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)
Founder and CEO of Vator, a media and research firm for entrepreneurs and investors; Managing Director of Vator Health Fund; Co-Founder of Invent Health; Author and award-winning journalist.
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Kontera is a leading provider of In-Text contextual advertising and information services based on patent-pending technology that maximizes relevancy and yield for online advertisers, publishers, and users.
The company’s flagship product, ContentLink™, identifies contextually relevant keywords on a publisher’s webpage in real-time and automatically matches them to relevant ads and information. Kontera's ad network encompasses thousands of publishers using ContentLink ads on websites, forums and blogs, for generating revenues from their content while providing relevant ads and information to their users.
Leading international advertisers in a broad range of product categories benefit from improved ROI on their Pay per Click Advertising Campaigns with Kontera's ContentLinks. Kontera ensures optimal relevancy between ads and users' online experience by serving ads and information that suit the user's frame of mind.
Kontera´s Online Advertising Program is based on advanced patent-pending technology which enables real-time analysis of static or dynamic content. The company has developed proprietary semantic, statistical, linguistic, and yield maximization algorithms, which analyze content, select keywords and then match them to the most relevant contextual ads and information. Kontera's competitive edge and ability to best serve its partners stems from its advanced technology, wide range of eminent advertisers, vast network of publishers, and years of experience in the In-Text Advertising market.
Kontera was founded in 2003 by co-founders Yoav Shaham, Assaf Henkin, and Henit Vitos with the vision of providing relevant information to users at the point of context. Kontera is a privately held company backed by Sequoia Capital, Lehman Brothers and Carmel Ventures, with offices in San Francisco, California New York, New York and Herzliya, Israel.
