CSE-91-Advertising by konganapuram


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									Timothy Gramm

Professor Paturi

CSE 91

March 10, 2007

                          Advertising on the Internet

        We are going to look at three companies that have changed the way advertising is
done on the internet. Vibrant Media, which came up with IntelliTXT, revolutionized the
idea of linking advertisements with certain words on a web page. Google came up with
AdWords for companies to advertise on Google and its associates, and AdSense for
publishers to receive advertisements from Google. Yahoo! recently developed the
Yahoo! Publisher Network, which is similar to Google’s AdSense, but hopefully will
have a slightly different business model than AdSense.

What is AD 2.0?
         AD 2.0 is a more efficient and beneficial system to advertise across the Internet.
Internet advertisements usually were distracting pop-ups and email spam and had nothing
in relation to what you were browsing, but with these newer technologies and businesses,
advertisements have become more targeted with less annoyance to those that browse the

Vibrant Media IntelliTXT

        Vibrant Media was founded by Doug Stevenson and Craig Gooding in July 2000.
(1) In 2003, Vibrant Media was able to release IntelliTXT, currently the world’s top
leading in-text advertising mechanism that now manages about four billion words every
month for leading companies, such as Microsoft, Sony, and Intel (1,2). Also, these
advertisements reach over 70 million unique users in ten different languages across 1,500
different web sites. Stevenson and Gooding started out this company with only $500,000
and has experienced rapid growth over the years, so much that it was 63 rd place in Fastest
Growing Companies by Inc. 500. (1)
What makes IntelliTXT unique?
        According to Stevenson, “the heart of advertising is relevancy”. By providing
relevant information within an article, its effectiveness is more powerful for both the user
and the advertisers. Plus, the in-text advertisement is only activated when the user
expresses interest (i.e. when the user hovers over the double-lined word). (3) In June
2006, Vibrant Media has incorporated video clips into IntelliTXT, creating IntelliTXT
VIDEO. Now, when a user finds interest in a certain word on a web page, it will also
contain a small video player that the user can play in addition to advertisement details.
Such a setup allows the relevancy of in-text advertising to combine with the powerful and
captivating effects that visual advertising offers. (2)

IntelliTXT’s Business Model
       The business model of IntelliTXT (and Visual Media) is fairly straightforward.
The advertisers pay Visual Media to link their advertisements with key words, and Visual
Media shares this profit with the publishers that display these in-text advertisements on
their web sites.

Problems with IntelliTXT
        Ever since IntelliTXT had been developed, there have been concerns of violating
the editorial integrity of the page that the advertisements are placed in. The
advertisements indeed have a potential of making offers that are out of context of the
topic of the page. (3) Also, although this form of advertising is less distracting, there are
users who are concerned about this advertising method, since it closely resembles certain
malicious adware that had been developed in the past. A web search of the word
“IntelliTXT” brings up several web sites giving details of how to block advertisements
from IntelliTXT.

        To solve these issues, it would definitely help to get users and editors comfortable
with this form of advertising. An explanation of what the green links are and how the
advertising works would definitely ease the user’s mind from thinking adware had been
installed on their system. For editors, it would be best to set up the advertisements to
where they would most likely not be taken out of context. (3) Because these problems
could never be fully fixed immediately, the only thing one could do is facilitate the
transition to a new type of advertising.
Google AdSense

       Google was originally developed by Larry Page and Sergey Brin, and officially
became a functioning business in September 1999. In addition to being an efficient
search engine, in 2000 Google released AdWords, which allowed advertisers to produce
relevant advertisements on Google based on what the user searched for. Then, in 2003,
Google created AdSense, which publishers could set up on their web sites and would
show relevant advertisements from Google’s database based on relevant content of the
web page. (4)

What Makes AdSense Unique?
       AdSense is easy for publishers to set up, and applicants are not limited to
moderately trafficked sites (IntelliTXT requires at least 500,000 page views per month to
be considered). The ads are displayed automatically from Google’s advertiser base and
contain advertisements relevant to the information displayed on the web page, which is
obtained by Mediabot, a crawler that Google uses to obtain information for AdSense. (5)
With such simplicity, this allows small to medium sized businesses to earn a decent
income through advertising.

AdSense’s Business Model
        The business model acts much like that of IntelliTXT, in that Google receives the
money from it’s advertisers, who only pay for their advertisements that get clicked on
(Cost Per Click advertising). Then, Google shares this revenue with its publishers. The
actual amount is undisclosed, even to the publishers (6).

Problems With AdSense
        A serious problem at the moment with this advertising is click fraud, in which
certain individuals or groups purposely mass click a certain business’s ads in order to
drive up their cost. Another problem is Google’s allowance of abusing trademark names.
Because Google allows advertisers to bid on key names, some businesses will bid for key
words that rival businesses would use. (5)
        For click fraud, it’s been suggested that publishers can implement a click tracking
program to find out if they’ve been a victim of click fraud. This won’t get rid of click
fraud entirely, and probably nothing will, but it’s at least a step in the right direction. The
abuse of trademark names may be restricted if Google is able to reserve certain obvious
keywords from being used. Again, it wouldn’t be able to prevent the abuse entirely, but
it’d be something.

Yahoo Publisher Network

       Yahoo was founded by David Filo and Jerry Yang around April 1995, which
began as a huge list of useful web sites. (7) Mainly used as a search engine, over time it
acquired many other community-based aspects. Recently, the company released Yahoo
Publisher Network, which is contextual ad based; similar to Google’s AdSense. (6)

What Makes Yahoo Publisher Network Unique?
        At the moment there is not much that makes it unique, as it is still in beta, but
currently it has potential to be unique. With the right ideas, Yahoo Publisher Network
could surpass the business that AdSense receives, since at the moment AdSense holds a
monopoly over small time publishers. (6)

Yahoo Publisher Network’s Business Model
       Yahoo Publisher Network’s Business Model would be strikingly similar to
Google’s AdSense; receive the income from the advertisers, and split the cash with the
publishers that host the advertisements.

Problems with Yahoo Publisher Network
       The first problem is that the system is still in beta. It can take a while before the
whole thing gets fully developed, and then that’s where the second problem comes in.
How will they get the publishers to switch from AdSense? It would require replacing the
AdSense code in their web pages to Yahoo code. For some this could be easy, for others
they needed help to put the AdSense code into the page in the first place. Nevertheless,
an incentive will be needed for publishers to make the switch. (6)

        There are several things Yahoo can do to surpass the capabilities of Google’s
AdSense. The best option is to beat Google’s pricing and transparency. As stated earlier,
Google does not disclose its shared revenue percentage with its publishers; they simply
send a check in the mail. If Yahoo sent a better percentage to its publishers and also
disclosed the shared revenue percentage, it just might be enough incentive for many
publishers to switch to Yahoo. (6)
                                  Works Cited

1)   http://www.vibrantmedia.com/about_vibrant/management_team.asp
2)   http://www.sys-con.com/read/234094.htm
3)   http://www.imediaconnection.com/content/3184.asp
4)   http://www.google.com/corporate/history.html
5)   http://en.wikipedia.org/wiki/AdSense
6)   http://www.techcrunch.com/2007/02/25/yahoo-publisher-networks-trojan-horse/
7)   http://yhoo.client.shareholder.com/press/history.cfm

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