SAN JOSE, CA — Marketers need to view their contextual listings campaigns differently from search and expect lower click and conversion rates, search marketing executives warned yesterday.
Given the different user behavior and generally lower conversion rates, search engines should separate the two markets completely, the executives said during yesterday's opening panel session at the Search Engine Strategies Conference & Expo here.
“It's unfortunate these products have been positioned as search when, in reality, they're quite different,” said Joshua Stylman, managing partner at search engine marketing firm Reprise Media, New York.
Google and Yahoo's Overture Services began showing paid listings on content Web sites in the past year by scanning Web pages for keywords and matching them with related text ads. Google's AdSense program has grown to reach thousands of sites, including high-traffic ones like NYTimes.com and iVillage, since its launch in April 2003. Overture has taken a slower approach, showing its Content Match listings on Yahoo, MSN and a few other sites.
“It was in response to our customers needing more inventory and more conversions,” said Patrick Keane, head of sales strategy at Google.
With AdSense and Content Match, search engines hope to reach the 95 percent of Internet pages that are not search-related. Strong advertiser demand for search listings has pointed to the need for more outlets. A study released two weeks ago by Nielsen//NetRatings said demand is far outstripping supply of search advertising inventory. Jupiter Research forecast last week that this pressure would lead to rising prices for scarce search inventory.
Stylman and other search marketers on the panel said content listings would only grow more important in the coming years. Google could greatly expand the reach of AdSense listings, for example, when it officially releases its Gmail e-mail service, which displays paid listings next to incoming e-mail messages.
For now, however, content listings remain a small part of most search campaigns because their conversion rates trail search, while the pricing remains high, said Andrew Goodman, principal of Page Zero Media, a Toronto search marketing firm.
“If only you could bid less, this would perform,” he said.
Brad Byrd, director of business development at NewGate, Sausalito, CA, a search marketing firm, urged Google and Overture to separate their content and search listings. Overture has gone further to address this complaint by switching to separate auctions for its Content Match and Precision Match listings in January.
“It's different, and you should be able to control it differently,” said Paul Volen, vice president of partner development and strategy at Overture.
Google does not offer separate bidding, instead adjusting click prices for some keyword ads based on its own algorithm determining an appropriate price. It has deferred separate auctions in order to avoid unneeded complexity, Keane said.
Byrd said his clients have seen prices for AdSense content listings fall into line with search listings. Still, lower conversion rates made most AdSense campaigns carry a much higher cost per action.
Google has resisted offering separate bidding. Keane said products like Smart Pricing and conversion tracking tools would let advertisers decide whether to opt out of content listings.
Stylman said delineating between content and search listings also would let marketers tailor creative for the different environment of content Web pages, where users are not actively searching.
“What we're asking for is a completely partitioned marketplace,” he said.