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Tuesday, April 26th, 2005

Google Re-Writing Paid Placement Playbook

 

Google is introducing site-targeting for paid-advertisers in a bid to perfect their golden-egg ad-distribution network AdWords. Yesterday Google announced a limited beta test of a unique feature to AdWords, a system allowing advertisers to choose where their ads are displayed by selecting the sites or pages they will appear on. Billing will be done on a cost per thousand (CPM) impressions basis.

AdWords will continue offering its traditional keyword-targeting paid advertising, charged on a cost per click basis with the new site-targeted ads only open to advertisers who want to promote their products though Google’s AdSense content partnerships.

Larger media buyers and traditional advertising agencies have long lobbied Google for a system based on cost per impression vs. cost per click, reasoning it is simpler to purchase bulk accounts and track CPM billing.

When the site-targeting feature becomes available to all advertisers, AdWords users will see an interface similar to the one they currently use. One difference will be the addition of a text-box in which specific URLs can be entered beside another text-box in which trigger-keywords are added. If users select site-targeted ads, another new bidding text-box will appear asking them to determine how much they would spend every time their ad appears 1000 times on their selected sites.

Site-targeted ads will compete with the traditional keyword-driven ads in such a way that searchers shouldn’t be able to tell the difference between the two. When deciding how to rank multiple paid ads generated by both AdWords systems, Google will evaluate the highest CPM bids of all site-targeted ads and compare them against the traditional cost-per-click + click-through rate ranking process it uses to rank keyword-targeted paid ads.

As a billing model, CPM is not necessarily replacing the amazingly successful cost-per-click format which helped Google increase revenues by a factor of six over last year. Like the rest of the search marketing industry, Google is waiting to see how their rivals react. By meeting the needs of their largest clients however, Google expects a highly favorable reaction from corporate advertisers and larger ad-space buyers.


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