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Three cheers for Google

Ppa-1Google's new "pay-per-action" system — which allows clients to pay only when a user takes some step towards a purchase — is clearly good news for unsophisticated and risk-averse advertisers. They won't have to guess how many clicks are resulting in sales. But what about publishers? Here are three reasons why, surprisingly, Mountain View's new scheme could be beneficial to them.

1. Control. Google Adsense, which picks an ad after an analysis of text on the page, serves up laughably inappropriate ads. Particularly if the language is colorful, or the item is negative, a problem for many Gawker sites. The service has never fulfilled its promise to free small publishers from the tyranny of traditional sales. By letting producers explore ads by keyword, and hand-pick them if necessary, the matches will be much improved. For instance, on Gawker Media's Consumerist site, which publishes highly critical reviews of banks and other services, one could place an ad for HSBC Direct's excellent online savings account against an item on Chase's dismal interest rates.

2. Short text links. Unless the site is highly specific, it is particularly absurd to serve up a block of Google Adsense on the front page. Google tries to match against the whole text of the page, and ends up with lowest-common-denominator ads. Because clients only pay for results, Google can afford to be more relaxed about an ad's format. Short text links, permitted under the new scheme, are discreet enough to be placed at the end of an individual blog post, for instance. Better, both for advertisers and for readers, for a commercial message to be close to the content against which it matches. The concern, that unscrupulous publishers will be able to disguise advertising links, is a real one; but I'm more excited, here, about the possibility of additional revenue for the scrupulous.

3. Remnant inventory. Google isn't clear whether it will allow the pay-per-action units to be served in rotation with other ads. But it looks like it will be more flexible than it is about the display of Adsense. This would make a big difference for publishers. Even sought-after sites have excess inventory. Ad networks such as Tribal Fusion, or affiliate networks such as Commission Junction, provide ways to squeeze revenue from unsold pages: but the ads are often low-end, and priced at an extremely heavy discount. Google can plug into a much wider circle of advertisers, give publishers control over the ads they show and, going by past experience, offer higher revenue per impression than competitors.

9:22 AM on Wed Mar 21 2007
By Nick Denton
2,011 views
3 comments