Rumor has it they’re adding an API — but only for advertisers. The goal would be finer-grained campaign scheduling and optimization, but not for publishers to shop which ads they’d like to run. Already, some of the commentary has focused on publishers’ wishes to replace the mapping function that assigns ads to pages — sometimes, the last thing you want to see on a tech news site is yet more ads for microprocessors. Perhaps, as one publisher put it, you’d be better off with 5% of a lobster-and-caviar referral sale at Amazon during the holidays :)

Lots of additional details in the extended entry…

Google is about to unveil a completely revamped Adwords/Adsense program to counter inroads from competitors such as Kanoodle (Silicon Valley Watcher: Scoop!)

The text ads business is crucial to maintaining Google’s pace of growth and its share price, which reflects high expectations for the dominant search giant. But Google offers few tools to advertisers to let them control where their ads appear and on which web sites. Similarly, web site publishers have virtually no control over what types of ads Google sends their way. This has caused some shifting to competitors such as Kanoodle that offer such controls.

That’s why the revamped Adwords/Adsense will provide a suite of tools that provide greater control, management and monitoring data to advertisers, to better target their sales messages.

Google AdSense – Premium Service Overview

Google combines an editorial team, filtering technology, and your input to create a robust set of filters that are right for you, including:

  • Editorial review. Across the Google Network, ads do not run on partner sites until they have been reviewed and approved by Google’s editorial team. We classify each ad as Family-Safe, Non-Family-Safe or Adult/Explicit. Family-Safe ads are the default for publishers’ sites.
  • Sensitive content filters. At times, certain ads may not be appropriate to run on all pages. For example, in light of a catastrophic event, Google’s editorial team and technology filters out ads that would be inappropriate on a news page at that time.
  • Customizable filters. Filter out competitive ads, ads from partners with whom you have exclusive relationships, or others you want to block.

..If your site receives more than 20 million page views a month, you may be eligible for premium service, which includes:

  • Customized revenue terms
  • Flexible ad formats
  • More robust filtering
  • Assistance with site optimization
  • Technical support from a sales engineer
  • Business support from a dedicated account manager
  • Monetization of search results

Google to provide AdWords API to Advertisers(Silicon Valley Watcher: Scoop! )

For the first time, the search giant will provide its advertisers with an application programming interface (API), which will enable them to link their computer systems with Google and control parts of the mammoth Google ad delivery system. The API will allow advertisers to self-administer the delivery, the timing and the price they will pay for their text ads.

This raises the bar in the online advertising market as Google turns to technology to try and outwit and pull ahead of media savvy competitors such as Kanoodle and others. Kanoodle says its average click-through revenue is twice as much as that of Google’s because it gives online publishers greater control over what types of advertising is displayed, at which times, and is better matched to page content or search terms.

It is but a short step from the global delivery of simple text ads to carrying commercial transactions also. This would pitch it against companies such as eBay and other online retailers.

The Google API is only available to advertisers and not to online publishers carrying Google ads.

Access to the Adwords API will initially likely favor larger companies with the technical skills to optimize their advertising delivery. However, a large third-party services market will grow around the Google API and allow smaller companies to run sophisticated advertising campaigns.

However, many online publishers want to control which Google ads are shown on their sites. This has been a sticking point with many large media groups who have turned to Kanoodle and others.

Some media groups are beginning to view Google as a competitor. The large computer industry trade publisher, IDG, has become increasingly hostile to Google. IDG views Google not as a technology company but as a media company and a competitor to its online publishing business. It has urged other publishers not to give Google access to their web content. A lot of online publishers carry Google Adsense ads because Google splits the revenue with them.

The Kanoodle boys are in town and gunning for Google(Silicon Valley Watcher)

But, as an online publisher, I’d like to have different choices of text ad types, ads that are NOT content related for example.

Why show tech product related text ads on a page about technology companies?

Before the holidays, some of our pages had a text ad that linked to Amazon’s fresh lobster and caviar page. If a reader clicked through and bought a jar of caviar for $4500, we’d get paid 5 per cent. It feels a lot cleaner to sell caviar than tech products related to page content. There are some online publishers that specifically design their content to attract whatever are the highest paying text ads on Google. Advertisers will pay tens of dollars per click for some of the more hotly contested keywords.

How much they pay is established by an online auction system that gives the highest bidder for a keyword or phrase, the top listing on a web page.

It’s a brilliant setup because the market sets the advertising fees, and thus companies such as Google, Overture and Kanoodle, can capture the exact market value of those ads without guesswork or lowering ad fees. For publishers, there is no need to do things the traditional way, to knock on doors, ring telephones and discount your ad rate card to what you think the market will bear. You always get the perfect price for your ads.

Kanoodle offers the same type of automated set up, but it offers much more. Advertisers and publishers have a wide range of choices. They can use contextual ads, or use keyword driven text, or choose text ads that are targeted to user behaviors.

