The contextual paid listings market gets a new player today with the launch of ContextWeb's contextual advertising platform.
ContextWeb boasts that its ContextAd solution provides more relevant listings through a methodology that combines aspects of keyword-matching technology and categorization in real time. Advertisers bid on buckets of keywords within categories.
ContextAd competes with Google and smaller players like Kanoodle, Quigo and IndustryBrains in the evolving market for targeted performance-based advertising that many publishers are using instead of low-priced run-of-site ads.
The New York-based startup secured $3 million in first-round venture financing led by Draper Fisher Jurvetson Gotham Ventures.
Anand Subramanian, CEO of ContextWeb, notes that paid search is on pace to produce $2.6 billion in sales this year, despite search engines representing just 3 percent of the Internet's Web pages.
“It only makes sense to believe the remaining 97 percent is a much bigger opportunity,” he said.
Google hopes to expand its reach as the Mountain View, CA, search giant has aggressively promoted its AdSense contextual ad program that has become nearly ubiquitous on the Internet in just 18 months.
Despite its success, Subramanian claimed AdSense serves too many untargeted ads through its pure reliance on keyword-matching technology. This approach could lead to a story about prison abuses at Abu Ghraib in Iraq producing ad links from handcuff sellers, he said. (Many AdSense publisher sites have filters to display public service ads on Web pages with sensitive content.)
ContextAd is an expansion for 12-employee ContextWeb, which has licensed its technology since it was founded four years ago. Search providers FindWhat.com and Ah-ha.com are customers.
“Any good media business requires technology to succeed,” Subramanian said. “If you're just a pure technology play, chances are you'll get marginalized.”
ContextWeb is displaying ContextAd listings through ad networks FastClick and MaxWorldwide.
Contextual listings, though still a small market, are expected to expand greatly. U.S. Bancorp Piper Jaffray last November forecast the contextual listings market would expand from $300 million in 2004 to $1.4 billion in 2008.
