Sunday, June 19, 2005

Ads That Turn Readers On

The Online Publishers Association is previewing results of their latest User Experience Study in a road show that I attended last Wednesday in Boston. The study revealed the top usage drivers that keep users returning to news and other popular destination Web sites. Along with the expected attributes, such as Entertains, Absorbs Me (1), Regular Part of My Day (3), and A Credible, Safe Place(5), the ninth most important user driver is: Turned On By Ads (9).

In the era of annoying pop-ups and flashing ads that interfere with the user's ability to read editorial content, why does "turned on by ads" rank among the top reasons for returning to a Web site? Shore has followed the evolution of online contextual ads (see here, here, and here, for example) and we have underscored how well-placed contextual ads that provide links to relevant products, services, or content can enhance a site, in addition to contributing advertising dollars.

ContextWeb, one of the new-breed contextual advertising firms, offers technology that improves upon the standard contextual matching algorithms and furthermore offers added control to both advertisers and publishers in choosing how to optimize ad placement. (See our earlier NewsAnalysis for more insight into ContextWeb and its technology.) Perhaps most important, ContextWeb's ContextAd platform dynamically indexes Web pages in the network so that news and other frequently updated sites can benefit from true contextual matching. In a recent conversation with ContextWeb's senior management, Anand Subramanian, CEO of ContextWeb, explained that some publishers are using ContextAd to monetize their archival content, since the technology does not require pre-indexing the entire collection. With recent deals announced with Meredith Publishing and HighBeam Research, it is clear that leading publishers and aggregators are catching on to the benefits of ContextAd.

The announcement today that they have secured $9 million in series B financing led by Updata Partners will bolster ContextWeb's ability to expand its network to include additional publishers and aggregators. Even with consistent improvements introduced by Google and Yahoo!, there is ample room for players like ContextWeb in the rapidly growing field of online advertising. I would really like to see some STM publishers experiment with ContextAd as an alternative--or adjunct--to subscription and pay-per-view models of monetizing online journals and archives. In the process, publishers may find that they improve the readers' experience with useful informative advertising content.
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