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Anatomy of an Ad Network

Interesting pickup on threadwatch and elsewhere on the recent changes to the Google Adsense Terms of Service.

Specifically, Google has revised its policy, which used to create page level exclusivity for Google ads vis-a-vis other contextually targeted networks, now reads as follows:

Competitive Ads and Services. In order to prevent user confusion, we do not permit Google ads or search boxes to be published on websites that also contain other ads or services formatted to use the same layout and colors as the Google ads or search boxes on that site. Although you may sell ads directly on your site, it is your responsibility to ensure these ads cannot be confused with Google ads.

At Topix, we rely heavily on Google Adsense for our revenue. It's the most effective network out there. We've tested against all of the competition and no one seems to come close performance wise. Why is this? Well, on a basic level, any contextual ad network really can be broken down into three components: (i) the advertiser base; (ii) the targeting technology; and (iii) the presentation.

For our tests (our current Google deployment included) we actually use our own technology to target the ads that appear on the pages. So in our world, element (ii) is a constant. That means Google is outperforming its competition on our pages through elements (i) and (iii) alone. Pretty impressive.

I'm always curious as to how much of the heightened Google performance is attributable to the advertiser base and how much is to the layout. I have a theory that just having the "ads by Gooooogle" lifts performance. Google is such a trusted brand on the net that a user is more apt to click on a link with their trusted seal of approval on it than they would clicking on something merely labeled "Sponsored Links."

In any event, with these revised terms of service it will be interesting to see how enforced and/ or enforceable they are. With text links becoming a larger and larger force in online advertising, and only a limited number of IAB standard ad sizes, as well as a finite universe of colors and font choices, it appears Google is acknowledging something we've known for a while: presentation matters. Now we'll see if they can protect it.

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This page contains a single entry from the blog posted on January 21, 2007 10:49 AM.

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