Kanoodle said it would begin to use click-through rates to help rank its contextual listings, as opposed to determining position based only on bid price.
Called ClickFactor, the ranking tool takes into account both the amount an advertiser bid for the listing and its click-through rate to determine the most relevant listing. A listing's ClickFactor is a score of 1 to 100 of how that listing performs relative to listings in the same category.
The system is similar to the one used by Google to determine the ranking of its search and contextual listings by combining a listing's click-through rate and bid price. Yahoo's Overture Services uses only bid price to determine ranking. Unlike Google, however, Kanoodle provides advice to advertisers to improve their ranking. ClickFactor provides reports about each listing's ranking and what bid price is needed to move it up.
“We really believe that better relevance benefits all parties,” said Lance Podell, Kanoodle's president. “The only way advertisers believe this is if you give them the tools to see how they can improve.”
The market for contextual listings, in which advertisers pay each time a user clicks on their text listings, remains small compared to the booming paid search industry. Investment bank U.S. Bancorp Piper Jaffray estimates contextual advertising will generate $100 million this year, growing to $1.4 billion by 2008.
ContextTarget listings are currently distributed on CBS MarketWatch and Quicken.com. The Motley Fool is in a several-month test of content listings from Kanoodle, IndustryBrains and Overture. Kanoodle plans to release a self-service ContextTarget system next month that will compete with Google's AdSense for distribution by smaller Web publishers.
Unlike AdSense, which uses Google's search technology to target listings based on a Web page's content, ContextTarget matches listings based on a Web site's sections. For example, MarketWatch.com was mapped into the finance category, with eight topic subdivisions that include mutual funds, stocks, and taxes. Kanoodle maintains that its mapping approach yields more relevant ads, since search and contextual listings perform differently.
Brian Morrissey covers search marketing for DM News.com. To keep up with the latest search marketing news subscribe to our free e-mail weekly newsletter Search Engine Marketing by visiting http://www.dmnews.com/cgi-bin/newslettersub.cgi .
