Google unveiled on Wednesday a self-service program for publishers to serve up its contextual advertising, in its latest move to steal a march on rival Overture Services in the new business arena.
The AdSense program allows Web publishers can apply for the program online. After Google vets a site for popularity and quality — a process the company estimates will take two to three days — accepted applicants download a string of HTML code to insert on Web pages on which they wish to carry text-link ads. Google draws the listings from its base of 100,000 advertisers, using its algorithmic search technology to scan the content page and match it up with relevant links that are displayed as either skyscraper ads on the right side of the page or banners at the top.
“We think that this program, can fundamentally change the economics of content creation, said Susan Wojcicki, director of products at Google. “It will allow content creators to focus on creating the content and not on selling ads.”
The service is free for publishers; Google pays them an undisclosed amount each time a visitor clicks a link. Google would not disclose the revenue split.
“We designed it to be very aggressive and very generous,” Wojcicki said, adding that publishers could log on to get daily information on their click-through rates and earnings.
AdSense will offer small Web publishers, like bloggers and hobby site operators, to tap into potential advertising dollars, while simultaneously giving Google’s nascent Content-Targeted AdWords program vast distribution.
“There’s no doubt that there’s lots of great niche content out there,” said Danny Sullivan, editor of Search Engine Warch, which is owned by the parent company of this site. “And the people that operate it make no money off of it.”
So far, Google has signed distribution deals with Lycos Europe and ad networks Burst Media and FastClick to carry its contextual links. The company also buys low-priced run-of-site ad space on some larger sites.
Wojcicki said Google would continue to mix CPM buys with revenue-split deals to draw in larger partners. Contextual links are also appearing on ABC.com, Internet Broadcasting Systems, and New York Post Online.
Sullivan said AdSense could tap into the same phenomenon that’s made Amazon.com’s affiliate program so popular. Unlike the Amazon program, however, Web publishers in AdSense get paid for clicks not sales.
“The challenge I think for Google down the line is that people may want more money for it,” Sullivan said.
AdWords advertisers concerned that listings on hobby sites might not generate qualified leads are permitted to opt out of contextual advertising. Wojcicki said few have opted out so far.
AdSense also puts more pressure on rival Overture, which is readying the release of its own contextual advertising product this summer. With its distribution deals, ad buys and self-service program, Google has been able to build a sizable distribution network in short order since Content-Targeted AdWords debuted in February.
Under the terms of AdSense, a Web site cannot carry paid listings from another provider.
Primedia’s Sprinks unit is also a competitor in the space, boasting paid links distribution deals with some AOL properties, Forbes.com and iVillage. The company expects to conclude an agreement with Yahoo! soon.
Google has long been interested in small Web sites traditionally ignored by advertisers. In its initial rollout, Google included contextual ads on sites hosted on BlogSpot, part of a Weblog company Google bought in February called Pyra Labs.
