In this segment, Russ talks about the various players in the online ad network space. He classifies Google AdSense as a Direct Response Ad Network, while Yahoo is a bit more of a brand advertising play.
SM: From your point of view, having been in the online advertising / ad network business since the beginning of the industry, longer than most people, how do you see the strength of the following players? Let’s start with Yahoo Publisher Network. RF: Of all of the competitors in the space, I can personally speak the least intelligently about them. Although it has not been as big of a success as Google, they have definitely been a success. To me it seems that they have gone after a higher brand strategy, a smaller number of larger sites. However, I don’t know if that is really true or not.
SM: What about Google AdSense? RF: I don’t have anything bad to say about Google AdSense, it is clearly the killer application for pure direct response ad networks. That is not to say that you cannot do other things with it, but it is clearly the dominant player in the market when it comes to text response … in fact, when you are talking about direct response, I am not sure the type of inventory matters, but they are clearly the killer today because of great technology and liquidity – the sheer number of advertisers.
SM: I will tell you that it works very poorly for the user generated content publishing business. RF: I think other people will have more informed perspectives. However, when you look at it from a macro perspective, while it may not be the perfect solution for everyone, Google makes it very difficult to compete with them based on their breadth of customers and users.
SM: True. But as you say, their value proposition is much more akin to Direct Response Advertising with a definite Call to Action. The measurability of “clicks” or “filling out a form” or “playing a game on the landing page” that are triggered on text search matches, is the “Direct Response” advertising mode. It’s a very effective use of ad dollars!