PAY FOR PLACEMENT, PERFORMANCE

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The Financial Express


A conversation with Sundararaman K, head of sales, Google India

How fast is contextual advertising growing on Google?

Online advertising started as an expensive, non-targeted marketing tool. The consumer paid little attention and was in most cases, annoyed. Since then the industry has evolved and is now focusing on delivering superior ‘targeted’ results. Contextual advertising, which is core to Google’s value proposition, works by connecting buyers and sellers in a relevant way and at the exact moment when a consumer is looking for a product or service.

In a global study by Pipar Jaffray in 2004, it was established that from a cost per acquisition point of view, search marketing is four times more effective compared to banner ads. The search marketing industry revenues continue to grow rapidly in India as well as globally ($5.1 billion business according to e-Marketer).

What’s the value proposition that contextual advertising offers vis-a-vis banner ads?

Contextual advertising provides the best targeting. For instance, AdWords is a pay-per-click model where the advertiser pays only when the consumer clicks on an advertisement, while banner ads predominantly operate on the CPM (cost per impression) model. Precise targeting and zero wastage is what contextual advertising is about.

How can it be proved that conversion rate is better with contextual than with banner ads?

Juxtconsult’s 2006 survey of Indian Internet consumers show- ed that next to contests, people respond best to search ads and sponsored links.

In a recent study on internet use for online and offline retail by Media Screen, it was found that 74 percent of the respondents had compared prices of products online before making an offline purchase; while 48 percent had actually bought products online.

It was also found that over 90 percent had used a search (mainly Google) engine. Search engines providing access to online information—such as store locations and contact information, product portfolio, pricing information etc through natural search results as well as paid-for ads—have become an important lead generation tool for e-tailers and offline retailers.
 
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