Sponsored Links Extend Their Reach

By Matthew Hicks  |  Posted 2005-01-26

Sponsored Links Extend Their Reach

Sponsored links may be a mainstay alongside search results and on Web pages, but the advertising format is increasingly appearing in new places and taking on new forms.

Faced with advertisers who want to place more ads and publishers who seek more revenue, sponsored-link providers such as Google Inc. and Kanoodle.com Inc. are trying out approaches ranging from putting sponsored links in e-mail newsletters and syndication feeds to letting users choose the ads they read.

Sponsored links have been credited with helping to revive online advertising. They work in an auction model where advertisers bid on the keywords or topics that will trigger their ads. Advertisers then pay a per-click rate based on the number of clicks on a listing.

Just this week, Google confirmed that it is testing a refinement feature for its AdSense contextual ad program for publishers. The feature, appearing below the sponsored links on an unknown number of publishers sites, allows a user to change the AdSense results by clicking on a series of similar keywords or by entering a search term.

A Google spokesman declined to provide details about the test.

"Were always looking for new ways to give publishers new features, and this is a test and is a result of those efforts," the spokesman said.

Googles latest tweak, though, follows a broader shift in sponsored links. Publishers are incorporating the ads into more of their online content.

Read more here about Googles plans to give advertisers more access to its ad system.

About a year ago, Google quietly began placing AdSense ads into the e-mail newsletters of publishers with which it has direct relationships. Meanwhile, competitor Kanoodle, a New York-based startup, plans to widen its publisher options this year by letting them choose among various types of sponsored links that are targeted to a pages content, user behavior or local information.

Google began offering AdSense for e-newsletters because of demand from publishers, said Brian Axe, a Google product manager. The ads work similarly to the contextual ads that Google offers for content-heavy Web sites.

They can be added to HTML-based newsletters. When a reader opens the e-mail, AdSense returns sponsored links based on the context of the content in the newsletter, Axe said.

"Its essentially a no-brainer to add this to existing newsletters, and they get incremental revenue without having to do anything," Axe said.

Google plans to eventually expand the newsletter option beyond its direct AdSense partners to include the smaller publishers who use AdSenses online self-service program.

"Its a goal, but we havent put any dates around it," Axe said.

Next Page: A broader approach from Kanoodle.

Kanoodles Approach

At iVillage Inc., a site targeted to women, AdSense has helped generate new revenue for its e-mail newsletters, said Carl Fischer, the companys vice president of corporate communications The New York-based company produces newsletters on topics ranging from health and fitness to relationships and parenting.

Fischer said the AdSense newsletter ads complement the types of ads that iVillage sells directly to advertisers and perform as well as, if not better than, the sponsored listings on Web pages.

"It sort of was just a natural next step for us," Fischer said. "The newsletters are very targeted in terms of the audience [so] it made sense for us to want to pursue this avenue."

What about bloggers? Click here to read about Google extending AdSense to blogs.

Kanoodle is taking a broader approach with its sponsored listings as it attempts to differentiate itself from Google and Yahoo Inc.s Overture Service, the dominant sponsored-links players.

Viewing itself as a media company, Kanoodle last year began expanding beyond its ContextTarget program, which displays ads based on a Web pages content.

Beyond that program, it has added one called BehaviorTarget, which uses behavioral tracking to determine which listings to display. So, visitors to a news site may see financial services ads because they have repeatedly visited banking sites. Kanoodle also offers LocalTarget for placing local ads on pages with local content.

"What were hearing from our publishers is that content does not mean context," said Mark Josephson, senior vice president of marketing and business development at Kanoodle. "To use only one method, context, is not enough."

Kanoodle already has begun selling ads for BehaviorTarget and LocalTarget, and later this quarter it will allow its BrightAds self-service publishers to specifically choose among the various ad types, said Kanoodle CEO Lance Podell.

On the RSS (Really Simple Syndication) advertising front, Kanoodle also has reached deals with about a dozen publishers to include ContextTarget ads in RSS news feeds. It expects to extend RSS ads as an option to self-service publishers later this year.

Click here to read more about Overtures RSS ad plans.

Further out in the year, Kanoodle wants to automate the selection of sponsored-link types for publishers, essentially using algorithms to determine the best mix of ads for a publishers various pages and mediums, Podell said.

Another emerging market for Kanoodle is that of blogs. The company struck a deal to offer its sponsored-links programs later this quarter to bloggers using Six Apart Ltd.s TypePad publishing service.

"We dont prepackage everyone and say that all blogs and all Web pages are created equal," Podell said.

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