Sluggish economy hasn't affected in-text ads

Kontera says marketers are embracing in-text ads as they try to improve their yield

In-text advertising is a pretty nascent, but growing market. According to Bryan Everett, senior vice president at Kontera, in-text advertising is about a $100 million annual business. In-text ads are ads that are linked to keywords in an article. For instance, in this Smart Money article on Sarah Palin, John McCain's choice for vice president, you'll notice certain words, such as "presidential" or "Republican" or "politics." If you scroll over those words with your mouse, you'll notice pop-up advertisements.

Bryan said that the click-through-rates for such ads - once a mouse scrolls over the keywords - is between 12 percent and 20 percent. This compares to click-through rates of two-tenths of a percent for contextual ads around the text. Advertisers pay about 50 cents to $5 per click, said Bryan. That amount is split among the publisher and Kontera.

This sounds too good to be true. More inventory to monetize and high click-through rates.

But there a couple challenges to such advertising. First, one assumes a lot about the reader, such as the reader's intent. In search advertising, a person is intent on seeking something. To that end, they're more inclined to click on ads. But for in-text ads to even have a chance to work, a reader has to want to mouse over those words. How often do you mouse over words when you're reading an article? 

We've already seen how contextual ads work relative to search ads. They're not that good. 

This is evident in a report by Efficient Frontier. According to the marketing company, CTR on Google search was 2.14%, or 31 times greater than Google's content network at .07% in December 2007.  

Another challenge for Kontera is really matching the right ad with the right word. 

But there is a business here. Kontera's rival Vibrant is apparently doing well in this space. And, there's always room for more than one player.

(Note: Make sure to watch the upcoming episode of Vator Box where we  - me, Ezra Roizen, and our guest host Technorati CEO Richard Jalichandra discuss Kontera)