Google AdSense Enables Site Targeting, CPM Pricing, and Animated .GIFs

ClickZ breaks the story that Google AdSense is now offering advertisers the ability to target at the site level; this ability will be coupled with an auction-based CPM pricing model and animated .GIF placement. Writes ClickZ editor Pamela Parker:

“Using the same AdWords interface, advertisers will be able to select sites on which they want their ads to appear. They can either enter in the URLs of specific sites, or they can perform a keyword search to find sites on which to place their ads. Google will return a list of sites similar to the URLs people select, or a list that matches with the particular keywords. Advertisers can then select sites from those lists.

Google will continue to use an auction model to sell the site-targeted ads, but payments will be on a CPM basis. Advertisers will indicate the maximum price they’re willing to pay per-thousand ad impressions. Google will then determine where those ads should appear among the CPC ads. Though CPC ads are ranked by both bid price and click-through rate, the CPM ads will only be ranked by bid price.

…There’s one other differentiator for the site-targeted ads. Advertisers will be able to deploy animated .gifs for these placements.”

While certainly a boon to brand advertisers, as described in this ClickZ piece, this is a slap in the face to major publishers (though Tail players like myself have reason to celebrate). To understand why, you need to think about how AdSense is used by most major pub houses, including Newspapers…

Traditionally, Contextual Advertising is used either a) as backfill for CPM based ad slots [rather than selling leftover inventory to a remnant player like], or, b) as an incremental revenue generator at the page footer.

By allowing advertisers to target specific sites, Google has moved into the role of a rep firm. Contextual Advertising will now compete against a major publisher’s internal sales force, as advertisers will have the ability to buy Contextual placement via Google instead of directly from the publisher.

Major publishers should immediately insist that they be given the ability to restrict bidding on portions of their sites (rather than completely opt-out), and, more importantly, set a CPM floor for targeted ad placements.

As I’ve said many times, media co’s have the choice of “playing their game” or “being players in the game”. The consequences of the former (through aggressive acts by Google like this one) are becoming clearer and clearer. It’ll be interesting to see how the big guys responsed.

Update: It took less than a day for chicken-little to scream “beware of impression fraud”. Guess we’ll be solving for that now too…

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