Google is going to start letting advertisers place ads on specific web sites within their network. It’s not out yet, but it will be soon, and the implications are broad: Content will become that much more important; sites that offer a lot of clicks but poor conversion may find that their AdSense revenue drops; and Google is starting to offer a mixed pay-per-click, pay-per-impression model.
The new service, called Site-Targeted ads will work on a pay-per-impression basis (called max CPM, for you industry folks) – you’ll pay for every thousand impressions.
Pricing will be based on the Adwords ranking system – an ad will be priced based on cost per click in keyword advertising, clickthrough rate and ‘other relevance factors’ (think content quality). You’ll bid to have your ad displayed on specific sites. The winner will show up in an ad that occupies the entire ad space – unlike Adwords PPC ads, which are grouped, a successful CPM bidder will probably get an exclusive.
Note that site-targeted ads will only show up on the Google Content network – they won’t show up in the Adwords column on Google itself. Google’s content network has always been pretty spotty, in my opinion, so I don’t see this as much of a loss.
No definite word as to when they’ll launch this service, but I think site targeting will be a Good Thing, in the long run. Here are my thoughts:
Site-targeted ads will make content more important. Getting folks to your web site is only part of the battle. Getting people to stay there and take a specific action is harder. CPM campaigns tend to be more expensive than PPC campaigns. So, if you’re paying for a CPM campaign, you’ll bloody well want to know that you’re getting a high conversion rate when someone lands on your site.
Site-targeted ads will force out the spammers. There are a lot of sites out there that try to generate income through Adsense advertising – that’s Google’s content network – and most of them are pretty unscrupulous about how they do it: Click fraud, lousy content and unethical SEO tactics are the norm, as these folks do anything they can to grab more traffic and generate more clicks, regardless of the goal outcome. Site-targeted ads will be site-specific and easily measured for conversion rates. If you place an ad on two sites, track conversion rates, and find that one site converts 5% of the time and the other converts 1% of the time, what will you do? Pull the ad. So people who build bad sites just to send you low-quality traffic will get weeded out.
Google is switching to a mixed CPM and PPC model. The only potential down side, here, is that this is a major shift for Google. They are going to have to convince their advertisers they can bring the same level of accountability to impression-based marketing as they did to PPC advertising. Whether they can do that remains to be seen.
Overall, though, I’m pretty excited. Site-targeted ads should offer a great supplement to standard Adwords, and let businesses move into banner and enhanced text advertising without sacrificing conversion rates.