Search Engine Contextual Ads Gain Momentum

A special report from the Search Engine Strategies 2003 Conference, August 18-21, San Jose, California.

A relatively new form of search engine advertising has nothing to do with search engine results. Instead, “contextual ads” are displayed on other sites’ Web pages, based on the content of pages people are viewing.

For example, if you are visiting a Web page featuring digital camera reviews, the ads displayed on that particular Web page are related to digital cameras. Contextual ads have been both popular and profitable for the web site owners that display them. However, some advertisers are disgruntled with the programs, claiming that contextual ads are less effective than those displayed with search engine results.

Benefits of Contextual Ads

Susan Wojcicki, one of the creators of the AdSense program at Google, spoke about the benefits of displaying targeted ads.

“Selling inventory, especially very specific inventory, is hard for a lot of publishers,” she said. “Given that Google has over 100,000 advertisers, we have the ability to find and match the right ad with the right page. So, one of the opportunities we saw was that there area lot of pages out there that are serving untargeted ads.”

The idea with contextual ads, she said, is that as the user is looking at that page, the ads showing them are going to be very targeted. From the advertiser’s standpoint, the ads are very relevant to what the user is looking for.

“A lot of publishers have been good at selling in the top level pages and categories, but what they haven’t been able to do is sell deeper into the very specific parts or pages of a site,” continued Wojcicki. “Especially small sites, they haven’t had the sales force to get the very specific advertisers that you need to match the content on each particular area of your site (especially deep pages). When there is unsold ad inventory, AdSense can fill the right ad on the right page at the right time.”

“We think there are two components that make up quality leads,” stated Paul Volen, Vice President of Partner Development & Strategy at Overture. “One is quality placements, and the other is relevant listings.”

“On the placement side… you need two things: quality partners, and quality implementations on those partner sites,” he further explained. “We’ve customized the implementation for the partner, talked and worked with their product managers, and brought our own editorial staff to bear on this issue. The editors on our side will talk to their program managers to best understand where are the most appropriate listings for which pages.”

Contextual Advertising Programs

Overture’s contextual ad program is called Content Match. These ads currently appear on MSN Search,, MyFamily Network, and

“We consider placement to be one of the key factors in drawing quality leads to advertisers,” said Volen. “That’s not to say that we’re not going to display our listings in banners. When it’s appropriate we will display our listings in creatives, but we have to go beyond placement and make sure our ads are relevant to the page content.”

Overture takes a hybrid approach to solving the relevancy issue, using both an algorithmic engine and human editors.

For example, with dynamic news stories, content is continually being generated that cannot be hand-mapped. In this instance, Overture uses an algorithmic search engine. The engine reviews the content and concepts for that page and returns the appropriate ads for that page.

Other content involves human editors.

“In the case of a special section, like MSN Family, we have our editors look at the page, understand the page, and determine the relevancy with our ads to maximize yields,” Volen explained. “By hand-selecting those, we can address some issues that a search engine just can’t deal with as effectively at this time.”

“We know that for Content Match to be successful, it has to work for our advertisers. To that end, we’re carefully monitoring advertiser feedback and conversion rates along with integrating daily click caps and other mechanisms to ensure advertiser satisfaction now, and into the future,” concluded Volen.

Google’s AdSense program was officially launched in March 2003. All ads are reviewed to ensure they meet certain performance specifications. There are a number of different variables that Google looks at.

“We can serve targeted ads on any page on the Web and we have a number of ways to do it,” said Wojcicki.” Basically, we’re using something similar to what we do with search. We are given a keyword, and we try to figure out what is the right page. We use the link structure of the Web as one example to determine what the page is actually about. We look at the keywords on that page and on other pages, how frequently they appear. We try to mimic what a person would see if they looked at the page. What’s in the title could be different from the bottom of the page, so the title would have more important. We also look at anchor text.”

The program can make distinctions with words and their meanings (e.g. “mouse” – animal or computer pointing device; “java” – computer language or coffee) “That is something that has been hard in the past for other ad servers to determine,” said Wojcicki.

The goal of the online version was to offer a very fast way for publishers to sign up. The turnaround time is usually less than 24 hours for an ad to be approved and up and running. “Our goal is to make this as easy as possible to try out with only a small investment in time,” said Wojcicki.

