Contextual Search Marketing

While Yahoo!, AOL, and others were attempting to make a living selling banner ads against page views, it wasn't going well. That's because banner ads, especially non-contextual ones, have abysmal clickthrough rates. And they are annoying as all get out. Banner ads from those days were garish, to put it mildly. They usually consisted of pulsating, seizure-inducing bright colors, and fake games enticing you to click a target to win a prize. They had to be obtrusive if they were to have any hope of getting clicked. There was a reason why these ads were so horrible. They had to overcome an incredible degree of consumer inertia. I've described the principle of consumer inertia, in a past newsletter. I'll quote myself here to restate the principle:

"Online advertisements have a lot of work to do. As with any form of advertising, before an ad can even begin to accomplish its purpose (persuading you to buy something), it has to get your attention. The amount of work required to gain attention differs between media. For example, movie theater advertisements that run before the previews don't have to work very hard. Assuming you're not running out to grab a package of Jujubes, these ads pretty much have your attention. Television commercials have a bit more work to do since they have to compete with the refrigerator. Otherwise, television advertisements pretty much have a captive audience too. Magazine ads have a bit more work to do. Depending on whether you are seriously engaged in reading the magazine or simply flipping through as you wait for a doctor appointment, your reading activity will have a greater or lesser inertia. The relative scale of how hard it is to stop a consumer's inertia is what makes online advertising so difficult. Unlike most of the other forms of advertising that tend to take advantage of captive attention, online advertising has to stop someone from active internet surfing, which has a lot of inertia. This is because nobody sits and watches their computer passively as websites pass by. Rather, they are online because they are pursuing a specific task or active interest. If someone is online to make travel arrangements, they are not going to easily change gears to respond to a banner ad selling a magazine subscription."

To overcome this inertia, search banner ads had to virtually pluck our eyeballs out to get our attention. And even with such annoying tactics, the clickthrough rates were horrible.


Then came context, and context helped a lot.

When search ads had no correspondence with the context of a search, they had very little success. But when search results for "Hawaiian resorts" included travel ads for hotels in Hawaii, they performed much better. Of course Google was not the first to figure this out. AOL and Yahoo! enabled contextual search long before Google AdWords came along. But Google's superior relevance in search results (not to mention enabling self-service with no minimum spend) created a superior contextual search marketing platform. Thus they were able to capitalize on their core product, great search results, with a valuable addition - contextual ads.


Context definitely changed the game. But is context enough for effective search engine advertising? I don't think so. You can observe the weakness of mere context matching by comparing the performance of Google's AdWords when displayed in their own search results versus when they're display in the AdSense publisher network.

AdSense is Google's advertising program for publishers. A local newspaper, for example, may want to maximize their site traffic without having to sell their own ads. Using AdSense they simply and add a bit of code to their site to display AdWords on their pages. These AdWords are also contextual. If an article is about Hawaii, the AdWords will be contextual to the content and display Hawaii oriented ads.

But the ads that are displayed across the AdSense network still show significantly poorer performance than the same AdWords when they are displayed among search results.

If context were enough, you'd think that ads that displayed on the web page would perform just as well as in the search results. But they don't. Context is critical; it must be there; it's foundational, but it's not enough by itself.

Which brings us to the next, and perhaps more important concept: Intent.   next >