Most publishers are either looking to capitalize on the CPC text link advertisement bidding concept or they already have a plan for implementing something in this space.
IDG found their private-label CPC bidding tool solution with Quigo, a competitor of smaller ad services companies such as IndustryBrains and Kaboodle. The system they created together is called “TechWords“. It’s a contextually-placed text link ad unit that runs across IDG’s portfolio of tech sites (or most of it, anyhow) in which advertisers can bid for placement.
This is exactly the right way to reinforce your brand as a publisher rather than water down your marketing potential through a larger mostly blind ad network. As Joe Wikert put it:
“Why should Google have all the fun? … Kudos to IDG for proving that disintermediation is alive and well! I’m surprised we’re not seeing more and more of this popping up, at least on the sites that are part of a larger network within one parent organization.”
If I sell complex IT equipment such as enterprise database systems, I’m going to have better luck reaching potential customers and converting them to sales by advertising through a brand that talks to people about databases than I will by blasting links out into the wild hoping they stick. And I should be willing to pay more for that opportunity.
…Or at least that’s what IDG is counting on.
Of course, IDG already uses IndustrBrains for basically the same thing which has proven to work pretty well. The problem is that IndustryBrains requires some manpower to build and retain the advertiser base. This has a cost which gets passed back to the publisher. Publishers usually have a sales force in place that would rather take those commissions than share that revenue with a service provider.
What IDG is about to learn, I think, is that you want your sales force spending time developing relationships and coming up with higher value opportunities with the heavy-hitting marketers rather than dialing for dollars with smaller CPC marketers. Though I wouldn’t be surprised if they plan to hire a classifieds sales team to operate this…and then you have the overhead costs of paying, training and managing people. There goes your margin.
Also, this is yet another ad unit on an already densely covered page. You’re not going to increase your revenue cap by meaningful numbers by squeezing a few more text links on the page.
There’s a lot of future potential when you have a closer relationship with your advertisers like this, regardless of the ad platform. I’m hoping they start working on ways to leverage TechWords into something that will support the next generation media models such as mashups and other syndication models. If nothing else, testing out the concept is really important at this stage in the game. I think we’ll see more and more media companies doing this kind of thing soon.