In-Text Advertising - Opening A New Line of Publisher Revenue, Naturally

by Gary Stein
53x11 Brand Consulting

Nice Problem to Have

In early 2005, The New York Times reported that many sites—particularly news and financial sites—were experiencing a shortage of advertising inventory. In the following months, more stories began to circulate: automotive sites were 85% sold out through the end of the year, home page inventory was a dream, and good-luck reaching any of the sought-after demographics. Media buyers and planners, who just four years previous were practically going door to door looking for companies that wanted to advertise online suddenly found themselves scrambling, looking for good placements.

The situation wasn’t much better for publishers. Certainly, they enjoyed the flow of revenue and the ability to creep the cost-per-thousand (CPM) impressions back up toward late-nineties levels. But the fact is that no one wants to turn away customers, and advertising is a fickle business: revenue streams are never guaranteed and opportunities definitely need to be taken.

The result of the Great Ad Shortage of 2005 was a feverish renewed interest in how the technologies of the Internet could help alleviate the challenge of placing ads. That is, there was a shift in the thinking about ad space, away from considering it to be a finite resource and toward innovations that would open up new spaces and new ways to advertise.

The perception of an advertising space shortage breathed life into many new concepts, including behavioral targeting, contextual advertising, ad-networks, and optimization systems. It also invited both publishers and advertisers to consider new places for ads to appear, including on mobile devices, in games and in applications.

In-text advertising straddles both of those approaches. In-text advertising provides a new, elegant approach to targeting as well as placing ads in previously unused space. However, as with most new approaches and innovations, the solution requires a level of insight and consideration to the effect that it will have on all constituents: advertisers, publishers and consumers. Considering these issues, though, can generate an opportunity that provides both new revenue and advanced learning for publishers, as well as highlytargeted media for advertisers.

Overview of In-Text Advertising

In-text advertising is most similar to contextual advertising, but there are critical differences, both in how ads are presented and how the ads are served. Publishers who best understand these differences are in the best position to take advantage of the benefits of in-text.

Contextual advertising is a system whereby text-ads are served alongside content. When a page of content is served, a call is made to a server, run by the contextual advertising service. That call invites a quick crawl of the content, in much the same way that the page may be crawled by a search engine for indexing. A determination is made, by the crawler, what that particular page is about. The service then pulls ads from its files that would be relevant to that page.

In-text advertising systems crawl the page in a similar way. But, the contextual system needs to make a determination as to what the entire page is about; the system can only come to a single conclusion. In-text systems, instead, look for the occurrence of particular keywords that are of interest to advertisers, and places the ad in a tool-tip style balloon above the keyword. This ad is only visible when the user places his or her mouse over the keyword, and keywords with ads are connoted in a way that is visually distinct from both other words on the page, as well as other, traditional links.

In-Text Advertising Opens up the Long Tail

Imagine a Web page about trends in dieting and exercise. Let’s say that this is a page that runs down the best tips from dieticians and personal trainers from across the country. Some recommend low-fat, high-protein diets. Others talk about the value that comes from cardio training such as spinning classes or aerobics. Another stresses a holistic approach that incorporates Yoga.

A traditional contextual advertising system would need to analyze this page and come to a single conclusion about its meaning, and pull advertisers that it believes are relevant. The best the system would be able to achieve would be to focus on a category-level determination: this page is about fitness. It would then pull advertisers from its database that were appropriate for fitness. An advertising optimization system would need to perform the same operation, but would use an iterative approach (and one that is also used by contextual systems): try a small pool of ads out on the page and see which one performs the best. The system would then serve those types of ads consistently.

An in-text system provides a new approach, and the only one that allows a finer level of control on the ads served. Since the in-text system works at the keyword level, it would be able to serve diet-appropriate ads on the diet-keywords, cardio-appropriate ads on the cardio-appropriate keywords, Yoga-appropriate ads on the Yoga-appropriate keywords and so on.

This ability, inherent in the technology and the concept of in-text advertising is what not only sets it apart, but points to its power and the reason why publishers will rapidly begin experimenting with and adopting in-text in 2006. In-text helps to crack open the Long Tail for both advertisers and publishers. The Long Tail is an economic principle that helps to explain the appeal of the Internet. The principle is complex, but the salient notion is that the systems and the scale of the Internet can allow for the profitable serving of all niches, no matter how small.

In the example above, the majority of relevant advertisers would be locked out of placement on the page. A Yoga studio may not consider itself to be a part of "fitness" and would therefore not select that keyword. Or, if the article was written in a way that favored the concept of exercise, the contextual or the optimization system could be led away from serving diet ads.

Challenges with In-Text: Keeping and Releasing Control

In-text advertising presents a fantastic opportunity to use existing content resources to generate targeted ads and brand-new inventory. However, only publishers who are willing are to understand the challenges will benefit from in-text growth. In general, these challenges stem from issues surrounding control over content and the ads that are placed by them. Publishers have long been grown accustomed to being in complete control over the ads that appear with their content—they are the owners of the content, after all.

But the dynamic technologies of digital publishing and ad targeting require publishers to relinquish some control over to trusted systems able to make determinations about precise ad placements. For in-text advertising there are essentially two areas of control that publishers need to focus on: the ads themselves as well as the sources of content.

For the ads themselves, publishers must become comfortable with the notion of introducing ads into the content itself. Internet placements have been moving closer to the content over the years, with large display ads appearing in the middle of articles, for example. In-text actually creates a fairly elegant solution to the problem of placing ads within text, by making the display of the ad entirely user-initiated. That is, the ads do not automatically appear on the screen on page-load, but rather only when the user rolls the mouse over specially tagged words. Research has consistently shown that consumers not only appreciate so-called "polite" ads more, but the initiation itself appears to help the consumer notice and ultimately remember the ad: they are the ones who are asking for the information, after all.

