Google Tests Cost-Per-Impression Pricing and Targeting for AdWords
Hot off the press: Google will announce today a limited beta feature for AdWords that will allow advertisers to target their ads to thousands of specific content sites across the Google Network.

The new limited roll-out will see Google testing new ground in two important areas. First, Google will test a CPM (cost-per-impression) bidding model for AdWords ads. Second, for the first time, AdWords advertisers will be able to select which specific web sites their ads are displayed on, something that advertisers have been crying-out for.

The new CPM bidding model will also accept animated image ads, in addition to the existing text and static image ad formats. By increasing competition for ad space on specific sites, Google is hoping that people who visit those sites will get more useful, more diverse, and more relevant ads.

So what is Google rolling-out in this beta test?

* Targeting:

Advertisers will now be able to select specific content sites across the Google network where they would like their ads shown. Advertisers can target these sites easily by either entering the specific URL of a website or enter keywords to search for sites, in its network, that match those keywords. Enabling advertisers to target a specific ad to a specific site creates another way - in addition to keyword-based targeting - of letting AdWords advertisers connect with people who are likely to be interested in their product or service. So will all AdSense partners automatically show these new CPM ads? Google's Barry Schnitt tells us, "AdSense partners, with the excetption of sites with which we have individual contracts, are opted-in."

* Bidding:

With site targeting, advertisers will set a maximum CPM, that is, the maximum price they're willing to pay for every thousand impressions their ad receives on a particular site. Schnitt explains, "The placement is calculated by CPM. That CPM is then entered into the auction with the other text-based keyword ads. The CPM then competes against [traditional AdWords ads] CTR x CPC"

Google's approach is different from other CPM models, where advertisers must pay a fixed CPM. On AdWords, advertisers pay no more than the minimum price needed to run an ad on a site. It's worth noting that you won't be able to use a CPM model on Google's own search results page, only their network of partners.

* Ad Formats:

In addition to text-based ads, Google's site targeting will include another ad format option, animated image ads. This is an enhancement to the image ads option they launched last year.

Google's site targeting feature is available as a limited beta, and they're not revealing who has been selected or what the criteria for selction was. As with past Google betas they plan on gathering feedback and enhancing the features. Once they've received enough feedback, Google plans to roll out the service to a wider audience of advertisers in the coming weeks.
Andy Beal | permalink | +marktd |