How niche publishers will capture more share of online advertising revenue

Scott Karp of Atlantic Monthly posed the right question with his post on the search advertising market share imbalance:

"Will advertisers start to question the ROI of all the money they’ve dumped into search advertising?"

Click fraud is a serious problem, both real and perceived.  Brand advertising does impact how people make purchase decisions.  Prequalifying user intent can happen places other than search engines.

Chris Zaharias of Efficient Frontier, a SEM provider, also noted that advertisers are thinking bigger than just clicks:

"Advertisers are converting at 2.3% right now, yet good advertisers convert at 4-6%...CPC’s by themselves don’t matter. What matters is CPC times CTR."

Agencies have figured out how to dial their campaign goals to maximize clicks, but they are starting to think more about quality clicks.  B2B publishing has understood this for a long time, and there are some interesting lessons from that market for the rest of us.

TechTarget was a real pain in my side when I was at InfoWorld, a competitor, because they offer their advertisers a very efficient way to collect full names and email addresses of people who are prequalified customer targets for an advertiser.*  We were still driven almost entirely by the CPM model at the time.  IDG has since rolled out similar programs such as IDGConnect, and all the tech trades offer a variation on this theme.

It works like this:
1) An advertiser or the publisher create a white paper or webcast about their product or service or about a market trend.
2) The publisher then uses its own internal marketing muscle through its web site, newsletters, RSS feeds, and email (spam) lists to tease the offering.
3) If the offering is good enough, then people will go check it out...after filling out a form with their contact details...and approval to pass their details to the advertiser
4) The publisher then gives the names to the advertiser

This model is great at finding potential customers, and it works particularly well for niche publications who can provide a ton of context around an expensive action (filling out a form and downloading something).  Advertisers are willing to pay more per click or per lead when it originates from a prequalified environment instead of an unknown quantity like AdSense on

I think Scott is right that as advertisers learn how to capture quality actions in addition to volume, more money will start to flow to the publishers.  Publishers who aren't able to prove a click on their site is worth more than a click on a search engine will lose out on that spend.

However, a change in market share does not mean a change in growth.  It would be a mistake to proclaim a reverse in search marketing spending at this point.  Too many businesses depend on click volume.  And search engines are delivering on that need very well.  They always will.

* Why a person would value the content at a site with a name like "TechTarget" is beyond me.  I know a salesman who received a bucket of leads from his marketing department who proudly collected them via TechTarget.  He told me the leads were pretty bad and none of them turned into sales.  Maybe they should change their name to "TechConvertToSaleDamnit". 


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How niche publishers will capture more share of online advertising revenue