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Google Great at Monetizing Crap

Posted on Wednesday, Jun 27th 2007

I had lunch with the co-founders of an ad network startup on Thursday. I will keep their identities anonymous, but I cannot help quoting one of them, as he put his finger on one of the biggest problems plaguing Google AdSense: It is great at monetizing crap, but offers absolutely no premium for high quality traffic.

I have said before, that I am giving up on AdSense, and suggested how Yahoo could kill AdSense. The problem, however, is that the rest of the eco-system isn’t ready yet, and no one has yet come up with a compelling, scalable, vertically-oriented ad network that does justice to high quality traffic and superior content, by tapping into the brand advertising budgets available from major advertisers.

::

* First Quarter U.S. Internet Display Ad spending hit $2.7 billion–a 16.7% increase over the same period last year, acc. to TNS Media Intelligence.

* Financial services was the leading category, with spending of $488.7 million on Internet advertising for the period–up 51.2% over 2006.

* The top 10 Internet display advertisers are IAC, Verizon, Experian, eTrade, Apollo Group, Netflix, Scottrade, AT&T, FMR Corp. and National Amusements.

* Top 10 segments are Financial Services, Retail, Internet, Misc. Services, Media, Telecom, Computer Products, Travel & Tourism, Education, and Auto.

::

So where is the scalable vertical ad network for Business and Finance? For Travel & Tourism? For Consumer Electronics? For Lifestyle Products? For Auto?

No prizes for guessing which company is the most strongly positioned to pull this one off. Yahoo, the slumbering Yahoo. But ofcourse, as it takes its own sweet time, even old media giants like Time Warner may get their acts together ahead of the sleeping beauty!

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I think in near future the Ads, on Publisher’s site, will become on stop buying instead of clicking on the ad and landing on the advertisers site. Its Just like buying Recharge Currency Card for Mobile in any shop instead.

Also, there is no facilities to include ads that we want on our site/blog because we know our blog readers/target audience better than those providing ads like Adsense or AdCentre.

For eg: Take this blog only, only high profile bloggers, passionate techies and bizz people visit this blog. If sramana is given authentication to include ads on her blog whats she wants, then she knows better about her target audience then those of companies providing ads.

The ads [adsense] currently served on this page for the current topic is completely irrelevant to the context and no one click on the ads and visit the site.

I think behavioral target advertising is the next thing.

Mahesh Wednesday, June 27, 2007 at 11:44 PM PT

Sramana, I agree with your comments. One consistent frustration we hear from smaller publishers who are producing thoughtful, high value content is that they don’t have a way to attract high CPM brand advertising that is contextually relevant to their readers.

Fortunately, this is early days and some great ideas are emerging on how to connect brand advertisers with publishers across the fragmented web to create mutually beneficial and sustainable relationships. At Adify, we think vertical ad networks will play a role in addressing this challenge and we’re doing our best to make it as easy as possible for new vertical networks to be created across many of the categories you suggest. As with most transformative shifts, It will take some time, but rest assured, we’re hard at work.

Keep the good ideas coming!

Russ Thursday, June 28, 2007 at 10:18 PM PT

Sramana,

I miss the opportunity to http://www.gettailgate.com/en/index.html which i mentioned in the above first comment first para: “I think in near future the Ads, on Publisher’s site, will become one stop buying instead of clicking on the ad and landing on the advertisers site.”. That is what gettailgate do. I imagined that 3 months back but failed execution.

Mahesh Thursday, July 12, 2007 at 7:14 AM PT

[…] Google Great at Monetizing Crap […]

Google Loses a Great Executive - Sramana Mitra on Strategy Saturday, November 17, 2007 at 7:56 AM PT

[…] Google also completed their acquisition of DoubleClick which will allow them to offer a more comprehensive solution for advertisers and publishers. Using DoubleClick’s display ad management products and Google’s ad network, they are expecting to be able to help publishers get more revenue while they put forward a richer content. Despite all that, AdSense continues to grow at a marginal growth rate of 3% per quarter. This slow growth is also derivative of the fact that AdSense still does not monetize the social networks it pushes ads to. Like I said before, AdSense is great at monetizing crap. […]

Google Strong, But Microsoft Pays Attention to Verticals - Sramana Mitra on Strategy Friday, April 18, 2008 at 9:56 AM PT

I agree about Google’s problems. It also has a problem with its PPC advertising and click fraud, mentioned in a Wired article http://www.wired.com/wired/archive/14.01/fraud.html here. A company as advanced as Google should have a way to recognize when a significant number of hits through its PPC system are from the same place. There are some systems in place for detection of click fraud, but the fraud becomes more advanced all the time and the companies do not reveal how advanced their fraud-fighting capabilities are. Google Wallet is mentioned in the article as an alternative in development that would prevent against click fraud, however it has still not yet been released. Google Wallet would be a program that would allow customers to find a business through Google much like AdSense and AdWords, but Google would get some of the purchase price. I think a program like this has its own issues for businesses that typically do not take payment over the internet, such as law firms and restaurants. These are businesses that I believe would definitely benefit more from the PPC method, and I think Google should be sure to put strong anti-fraud measures in place to prevent against fraud to keep these customers.

Ilene Silverman Thursday, June 11, 2009 at 10:37 AM PT

Ilene,

There are lots of issues around Google and clickfraud of various kinds. Among other things, they make a lot of errors in geo-targeting.

Sramana

Sramana Mitra Thursday, June 11, 2009 at 10:45 AM PT