Ads can be published within specific time periods only, or only on specific types of web sites.

Publishers can ensure that exclusive advertising relationships are not jeopardized and can specifically block competitor ads from appearing on their web pages.

And there are plenty more ways to slice and dice the ad type and delivery, especially if you consider Kanoodle has hundreds of advertising categories and regional publishing choices.

Its customers include many well known media brands such as CBS MarketWatch, recently acquired by Dow Jones.

Google offers no controls over ad content and where it is delivered. It just gets scattered out through its network chasing keywords in web pages. It’s inefficient, but, surely Google can just take notes and implement similar ad services packages and controls?

“They won’t because it’s not in their genes, they are engineers,” Podell says. He clearly likes that genetic metaphor but, he might be right. Josephson says there is ample proof that Kanoodle’s ad network is more effective than Google’s because it collects fees that average out to about 70 cents per click. He estimates that this is about twice as much per click than Google gets.

Gary Stein: AdSense Premium Publisher: Boost CTR

I talked to Topix today. They have a good approach to crawler and (this is the important part) categorizing news. We talked about some of their ad practices. They are a ‘premium publisher’ for AdSense, so they are able to load some extra tags into the JavaScript to get a better focus. The result? After some time spent on the site, the home page served up the following ads to me: [Ads for Ad agencies]

Clearly, it knew that I had been to the channel about the advertising industry (from its own cookie). That info is loaded to AdSense. They claim that this practice has given them a 500% boost in click-through rate on home page ads. Sounds like a pretty clear best practice to me, and somewhat akin to behavioral targeting (although only at a very high level).

AdSense Faces Extinction — Unless Google Shakes Things Up(Traffick – Internet Search Enlightenment: January 16, 2005)

When Google’s now-ubiquitous text-link advertising program debuted in 2003, it was widely praised as the ultimate advertising solution for highly trafficked sites that were hard to monetize, especially blogs.

Blogs are typically run by a single person or a small team of people, most of whom do not have the experience or ability to manage advertising programs. Therefore, AdSense opened a world to revenue for dedicated site owners who knew how to generate traffic but not dollars for their work. Webmasters would simply open an account, run the ad wizard, paste in a few lines of JavaScript code into their sites, and bingo! — instant ads on your site. The ads displayed were perfect because they were similar to the content on said site.

It was the best of both worlds. And it worked pretty well for a while.

But cracks are starting to show in the AdSense facade because of:

  1. Fickle interest in Google’s uneven AdWords content targeting, which provides the source of the text ads, as well as the risk of PPC fraud that is causing many AdWords advertisers to shut off content targeting
  2. The combination of lower clickthrough rates and fluctuating equivalent CPMs
  3. Expanded options for publishers that didn’t exist or weren’t mature when AdSense arrived.

Then there are the questions of accountability on Google’s part. How do you know that you’re getting full credit for your clicks? How do you know that unscrupulous publishers aren’t committing PPC fraud on your ads?

I don’t have a full body of evidence to support this suspicion yet, but the signs are growing.

Many publishers are concluding that the risk of AdSense isn’t worth it and realizing they can operate their own text-link advertising programs and generate far more revenue per month than with AdSense.

Then there are the many affiliate options (oh, the horror!). For popular blog sites, there’s also the burgeoning BlogAds network. It’s as easy to operate as AdSense and much more targeted and lucrative than AdSense. Another one to bear watching is RSSAds, which hasn’t launched its service yet, but promises to allow publishers to monetize their RSS feeds. It’s sort of an AdSense for RSS feeds.

Maybe Google’s looking at something similar on their own. They’d be silly not to. Given Google’s stated mission of blanketing online content with content-targeted ads, you can bet they will be watching that outfit closely.

It’s too soon to tell if these factors will seriously threaten AdSense, but Google must surely be concerned. But even if Google can solve these problems, the concept itself still might not be the right solution.

For sites with a loyal following of repeat visitors, AdSense proves less useful to them over time, especially if the ads are essentially unchanged for long periods of time. Visitors will simply tune the ads out if they get too familiar with them.

All of this leads me to believe that AdSense is not long for the world — unless Google makes major changes that restore the perception early on that AdSense was worth it for publishers. Here are some things Google can do:

  1. Increase the revenue share to publishers
  2. Provide more accountability so publishers know if they’re getting the value they need
  3. Provide more transparency and allow publishers to more easily “hack” AdSense to their advantage
  4. Offer more customization options for the ad creative, such as randomizing the order or putting limits on how many times an ad can appear
  5. For advertisers, make it even more compelling to choose content targeting. AdSense doesn’t work unless there is a large enough stable of ads to display.

I’m not ready to write AdSense’s obituary just yet. I’m confident that Google will acknowledge these risks and take steps to rectify them before too many publishers flee.

Posted by Cory Kleinschmidt