Wednesday, December 17, 2008

Blog Monetization – Contextual Advertising

Article Series: Blog Monetization

In this article, we will be looking at one of the most popular forms of web advertising, contextual advertising. Contextual Advertising refers to the mechanism of displaying advertisements relevant to the content of a web page currently viewed by a visitor. This is done via automated systems that scan the page content looking for advertising keywords and then display relevant ads for those keywords.

The contextual ads come in two main types; on-page ads such as Google AdSense or pop-up ads such as Vibrant Media. The payments are either based on the number of clicks (Cost per Click – CPC) or the number of types the ad is displayed (i.e. impressions) (Cost per Impression – CPM).

The two terms CPC and CPM are named from the point of view of the advertiser and not that of the publisher of the ad. For example, each time a visitor clicks on a contextual ad, the corresponding advertiser has to pay some amount to the ad network. That is the cost the advertiser has to pay the ad network for that click. The ad network pays a portion of that cost to the publishers.

Here’s a (non-exhaustive) list of currently available contextual advertising schemes