New Ask Jeeves Sponsored Listings Program Lets More Advertisers Buy Direct

After weeks of rumors, Ask Jeeves unveiled a new automated paid listings service today -- Ask Jeeves Sponsored Listings -- that will allow anyone to purchase ads directly on the Ask Jeeves network rather than having to buy placement via Google or work through an Ask Jeeves account rep.

Google is the primary way most advertisers currently appear at Ask Jeeves. Those buying ads on Google also automatically show up at Ask Jeeves and other Ask-owned properties through a partnership that began in September 2002, unless an advertiser specifically chooses to opt-out of the Google Network to run ads only on Google's own sites.

The Ask Jeeves-Google partnership isn't ending. Google's ads will continue to show up on Ask Jeeves. But now, any advertisers that wishes will easily be able to purchase placement directly through Ask Jeeves itself.

"The relationship with Google is a strong one, and the intention here is not to replace it," said Paul Gardi, executive vice president and general manager of the new IAC Advertising Solutions group within Ask Jeeves-parent company IAC. His group is running the new program. "The intention is to help advertisers who want a direct relationship with Ask Jeeves."

The move means that over time, many of Google's ads will be "backfill" to Ask Jeeves ads. That is, Ask Jeeves will first list its own ads, then show ads from Google if it doesn't have enough ads of its own or when Google ads would generate more revenue for Ask Jeeves.

Google ads have already been backfill to a minor degree because of the preexisting Ask Jeeves Premier Listings program. Through that program, advertisers would negotiate directly with Ask Jeeves to keyword-target their ads on a cost-per-click basis.

Because the program involved ad reps, it was only really available to high-end advertisers making a significant spend. In the new program, any advertiser can buy direct through Ask Jeeves.

"We've not had the ability to service the larger number of advertisers that want to be on Ask Jeeves. With the new product, it's automated and allows a large number of advertisers to purchase and manage the advertising directly on our network," said Gardi.

Will They Buy Direct?

Now that Ask has built it, will the advertisers come? Those who were in the existing premier listings program almost certainly will and in fact have now been transitioned into the new one, which officially replaces Premier Listings. As for others, time will tell once the program opens on Aug. 15 to anyone wishing to reach the Ask Jeeves network in the US. Within the next 12 months, it will also come to Ask UK.

Why would people buy direct? Most likely because they'll want to pay a premium to be ranked well at Ask Jeeves. A premium? Yes, because Ask will be showing more than one ad from its own program only when it determines will will earn more from those than by carrying the Google ones. The easiest way for most advertisers to influence that will be to pay more than they'd pay through Google.

Why wouldn't people buy direct? The hassle factor. Creating and managing search ads is a complex task. Automation makes things easier, but it's still a case of diminishing returns when deciding how many program advertisers will explore.

The Hassle Factor

Most search advertisers currently buy both Google and Yahoo, understandable in that by doing just those two programs, an advertiser currently reaches practically the entire searching audience in the US. That's because Google ads also show up on AOL and Ask, while Yahoo ads show up on MSN.

MSN plans its own much-publicized paid listings network. When that arrives, ETA likely of this year or early next, it will be the natural third choice given that MSN will almost certainly wean itself from carrying Yahoo ads as backfill. In other words, at some point, to be on MSN you'll have to buy through MSN.

In contrast, Ask Jeeves has the smallest percentage share of of the US search market, around five percent as of May 2005, according to Nielsen//NetRatings.

Yes, some will consider Ask a fourth network worth buying in addition to the others. But many are likely to figure sticking with Google to get on Ask is good enough. And if Ask dumped Google, advertisers might decide it's not worth the hassle of extra work to reach those on the Ask Jeeves network.

As said above, Ask Jeeves has stated no intention of abandoning Google. The companies have a partnership that runs through 2007, allowing Ask to carry Google's listings while having its own programs, as it has had even before this latest rollout.

But after that? Sure, Ask potentially may dump Google to go it alone. But more likely, it will continue to want backfill and have three suitors -- Google, Yahoo and MSN -- all looking to cut a sweet deal, if it holds or increases its current traffic levels.

