Zeroing in on content-targeted ads

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By Carol Krol

Content-targeted advertising will come into its own this year, becoming the fastest-growing part of interactive marketing. Spending on content-targeted sponsored links is expected to increase over the next year by nearly 10%, besting advertising growth overall, which is expected to grow 6%, said Robert Coen, director of forecasting at Universal McCann, in his latest ad forecast.

Content-targeted sponsored ads are search engine results that appear alongside relevant editorial content within Web pages rather than on a search engine results page. Several search engines, including Google, offer content-targeted advertising. Google’s product is called AdSense.

This was among the findings of paid lists provider Kanoodle in its first "Content Targeting Survey." Advertisers are beginning to look beyond search results to content pages to find distribution for their ads, according to Kanoodle.

Seventy percent of advertisers surveyed by Kanoodle used sponsored links in 2004; 26% spent $100,000 or more on campaigns. In addition, almost half (46%) said they used content-targeted ads for branding and 40% said they used these ads to increase overall revenue.

JupiterResearch analyst Niki Scevak said when the ceiling of inventory is reached in keyword advertising, many advertisers look for other online opportunities to add to the marketing budget. "I think what you’re seeing is a lot of activity for marketers’ demand for inventory. Content advertising is certainly a consideration," he said.

Kanoodle executives agree. "Advertisers have one major wish and that is for more," said Mark Josephson, Kanoodle’s senior VP-marketing and business development. "They want more inventory. This research shows there exists a whole world of page views outside of search on which marketers can place their sponsored links."

Advertisers in the Kanoodle survey said they are also looking for more ways to target using sponsored links beyond targeting based on editorial content. Almost two-thirds (63%) said they would like to look at past Internet behavior; 49% indicated they wanted to look at geographic location of targets.

"Our advertisers are telling us they want more ways to target on content pages," said Josephson. Other ways might include targeting that is based on "firmographics" (the business equivalent of demographics), demographics and dayparts. "All of the ways advertisers have targeted other media they should be able to target sponsored links," Josephson said.

Another reason contextual advertising is growing more popular is its price. "Pricing is attractive from an ROI perspective," Scevak said. "Since it’s a dynamic auction market, the price will inevitably go up over time, but the current prices are favorable."

The Kanoodle survey was conducted by JupiterResearch, a division of Jupitermedia Corp. in December among 725 current and potential users of content-targeted advertising.

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