But even "polite" ad systems can offend consumers. For in-text, there are two ways that a publisher can go wrong: overloading a page and choosing the wrong page. Overloading refers to the placement of too many links on a single page. Since the in-text ad interface presents a new kind of link to the consumer (generally a double-underline link), a significant number of these on a page would become distracting to the reader, ultimately decreasing the likelihood than any one ad would get a click.

The other danger is choosing the wrong pages to place ads upon. Since these ads will appear directly within the content of a page, there is the potential for offensive placements. For example, a tire-manufacturer’s ad appearing within a news story about a car crash would clearly upset the publisher, the advertiser and the reader. In-text placement systems are best used when they are incorporated into pages that the publisher knows will not have hard-news style content. In-text is successful when it is strategically applied to the inventory as a whole. Additionally, systems (such as Kontera’s) which provide a level of intelligence alongside the ad-picking technology can help to avoid these potential issues automatically.

The second area of control that publishers must consider is the source of the content itself. In a sense, the more content available, the larger the opportunity for the publisher. This is the economic (if not the cultural) reason that so many publishers have been attracted to user-generated media, forums and blogs. The technologies that allow consumers to place their opinions (as well as their actual observations) onto a publisher’s site opens up a new wealth of potential ad inventory, provided it is approached correctly.

That correct approach means, primarily, that publishers and their readers must engage in a relationship which, at the start, has an understanding that advertising will be a part of the content provided by the consumer. Many of the (so-called) Web 2.0 companies that began life solely as content-sharing communities are slowly moving over to ad-supported models. They will have a difficult time retaining their audiences, who have come to accept a lack of ads as a part of the service. The introduction of ads will cause a defection toward other, non-ad supported services.

Publishers who want to create content-sharing networks and communities should adopt ad practices at the outset. If ads are always a part of the service, there will never be that discouraging day where community members log on and all of a sudden see ads. In fact, under the best circumstances, there may potentially be a day where the members may log on and find fewer ads.

In-text is a good ad-delivery vehicle for this situation, for two reasons. The first is that, contextually-based systems are best suited to find the best ads for user-generated content. Comments in a forum, for example, can be wide ranging. Consider the example above of an article on fitness trends. A forum attached to that article could spark comments about yoga and diet, but also may generate content about herbal remedies or even celebrity gossip ("did you see that so-and-so lost 80lbs on the Rice Diet?!"). Contextual systems are able to pull appropriate, targeted ads for this wide variety of content.

Secondly, and perhaps more importantly, is the culture surrounding user-generated content. Although publishers may be the creators of forums, and usage-agreements may state that the content created is the property of the publisher, members of the forum tend to feel a strong sense of ownership, not only of the space, but also of the content itself. The introduction of in-text ads to this space needs to be handled precisely the same way that it is handled for the rest of the site: strategically and judiciously. Similar to the example above, advertising may not be suitable for all forums. Discussions around tragedies or critical world events may not be appropriate for ads.

But, publishers should view in-text as a potentially innocuous method of inserting advertising. Thanks to its polite display methods, members can read and respond to posts as if the ads weren’t even their, if they are not interested. If they are, the ads do not disrupt the flow of content at all, as the messages simply float above the posts themselves.

Novel use of In-Text: Intra Site Search

Publishers using in-text that offer a range of control can use the technology not only to serve ads, but also increase the so-called stickiness of their site. That is, in-text technology can be tuned, by the publisher, to generate a new breed of house-ads, which keep visitors on their site longer by merchandising related content within an actual story.

Consider, once again, the hypothetical story about fitness trends. If this story were running on a newspaper site, which would have stories about multiple subjects across several categories, an intelligent in-text system would be able to link individual elements within the story to other, relevant content. For example, the "yoga" link could be connected to a review of local yoga studies that was published in the past.

The result is not, of course, revenue generated through advertising. Rather the in-text advertising system is being leveraged, thanks to its ability to both scan through an article for category keywords, as well as provide additional content and links in a way that does not interfere with reading the article.

While it has long been a practice to place related links at the bottom of articles, in-text provides an additional level of functionality that improves the overall experience. The first is that articles that cover broad ground can have relevant links placed directly alongside key ideas. The fitness trend article would have a long list of links at the bottom, of seemingly unrelated content.

Further Developments in In-Text

In-text advertising is in its early years. Publishers are just beginning to truly understand not only what the systems can offer, but also how to implement them in a way that not only generates revenue and opportunity, but also respects the value of their content and their site visitors.

As in-text becomes more widespread, consumers will become more familiar with its format and its presence. The closest analog to in-text’s development is search advertising. While search advertising very quickly rose to become on of the largest contributors to online advertising revenues, it needed to move through an adoption phase for advertisers, publishers and consumers. All three constituencies had concerns, not only about how ads should appear alongside search results, but also how effective these ads would be.

Search ads, today, have become an accepted part of the online experience. Some consumers even report that the ads appear to be more relevant than the natural results. Intext is on a similar learning curve. Provided publishers understand how to use the technologies afforded by systems that can be managed and structured, the ads can be relevant, polite and effective.

Systems, as well, will develop along at least two lines. The first will be in display technology. Consumers will begin to find richer content in the in-text experience, with animation, video and interactivity replacing the standard text-only ads predominantly seen. The other axis of development will be in the realm of relevancy and control. No one benefits from poorly-placed advertising, and in-text systems are developing both their back-end systems to be better at finding keywords in content and choosing the correct ad to attach to those words.

More so, these systems will continue to push this control back to the publisher, allowing them the flexibility they need to tune these systems so that they are not only good, but good for their particular sites and their particular needs.

Contact Gary Stein at gary@53x11brand.com.