive media director, Interpublic Group of Cos.' Hill, Holliday, Connors, Cosmopulos, Boston.

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Consumers agree to accept desktop applications such as WeatherBug when they download software from peer-to-peer online venues such as Kazaa, the music-download site. Marketers sign license agreements with desktop-application providers giving permission for their ads to appear at specific frequencies that are generated by an online algorithm. The algorithm triggers relevant ads to be delivered at various times based on a person's online behavior.

Online media strategists say they've seen results. While industry average click-through rates have fallen to less than a quarter of a percent, they're in the 2% to 3% range for contextual advertising.

While contextually relevant, desktop applications can still be annoying and intrusive to consumers. Additionally, Gator and WhenU have faced several lawsuits alleging copyright and trademark infringement for serving pop-up ads. A suit filed by online publishers against Gator was settled earlier this year. Last month, a federal court ruled that U-Haul couldn't prohibit WhenU from delivering competitors' ads to visitors to U-Haul's site.

"People are always going to complain about pop-ups and intrusion, but contextual pop-ups perform better. There isn't the same sense of frustration as generic pop-ups," said Paran Johar, general manager, Omnicom Group's Tribal DDB, Los Angeles, whose client Ameriquest Mortgage uses both WhenU and Gator for ongoing customer acquisition.

"Desktop applications are here to stay. They're a more powerful way to reach people," said Andy Jedynak, VP-general manager, AWS Convergence Technologies' WeatherBug. WeatherBug has 24 million registered users. When consumers register, they are informed that they will receive targeted advertising. The difference here is that they choose the advertisers they want to hear from.

AstraZeneca uses WeatherBug's Brand Wrap rich media ad format to promote free trial of Nexium, its acid-reflux drug: "People select you as their sponsor and they interact with our brand over a long period of time. ... It's a positive environment," said Jean Pundiak, senior ePromotions manager, AstraZeneca.

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