New Online Advertising Features

In the early days, online ads were bought by the impression or view (CPM). But willingness to pay per impression for online ads, especially untargeted impressions, was short lived. That's because ads have a lot of work to do if they are going to preempt the inertia of activity in order to arrest attention and gain an opportunity to sell. The scale of difficulty in gaining attention slides from hard to hardest based on the amount of inertia to overcome. TV commercials (assuming they're being seen) have a bit less inertia to deal with than a magazine ad. That's because people are fairly passive while waiting for a television program to resume. Magazine ads have a little more work compared to television because when people are reading a magazine article they are more actively engaged in the activity. Online ads are at the far end of the difficulty scale. People are highly engaged when pursuing an online activity. Halting this inertia is very difficult. So paying per impression, when a mere impression has so little impact, is onerous.

Pay per click makes buying online ads a bit more acceptable. But clicks aren't much more valuable than impressions if the visit doesn't result in an intended action. Ultimately, advertising is for selling. There is always a desired action when an ad is placed: a sale, generating a lead, web sign ups. Wouldn't it be awesome if we only had to pay for ads when these results occurred?

Pay Per Action is the newest feature (still in beta and by invitation only) of the Google AdWords program. The advertiser determines the action desired - either a sale, a sign up, or some minimum number of pages viewed - and the advertiser determines how much the action is worth to them. Web pages that are part of the desired result are embedded with triggers and only when sessions initiated by ad clicks include these pages, is the fee charged for the ad. Nice!

Google is running fast and furious while Yahoo! is lagging behind in the search advertising market. But they recently announced an improved advertising system called Panama. They have caught up with many of the features of Google's AdWords. I particularly like their keyword discovery system. It's not as flexible as Google's but it does help to identify the most productive phrases and how much it will cost to target each of these phrases. Another difference between Google and Yahoo! is their payment models. Google charges a credit card after delivering a certain quantity of clicks. Yahoo! requires an upfront deposit that it bills against until it's used up, and then charges the deposit fee again. Not a big deal, but Yahoo! does raise the bar for "trying out" their new service more than Google's billing process does.

Both Google and Yahoo! are offering a new feature that enables the creation of multiple versions of each online ad. They circulate these versions and track their relative performance to determine the best performing ads. Of course best clickthrough performance from the search engine is not necessarily the bottom line. For example, one ad version might show a higher clickthrough percentage than another, but if the visits from that version abandon the site more quickly than a lower clickthrough versions, the better performing ad may be preferred. That's why we built the NewfangeldCMS advanced website tracking tools so we can see what happens after the click--but that's another newsletter.