Is Contextual Advertising Dead?

Is Contextual Advertising Dead?


Advertising is all the rage these days on blogs and I have tried many different programs, as have others. Some of these programs have done well on some sites and not on others. Others don’t work well at all. Plus, there’s a lot of debate swirling around advertising and what best practices are.

For the sake of getting up to speed, there are two primary types of website advertising: paid placement and contextual.

Paid placement advertising comes in a variety of forms and does not always mean you get paid to place the ad. Some advertising, such as Text Link Ads (aff) or BlogAds pay when advertisers buy adspace on your site while others like Pheedo pay per impression (times the ad is viewed in a browser).

The other major type of advertising is contextual advertising, where ads are automaticaly served based on the context of the page that the ad is on. Google Adsense and Yahoo’s Publisher Network (YPN). These ads are pay-per-click (you get paid when someone clicks).

Contextual advertising has been very popular since Adsense was launched back in 2003 (I think).

Recently, though, I wonder if the contextual advertising paradigm is dying. More and more publishers (website owners) are successfully selling paid placement ads (sponsorships and gaining memberships to the paid placement agencies) and making a whole lot more money than contextual advertising is providing.

Case in point, a few months ago, I started to hear a low murmur in the publisher community as Adsense revenues began to drop. There was a lot of speculation over why ads weren’t converting as well (converting being successfully attracting clicks and paying decent money for those clicks). Where once, clicks were valuing at 50 cents or more on this site, they have dropped to 5 cents which ultimately caused me to drop Adsense from this blog. It was no longer worth it to me to inflict advertising on readers when conversion rates were pitiful on better content. I’ve seen this trend on other sites I own too, some much more narrowly focused and more attractive to the high-paying (niche) advertisers.

YPN has done even more poorly. After a month of serving YPN on this site, Yahoo still served ads about mortgage refinancing and off shore prescription medicine. Hardly the context of this site and thus the problem was with getting clicks, not necessarily the pay rate for those clicks. (For what it’s worth, my experiemnt with YPN gained higher dollar-per-click rates but fewer of them).

Then I played with Clicksor, a relatively new ad company that acepted Technosailor into its program. Clicksor had some clever widgets (inline contextual advertising in the form of smart tags), but they too never hit the mark in terms of gaining clicks or having a decent payout.

Darren posted about eBay’s new contextual system this morning and the general consensus I’m hearing is it probably won’t work. I don’t know how well they will convert, but the initial numbers make it look like a fairly worthless program in terms of value.

I wonder if, given the fact that more bloggers can make really good money and get really good advertising without a lot of effort, combined with the low quality results of contextual advertising that at least I’m seeing, contextual ads are a dying breed?

 

comscore measured adsense effectiveness. in january, people clicked on 7% fewer ads then they did in december. i attribute this to the holiday shopping season. google's earnings from adsense was flat comparing january 2007 to 2008. but this is skewed as well. google made the change to clickable areas of adsense. google also has been banning lots of publishers, in an obvious attempt to keep quality high. as far as adsense goes, i don't think contextual advertising is dead. but it does need a new approach.

i think better layout options (backgrounds, font type/size, etc.) would improve results. Better targeting would help as well. And with better targeting, new contextual ads could be targeted for single keywords instead of ad unit blocks. imagine writing a paragraph and placing a single adsense/ypn word in it.

ypn is worse because of horrible targeting. and the revenue publishers receive does not compare to google. but it's a great choice if one can't use adsense.

anytime ads run for extended periods of time, people start to just overlook them. giving publishers more control might improve the ctr. just my opinion. but with an economy going down the tubes, i think more people will avoid clicking anything that reminds them of their diminished purchasing power.

 

I dont' think contextual ads will die. the low percentage of click is just an indication that more people are having a bad experience after looking at those ads. in the beginning this thing are new so people would click to see what is all about. but when those ads are getting worse and worse people sicken tired of it. so the quality of ads have to be improved first to see the increase in CTR.

 

it will always be popular.. and effective, but if your not gtting good results you can always try alternatives like affiliates.

 

You can do well with ads if the content and ads match. Google is the best at matching ads to content. Try using several different companies.

 

Contextual advertising will not die because it's one of the most effective forms of online advertising.