FAST AdMomentum: Publishers Can Throw Out the Third-Party Ad Networks
By Tom Foremski - February 5, 2007
FAST Search and Transfer, the European based search giant, today announced software that allows online publishers to serve contextual ads to their readers.
The FAST AdMomentum software could increase ad revenues by more than 200 per cent for some publishers, compared with large advertising networks such as Google AdSense and Yahoo Publisher Network.
This is a software package installed in a publisher's data center. FAST says that it could also be used by a third party to offer a ready made online contextual advertising network that could be used to service many smaller online publishers such as blog networks. This means it could be used to compete with up and coming advertising networks such as FM Advertising, and AdBrite.
Publishers collect between 30 per cent to 70 per cent of the revenues that their advertising network partners receive--an amount that varies according to each deal. Google doesn't disclose the revenue split.
With AdMomentum, large publishers can establish their own advertising networks that support contextual ads, and also offer a wide variety of other types of advertising revenue such as impressions, pay per click, and also auctions.
Advertisers have a self-service interface and the software API is compatible with current advertisement tracking tools.
More than a dozen large publishers around the world have been beta testing the software.
Perry Solomon, VP of strategic market development at FAST, told SVW: "AdMomentum can be used to target ads to specific groups of people. One of our customers in Norway is using it to target ads to people on a street by street basis."
"This is a way for publishers to capture the share of the revenues that have been going to the advertising networks," he added. "The publishers already have advertisers, and they have the content, they don't need the advertising networks. We can provide them with a revenue engine."
Nearly one-half of Google's revenues in the past, have come from its AdSense network, which serves advertising on sites owned by online publishers. Large publishers such as New York Times, Knight-Ridder, and Time-Warner use AdSense.
Foremski's Take: This is potentially a game changing product and it brings back the advertiser relationship to the publisher--where it belongs.
For example, I've always wondered why the New York Times would run AdSense on its online front page, and the AdSense ads carry a text link at the bottom "advertise on this site." That says to everyone "we have no clue how to monetise this space and have handed over the customer relationship to a third party." That is suicide in today's world.
The advertising networks take a huge cut considering that they establish self-service advertising interfaces and run a bunch of servers and some software. Well, now the publishers can now do the same and cut out the middleman.
I can also see AdMomentum being used by local newspapers to essentially become the "AdSense" for their regions. They could sign up smaller online publishers within their local towns and neighborhoods and provide a much better targeted service to businesses and residents.
Additional Info:
FAST is headquartered in Norway and is publicly traded under the ticker symbol 'FAST' on the Oslo Stock Exchange. The FAST Group operates globally with presence in Europe, the United States, Asia, Australia, the Americas, and the Middle East. For further information about FAST, please visit www.fastsearch.com.
By Tom Foremski - February 5, 2007 | Permalink | Comment
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Comments (5)
Everybody knows that content matching isn't the problem to solve when it comes to contextual ads of the kind discussed here. The main problem is to make the business model actually work as planned:
To bring in the most money, and to make sure that contextual ads are contextual enough, you need a VERY large base of advertisers and advertisments. If you have an article that should match "suitcase", and you don't have a suitable ad to show the reader, performance of the ads that're actually shown will be low. I.e. you won't bring in any money.
There's an additional problem. Traditionally, contextual ads has gone hand in hand with auction based pricing of clicks. But with a low number of advertisers, the auction based model really won't work. Most keywords will be sold at the minimum price.
I guess that's some of the reason why NYT uses AdSense: This business model needs the size of networks to work well.
Posted: February 5, 2007 10:44 AM
JX: Why is it then that GOOG et al are so bad at contextual advertising? In one story, a large electronics trade publisher gets potato chip ads on semiconductor stories. Surely GOOG has *the* largest advertiser base? If you own your own ad network you know your advertisers and where they should be shown.
What is more important is that you own your relationship with your advertisers rather than letting a competitor own it. Remember GOOG, YHOO etc are media companies, they publish pages of content with advertising around it.
Posted: February 5, 2007 11:40 AM
Good points, Tom. Even though it may seem so when you read my first comment, I don't mean that contextual matching can't be better. It can, and it should. I also think you're right in saying that the relationship to the advertiser should belong to the publisher.
However that doesn't change my main point, What brings in the big money here, is that you've got enough advertisers for the auction model to actually work. And in extention: That you have enough ads to match your content to.
Of course you won't have to use auction based models with content matching; you don't even have to use a pay per click model. But since these things are mentioned in you post here, I merely wanted to mention that -- in my opinion -- these models needs "network size" to actually work. My guess is that most sites that try to implement these models by themselves, will experience a drop in revenues.
But content matching can be useful with other models too (fixed prices, pay per page impression, etc). In those cases I guess standalone sites can gain by using a product such as this.
Posted: February 5, 2007 12:59 PM
JX: We agree on many points. You mention that to bring in the "big money" you need network size. Well, if you are looking for "big money" GOOG and YHOO and MSFT bring in peanuts, not even roasted and salted.
I don't run them on SVW. Why give up precious on-screen real estate for a product that does my readers no good at all. Because I write a "blog" I get ads for blogging, and other useless ads. My readers aren't going to click on those, they are of no benefit to my readers. This is despite the large "network effect" you mentioned.
I think there is a lot of mythology surrounding these ad networks that needs to be dispelled and people educated.
Posted: February 5, 2007 1:33 PM
Yes. I think we agree on almost everything, Tom.
I think it all boils down to one think: I don't think small players will benefit from using the big player's business models. I.e. I don't think auction based pricing will help anyone but the very large sites online (if you try to do this standalon), because you need a lot of bidders to get high prices.
Posted: February 8, 2007 2:04 PM