While Google still reigns supreme in search, its contextual advertising network has increased competition from old rivals and publishers themselves.
Yahoo has begun testing a new cost-per-click ad network that takes a different approach than Google's AdSense contextual network, which relies on scanning a Web page's content to display relevant ads. Yahoo! has partnered with Revenue Science, a Bellevue, Wash., behavioral targeting company, to quietly test a cost-per-click ad system that shows text ads based on user profiles.
"There's a big portion of the Web that's a contextual desert," said Omar Tawakol, Revenue Science's svp of marketing, adding that targeting site behavior often yields better results. "There's a ton of sites on the Web like entertainment, blogging and social networking sites—all those sites are better served by focusing on the user, not what's on the page."
The experiment is part of a Yahoo! push to build a credible competitor to the 2-year-old AdSense system. Next month Yahoo! plans to launch the Yahoo! Publisher contextual ad network to allow small Web sites to sign up. A Yahoo! rep said it would include safeguards against click fraud, a common complaint of AdSense advertisers. It is not expected to include behavioral targeting at launch.
Google has focused on evolving its vast reach across the Web through AdSense's text listings into a full-fledged ad network, recently adding impression-priced graphical ads.
Yet the vast reach of Google's network has caused some higher- profile publishers to feel slighted. Newsday and The Houston Chronicle have replaced AdSense with their own text-ad systems. Michael Yavonditte, CEO of New York-based Quigo, which provides the back-end for Newsday's and The Chronicle's systems, predicts more Web publishers will follow this model.
"Over time, just as they built their own classified business, these publishers are going to build their own CPC marketplaces," he said.