Marketer Issues With Contextual Ads

“It’s important for advertisers to understand the difference between the search and contextual advertising models,” said Brad Byrd, Director of Business Development at NewGate Internet. “Their implementation is different, and I think it’s reasonable to expect different results. Our research shows that it’s a mistake to bundle and manage the two models together. Doing so could lead to a lot of wasted advertising dollars.”

In his presentation, Byrd stated that the results he saw from contextual ad campaigns looked less like search marketing, and more like banners. “Results are going to vary on a client-by-client basis, of course, but they underscore one simple fact: the models are different, and should be treated as such,” he said.

Byrd compared a familiar search ads product (Google AdWords) with a new contextual ads product (Google AdSense). He ran tests for two clients with completely different business models and distinct metrics for measuring success. “Our campaigns used the same keywords, same creative, and identical pricing models for each product. The only variable was the distribution channel — AdWords versus AdSense,” he said.

The results? “The click-through and conversion rates we saw (i.e. percentage of buyers or registrations) from our contextual ad research were significantly lower than those from our search campaigns for the same client,” he said.

“The biggest mistake people are making right now is designing, pricing, and managing contextual ad campaigns as if they were search campaigns,” Byrd explained. “In many instances, advertisers may find that they are actually paying more per-visitor for contextual visitors than they do for their search campaigns — particularly in Google. This makes understanding the value of each visitor extremely important.”

Joshua Stylman, Managing Partner at Reprise Media, also felt that contextual ad programs are more like traditional advertising than typical search engine marketing. “Unlike search, contextual listings is advertising in a more traditional sense,” he explained. “It brings very specific value to the end-user by subsidizing the costs of content.”

“As with any form of advertising, direct, broadcast or interactive, the old maxims hold true… any campaign can be managed to success, given the right price,” he continued.

“Contextual ads challenge advertisers to lure unsuspecting customers away from their daily routine, which typically translates to lower click-through rates,” added Stylman. “They represent a very different opportunity from keyword ads. They’ll require their own unique ad-copy, tracking and optimization efforts, pricing, and finally, activity on only the most qualified syndication partners. Through this confluence of variables, Reprise Media has found that contextual advertising can sometimes be just as successful as keyword advertising.”

Since contextual advertising is a relatively new form of search engine advertising, search engines are adding new tools to help advertisers better manage their campaigns.

For example, web site owners might not want to display their competitor’s ads. After all, what is the point of bringing visitors to your site if you are going to encourage them to visit your competitor’s site? Likewise, will marketers have the ability to block ads on sites that may be inappropriate to monetize? How do Google and the other search engines address this issue?

“On the competitive question, we give publishers the ability to block certain advertisers if they choose not to show them on their site,” said Wojcicki. “Of course, the more advertisers you block, then the fewer ads we can actually show. It is easy for publishers to make those changes, though.”

Overture’s Volen added, “If an ad is caught by our human editorial staff that was displayed by our search algorithm that is deemed inappropriate, we will alert our programming team to make necessary adjustments to their algorithm and determine why it wasn’t caught.”

Both Google and Overture use filter lists to block inappropriate ads — for example, displaying an ad for an airline on a news story about an airplane crash.

“We have pre-determined a whole set of pages that are not appropriate, and we mark those as different types of pages we don’t want to search ads on,” said Wojcicki. “But because publishers will want to serve something, we will usually default to serving a charity ad on those pages.”

“We also map that against filter lists (e.g., sensitive terms such as ‘war’) to make sure we’re not going to be displaying inappropriate ads,” added Volen. “In that case we’ll typically show a house ad.”

Regardless of how Google and Overture address their existing shortcomings, people will participate in their programs because of their strong brand names, said Stylman. Savvier marketers, however, will be looking for both products to offer these points of differentiation before fully participating in them. “Google and Overture are smart though and know how to suit their customer’s needs – it is not a matter of if they improve their contextual advertising products with tools better suited to meet marketer’s needs, but ultimately when,” Stylman concluded.

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Overture Contextual Ads Information

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Google AdSense Main Page

Google AdSense FAQ

Shari Thurow is the Marketing Director at Grantastic Designs, Inc. and the author of the book Search Engine Visibility. She has been designing and promoting web sites since 1995 for businesses in a wide range of fields.

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