Revisiting Content-Phobia In Paid Search
While I am on holiday this week, through the magic of Internet time and custom tubes, my column isn’t. During this time off I’ll be taking time out for rest, reflection, and especially, a hiatus from one of my several jobs: Designated Undercompensated Google Ad Salesman.
What, you say? Google ads sell themselves? $14 billion in annual revenues would seem to suggest that yes, they do.
But recall that about half of those revenues come from non-search inventory: the contextual ads Google facilitates in partnership with tens of thousands of online publishers. Because—yes—the search ads by and large sell themselves, Google has put a ton of effort into moving the contextual inventory. And unbeknownst to skeptics, they’ve done much to improve it for advertisers. Although the financial breakdowns in annual reports are a bit difficult to interpret, a rough reading of the financials suggests that the share of overall revenues accounted for by the "Google Network" dropped again in fiscal 2007, to around 36%, from a high water mark four years ago near 50%. Google’s revenue growth overall has been driven primarily by the core: ads showing on Google Search and a few other Google-owned properties.
The first revenue growth hit Google took in this vein was largely based on smart pricing (an actuarial-type formula that paid low quality advertisers less per click) and stricter policies designed to weed the low-quality and nonconverting inventory out of the network. What was left gave a much higher-quality click to advertisers for any given click; even so, not all advertisers have been able to make the best of it.
Content-phobia is very real among Google advertisers. In spite of the many improvements in the platform and years of online advertising experience among clients, many a prospective client still comes to me with the casual comment that "we shut the network off - we found it just didn’t perform."
Here I’ll look at good reasons for advertisers to have taken just this action, and then some reasons they should consider updating their thinking. Finally, I’ll offer some quick tips on how to get back on the contextual advertising horse.
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