Advertising on search engines is becoming more targeted. News.com has more, following the purchase of Sprinks by Google:
[Google] operates a commercial search service called AdWords, which auctions sponsored link placements on search results pages and competes with Overture Services, a subsidiary of Yahoo. Marketers pay each time Web surfers click on their ads…So-called content targeting, which Sprinks pioneered, expands on search engine advertising by delivering ads to Web pages based on subject matter and other contextual hints.
“Keyword-based contextual advertising will begin to lose its luster within 12 months, as high-spending advertisers find targeting attractive but creative opportunities limited,” said Gary Stein, a Jupiter analyst. Instead, Stein said, search-oriented companies such as Google and Yahoo must evolve by introducing geotargeting, or location-based advertising, as well as by offering “the ability to buy increasingly rich media ad units and purchase beyond simple relevance.”
Google and Overture have already started testing systems that let advertisers confine their pitches to people from specific locales. Google introduced its service, called Regional Targeting, to its AdWords advertisers last week.
Above all, analysts said, Google is looking to improve the relevancy of its advertising results.
“The greatest challenge that Google faces in the face of growth is customer satisfaction and relevancy,” Jupiter’s Berk said. “The whole economic model is based on relevancy. It’s one thing to build a major distribution network; it’s quite another thing to scale that, having over 100,000 customers. That’s a big risk, and they have to be careful managing it.”