Number Of Ads & Who Shows Up Where?

Earlier rumor-mill reports that Ask will be selling the top three listings somewhat incorrect, and I expect you'll hear this fallacy restated for some time going forward.

Ask says it's likely it will show up to three of its own ads, but it may show less -- perhaps only one or two. It might also show more, in some cases.

The general rule of thumb is this. If Ask thinks it will make more money from its own ads, it will carry more of those in preference to Google's. If it has five strong ads, then you might see five.

Five? Just how many paid listings does Ask carry? It depends. Over the past year or so, Ask has used a variable system. In general, it will show more ads for queries that it deems to be commercial in nature and especially where the Ask Jeeves audience is sensed as tolerant of more ads.

In other words, say Ask shows 10 ads on a query like viagra and finds that traffic levels and clickthrough stay just a solid as when it had only five ads. Then it's going to deem showing more ads in that case a success. But if there was a drop out, then it might reduce ads.

Assuming Ask does show more than one of its own ads, how does it rank them? Similar to how Google worked until recently, it's primarily a cost-per-click times clickthrough rate calculation. Those with the highest multiple come out on top.

Formats & Featurs

Ask is smartly embracing a "standard creative" ad format, that of Google's, a title and two short lines. The Yahoo "standard" is much different. By using Google's, it's a snap for advertisers to move the same ads they do for Google over to ask.

Things aren't entirely the same as Google, however. Google has a variety of editorial rules on what it will and will not allow. For example, Google won't allow ads for guns. Ask Jeeves, potentially, may allow this.

The Ask program also has a variety of features you'd expect such bulk uploading of terms and budgeting. Ask also says it does monitor to try and detect and prevent click fraud.

Duplication & Buying The Network Or Nothing

What about duplication? If you buy the Google Network, you get Google and Ask Jeeves, along with other sites. That means your ads might show up twice at Ask Jeeves. But if you limit your buy to just Google properties and buy Ask Jeeves separately as a solution, then you'll end up missing out on having ads appear at AOL and other sites.

Ask admits the situation is possible but says it's not as likely as it seems. And if Ask is wrong, it says there are systems in place to solve that.

"If it becomes a problem, we have ways to deal with it. I don't think advertisers will be too concerned about multiple listings and they'll be happy to get the click. The question for us is will it bother the consumer?," Gardi said. "We've chosen to go with this implementation and don't want to get specific other to say we have headroom if we need it....we can figure out how to address it."

Can you buy just Ask and not the entire Ask network. Sadly, no. Sadly? While Gardi says the network performs well, it's long overdue that advertiser should be able to pick and choose sites where they want their search-targeted ads to appear. Neither Google nor Yahoo allow this with search target ads. Ask missed an opportunity to show them up and give advertisers more control in this.

How about non-search targeted contextual ads? "We're obviously going to be thinking about expanding into contextual," Gardi said.

By the way, another long-standing Ask Jeeves ad program -- Branded Response -- is going away in the wake of the new program, at least on Ask Jeeves itself. "It doesn't fit inside of our plans or Ask," Gardi said. Branded Response will be dropped from Ask Jeeves at the beginning of September, but it will continue on other Ask Jeeves-owned sites.

How Was It Developed

Ask Jeeves says it built the technology internally for its new program but also licensed some parts from a third-party vendor that it won't name. Why not name if the other vendor was Miva, for example? It's a likely candidate in having long-standing technology in the area and a licensing program.

"A lot of the reason we don't want to talk about our partner is that we developed a lot of this in house. A big piece of it is not from the partner. We're going to leverage off the IP [intellectual property” of the organization that we have for search," Gardi said.

What about patent worries. Google settled a patent dispute over paid listings with Yahoo last year. A dispute between Miva and Yahoo had a mistrial this year.

"We're comfortable with the conversations we've had with our technology partner and what we've done, so we're not concerned about right now," Gardi said.