4/26/2005

Level Playing Field

Google’s plan to offer advertising based on impressions, in addition to clicks, gives a potential boost to small publishers that have developed a strong editorial focus. It gives them access to the same sort of advertising support currently enjoyed by newspapers and other media that get paid to deliver audiences -- not keywords.

Online Media Daily’s version of the story focused on Google’s reasons for the changes (the search engine will also accept flashier ads). I’ll look at this from the publisher’s view.

Getting paid for impressions means publishers can expect to collect a fee for every thousand visits to their site. This might be $2 to $20 per thousand, often referred to as $2 to $20 CPM (rough estimates). Publishers who get paid for clicks only collect a fee when a visitor clicks on an advertisement and follows the link to the advertiser’s destination. Pay-per-click rates range from a few cents to many dollars per click, depending on what is being advertised. Last time I looked in fall 2004 (for a business plan that I have since buried) the average pay-per-click rate was about 40 cents. And the click-through rate ranged from 0.5 percent to 2.5 percent (how many visitors per hundred clicked, thus triggering payment).

Much has been written about click fraud, “the practice of skewing pay-per-click advertising data by generating illegitimate hits,” as Wired News put it in one article. Again, that is a problem for Google and its advertisers. I have other concerns.

Click-through models force Web publishers to meet a higher standard of advertising performance than competing media. A radio station gets paid based on the size of its audience, and draws advertising based on the nature of that audience, which is linked to its programming. Ditto for newspapers and television. In the click-through world, Web sites must send audience members jumping through hoops to get paid.

If Google’s move toward impression advertising sticks, it will reward Web publishers for becoming brands that deliver content that draws a predictable following. CNet’s report on Google’s move quoted Kevin Lee, president of the search engine marketing firm Did-It: "Clearly, this is an attempt to get at brand advertisers." (CNet also offers a synopsis of how Google’s program, Site Targeting, will work.)

Large branded media sites are in the best position to capitalize on Site Targeting. But small publishers may be able to get a bigger share of the ad dollars being spent. Say you have a wine lovers site, and you notice that a big wine label is placing impression ads through Google on Big Media Sites. Do a little guerilla selling. Figure out who at the wine label makes or influences the advertising decision and get your content before them. It can all be done with e-mails. All the advertiser would have to do is divert a little bit of money your way to make a big difference.

Finally, I wonder if impression ads and click through models can be combined. After complaining that click through payments are unfair, it may seem hypocritical to observe that online advertising can be different than print or broadcast. People can interact (they don’t do so often, but they can). Is it possible that Web publishers can offer a hybrid ad model: a low base rate for the impressions that fuel the basic content engine (and give the advertiser visibility), and a second payment for that fraction of visitors who follow the link that says “click here for special savings today.”

Tom Abate MiniMediaGuy Cause if you ain’t Mass Media, you’re Mini Media

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