Paying Google for Audiences
Jorge Espinel / May 2, 2008
I am increasingly surprised by how many more sites seem to be looking to build audiences through SEM efforts. The concept of using a direct marketing ad unit such as paid search to promote content websites has seemed strange to me. The idea of having to continually advertise to be able to aggregate audiences seems at first glance a flawed (or unsustainable) model. However, given how aggressive competition for audiences is on the Web, sophisticated SEM strategies increasingly appear to be a critical tool for content sites aggregate the necessary page views to reach scale and deliver on their advertising commitments – particularly those of premium advertisers who demand delivery guarantees.
As a result, setting up a model that uses low cost paid search marketing to aggregate audiences that can be sold to premium advertisers appears to be smart approach. Critics may call this strategy an arbitrage game. Yet, it is not necessarily that. Premium advertisers care about “context” and high quality content provide that needed “context”. If high quality content providers are able to break through the clutter on the Web by using SEM techniques (obviously in addition to optimal SEO), brand/premium advertisers benefit because they are able to reach those audiences that increasingly avoid them on other media but they do so in a context that they deem appropriate.
Broadband Enterprises (a Velocity portfolio company) recently launched a content syndication engine that uses a similar strategy but through display banners. Broadband Enterprises buys display ad inventory designed to generate video views. That way they are able to guarantee a certain amount of views to their premium clients (which is what they have been asking for).
The role of high quality content providers has always been to deliver a product that aggregates compelling audiences for advertisers. Online SEM increasingly is becoming a critical tool to be able to do that in the online world.
Interesting implication: Google has some additional paid search growth coming his way.
