Google Grabbing at Content-Based Ad Market

Internet publishers, says Google, will be able to monetize areas of their site for which they have not been able to sell ads. Setting up a site to be served content-relevant Google ads can take as little as 10 minutes, the company says.

Google's largest content partner for the new service is Knight Ridder's (KRI Quote) Knight Ridder Digital unit, operator of sites affiliated with such papers as The Miami Herald and The San Jose Mercury News.

First Impressions

Though advertisers on Google pay on a per-click basis -- that is, they pay only when Internet users click on their ads to visit their site -- Google says it will pay publishers on an "impressions" basis in the new program -- that is, a flat rate whether or not people who see the ad ever click on it.

Acknowledging the risk, Wojcicki says Google is willing to pay on a flat-rate basis while getting paid on a performance basis because the company is confident that Internet users will indeed click on the ads. "People are much more willing to click on an ad if it's targeted and related to content," she says.

For its part, Overture says its contextual advertising program and a separate local advertising venture were recently given the go-ahead after "several months" of research. While costing $10 million to $12 million in 2003 and generating minimal revenues, local and contextual search are expected to break even in 2004, says Overture.

As part of its announcement, Google said its active customer base has surpassed 100,000 advertisers -- 20,000 more than the base of active customers that Overture claimed as of Dec. 31. Unlike Overture, however, Google doesn't disclose advertiser revenues, so it's unknown how much their customers are spending.