Digital Thoughts – Search Engine Market
This week’s Trends Report examines the search engine market through the weaving together of search related topics in the news. Here, we look at search and its similarities, differences, and impacts on the affiliate and ad network space. The latter can intertwine with search but as a whole are very different markets. Among the more obvious differences between search and other forms of online advertising is the type of ads. Search runs text ads with very specific limits. Affiliate networks and display ad networks might offer some text ads, but as a whole they offer advertisers a much richer array of choices – there is no single text ad with strict formatting guidelines. Another more obvious difference between the two segments is where they run. With the exception of Google Adwords, search ads run on search inventory. A third obvious difference between the two types of advertising is targeting. By and large, search runs exclusively on keyword targeting whereas affiliate networks and display ad networks do not.
When thinking about the differences between search advertising and other forms, it is that last point where one starts to tease out some of the core differences between running a campaign on search and running it on an affiliate network or display ad network. If you are an advertiser that is looking for volume, you can get it both on search and through other forms. Among the biggest differentiators though, regarding running campaigns on search and on other media types, deals with the real time nature of campaign changes. One of search’s most engaging characteristics is the level of control over the campaigns and how those controls impact campaign performance in real-time.
Display ad networks and affiliate networks also offer advertisers the ability to set pricing. What they don’t offer is the stock market simulation found with search. In search, were an advertiser to choose to set a price and keep it at that price they could. Conversely, were they to want to change the price at any moment in time they could. That, too, is not very dissimilar from non-search, or other online media.
What is so different is who makes the changes, how quickly they are implemented, and the expectations arising from the change. Regarding who makes the change, in search, the advertiser makes the change. With a majority of affiliate programs and ad networks, an employee must make the change. When it comes to how quickly the changes become implemented, with search the time to refresh is almost seconds. That is definitely not the case with affiliate and ad network advertising. Lastly, when it comes to the expectations arising from the change, with search the advertiser expects to see an almost immediate increase or decrease in traffic. Not only that, but the increase and decrease often is almost predictable. In non-search, changes in prices do not bring about any bankable guarantees. The volume and pricing are much less transparent and the ability to predict the level of traffic much less sure and consistent.
However, more and more non-search companies are aligning their advertiser functions with that of search advertising. Metrics Direct, a 180 Solutions Company that provides contextual marketing via their desktop application user base, offers keyword bidding and a self-serve interface. Theirs is not as robust and dynamic as that of the search engines, relying more on reactions to reports, but they very much mimic the key qualities of search advertising – targeting, pricing transparency, and volume expectations. Finding all three is not easy in non-search companies, and in fact might be one reason why Metrics Direct bills itself as a search company. They do appear to be the first Cost Per View program that offers that nature of advertiser interaction.
Other companies that blur the lines between search and media are Quigo and Vibrant Media. The former offers keyword based, content targeted advertising in the form of text ads similar to Google AdWords; the latter offers contextual advertising that is also keyword based but offers both graphical ads and hyperlinked editorial content. Both exist to marry the benefits of search advertising with display ad inventory. Quigo charges CPC while Vibrant offers both CPC and CPM options depending on the product. In between these two sit less technology focused companies that offer targeting, some levels of transparency, but not the traffic experience. They work primarily on a sponsorship model such as BlogAds. A third blend also offers sponsorship on sites, where advertisers by for fixed amounts of time rather than specific impression / click levels. These offer some security and transparency but their fixed nature does not work as well for those looking to control performance. An example here would be the recently funded AdBrite who, like Quigo, focuses on text ads.
Will the networks and affiliate marketplaces benefit from increased levels of advertiser control? Do they need to mimic search in their targeting, transparency, and volume control? It’s hard to say. What the non-Quigo, non-BlogAds do offer, which none of the others mentioned, is risk absorption / risk transference. The above companies offer targeting and tight controls because the advertiser assumes the risk. There is no high volume option with a guaranteed CPA, but that is exactly the value proposition and upside with some of the display ad and affiliate advertising networks. For now, that is enough to keep many advertisers happy. It’s hard to think though that the shift towards more automation and advertiser control won’t seep into the truly performance-based world. I can say this – the one who figures it out first should anticipate more business than they would have imagined.
