Seth Godin (a WebX.0 favorite!) responds to the NY Times piece on Quigo today with all fair points:
If you’re running a pay per click ad designed to support a cost-per-acquisition strategy, (Google AdWords, et.al.) then does it matter where your ad runs?
Remember, the point of the ad is to get someone to click (that’s what you’re charged for… the click) and then the goal of the site is to convert that click into permission and eventually a customer.
So, does it matter where the ad runs if it works?
From the marketer’s perspective, I agree 100% with Seth on this point – if (and that’s a huge IF… [1]) the campaign works, and the ROI is good, it’s insignificant where the traffic came from. But while advertisers may not care where they get their clicks from
them, they certainly do adjust their bids to account for the mix of
high-quality clicks and spam/fraud/foreign/etc clicks.
What happens in essence, is that the premium publishers in this mix are
getting lower bids than they should have, while the low quality traffic
sites get higher bids than they would have had they sold to advertisers directly [2].
Now, while Quigo caters to both marketers and publishers, we view our platform primarily as a publisher solution. We offer it as a private label to publishers, and let them acquire and manage their advertisers through it. It’s the publishers who we see benefiting most from the AdSonar solution, with marketers benefiting as a result of our insistence on catering only to the highest quality publishers in the country.
The TV network example is not applicable to our space… Unlike any advertising medium in the past, we don’t (nor do our publishers) determine the pricing of the media sold. That is determined by the marketers, and therefore it generally reflects the value the marketers get from the media they’re bidding for. The fact of the matter is, that marketers are willing to bid higher for a site with quality, US-based, non-fraudulent, non-spam, non-accidental-traffic traffic than they are willing to bid for that same site combined with 100,000 other lesser quality sites.
And that, publishers really care about.
[1] The Big Co‘s mix into their traffic a bunch of awful sources (misspelled domain names, spam blogs, etc, etc). They can get away with this to some extent because the junk traffic is mixed and diluted with the quality traffic on their network and search destinations…
[2] Google’s SmartPricing does mitigate this issue a little, but it certainly does not come close to solving this issue. When junk sites are part of the mix, and they’re getting paid something, someone is bearing that cost and that’s the marketers…
thanks for the thoughts. Remember, I wasn’t dissing Quigo. I was amazed at the chutzpah of the media buyers…
I understand… 😉
It’s just that the publisher and advertiser considerations, around the same transaction, are completely different… and that distinction was important to make to better understand what Quigo is all about.
Keep up the great blog… I love it.
Who’s afraid of Quigo?
According to this New York Times article, both Yahoo! and Google should be worried about this New York-based ad services upstart that’s positioning itself as an alternative to the online giants. The article says, Here is how this contextual advertising
Interesting post, Yaron. And I like the shot on the boat, too!
John