Overture Releases Contextual Ad Product

Overture Services announced on Monday the official release of its long-awaited contextual-advertising offering, four months after archrival Google released its own.

Content Match gives Overture’s 88,000 advertisers another outlet for their keyword-based ads. With the product, keyword-triggered text links appear on relevant content pages of distribution partners. Overture announced four distribution partners: MSN, auto site Edmunds.com, the Away Network, and Advertising.com. The implementation on each site differs, with most displaying three or four paid listings down the right side or at the bottom of the page

“We have been working on this product behind the scenes for four to six months,” said Bill Demas, Overture’s senior vice president and general manager of its partner business and solutions unit. “We’ve been very methodical with our approach.”

The most important partner for Overture, and its advertisers, is MSN, which will carry the contextual ads on a half dozen of its channels, including fitness, health, and technology. Overture distributes paid listings on MSN’s search site, too.

The result is an offering that differs significantly from Google’s Content-Targeted AdWords product launched in late February. While Google has gone for wide distribution with a self-service program that allows small site publishers and bloggers to sign up on their own, Overture has focused on high-quality sites, Demas said.

“We’re not going to go for very wide distribution,” Demas said. “If you’re an advertiser, do you really want to be on someone’s blog?”

In addition to Google, Overture faces competition from About’s Sprinks, which distributed contextual links to Forbes.com, CBS Marketwatch, and America Online properties like Netscape and CompuServe.

While some have questioned whether contextual links will perform as well as those on a search results page, Demas said Overture’s testing did not bear out those fears.

“We recognize it’s a different kind of search,” he said. “We think it’s an absolutely viable source of traffic.”

Like Google’s program, advertisers can opt out of Content Match, although Demas said he doubts many will.

Demas pointed out that Content Match relied heavily on Overture’s editorial team, which numbers over 100, to avoid poor matches that a technology-dependant approach inevitably produces. As an example, he said a story about a person stabbed to death could easily carry knife advertisements.

“We’re combining three sets of characteristics: advanced technology, superior editorial mapping, and customized implementation,” he said.

Overture has high hopes for the contextual advertising, which it reckons could be a $2 billion market in five years. Overture has earmarked this year for re-jiggering its business, branching out to seven new markets abroad, rolling out a local search product, and introducing paid inclusion. All the moves are designed not only to grow its business, but also to diversify it away from over-dependence on its two largest distribution partners, Yahoo! and MSN, which generate about two thirds of its revenue.

In all, Overture CEO Ted Meisel said the wider distribution of paid listings could grow the market to be worth a total of $15 billion in 2008.