Comments on: Context is King http://www.lucidmedia.com/blog/2008/05/23/context-is-king/ See Clearly Wed, 17 Feb 2010 07:57:50 +0000 hourly 1 http://wordpress.org/?v=3.0 By: Anand Natrajan http://www.lucidmedia.com/blog/2008/05/23/context-is-king/comment-page-1/#comment-11 Anand Natrajan Fri, 23 May 2008 23:16:42 +0000 http://www.lucidmedia.com/blog/?p=23#comment-11 As contextual targeting becomes more mainstream, inclined, and baked into ad networks and exchanges, new patterns of contextual targeting will emerge. One imminent pattern is micro-segmenting, wherein brand and performance campaign managers try to optimize their campaign’s goals by slicing-and-dicing the inventory very finely. When that happens, a few hundred categories are not going to be enough; it’s likely that a few tens of thousands will be required. Publishers too will demand much more nuanced categorization of their own pages in order to increase revenue. A precedent for this pattern is the segmentation within the inventory of Yellow Pages. A second pattern is an increasing sophistication in targeting. Clearly, placing in-context ads increases click-through, and hence revenue. However, in-context placement is a mere way-station in the path to a bigger and better strategy for ad placement, namely, exploiting the structure of the taxonomy itself in order to improve placement, hence clickthroughs, hence revenue. For example, placing an ad about photography on a page about photography is relevant for sure, but may not maximize revenue. However, placing an ad about cameras on the same page will likely increase revenue. In fact, that ad about photography may do better on a page that lists cameras, than yet another ad about cameras! The bottom line is that the market is trending towards fine-grained categorization, because doing so increase revenue in two ways: one, increasing the worth of the inventory, and two, increasing user engagement. As contextual targeting becomes more mainstream, inclined, and baked into ad networks and exchanges, new patterns of contextual targeting will emerge. One imminent pattern is micro-segmenting, wherein brand and performance campaign managers try to optimize their campaign’s goals by slicing-and-dicing the inventory very finely. When that happens, a few hundred categories are not going to be enough; it’s likely that a few tens of thousands will be required. Publishers too will demand much more nuanced categorization of their own pages in order to increase revenue. A precedent for this pattern is the segmentation within the inventory of Yellow Pages.

A second pattern is an increasing sophistication in targeting. Clearly, placing in-context ads increases click-through, and hence revenue. However, in-context placement is a mere way-station in the path to a bigger and better strategy for ad placement, namely, exploiting the structure of the taxonomy itself in order to improve placement, hence clickthroughs, hence revenue. For example, placing an ad about photography on a page about photography is relevant for sure, but may not maximize revenue. However, placing an ad about cameras on the same page will likely increase revenue. In fact, that ad about photography may do better on a page that lists cameras, than yet another ad about cameras!

The bottom line is that the market is trending towards fine-grained categorization, because doing so increase revenue in two ways: one, increasing the worth of the inventory, and two, increasing user engagement.

]]>