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Google + Sprinks : Consolidation in Contextual Advertising Market!
October 25, 2003

Google's purchase of Sprinks is yet another very calculated move. A move that could have been very well "predicted" by industry analysts, but still a move that makes contextual ad serving a more consolidated effort by integrating ad serving and keyword bidding platforms (from Applied Semantics + now Sprinks), a solid customer base (PriMedia's and Google's) and Google's search and traffic leveraging capabilities. Earlier we had done an in-depth analysis of contextual advertising market (Quigo and Applied Semantics: Contextual Advertising Market) when Overture inked a deal with Quigo. Our analysis did show Sprinks that with the backing from Primedia, Sprinks was a prime mover in the space.

Key Contextual Advertising Players

Our quick survey done earlier in August 2003, showed that, besides the unique contextual advertising combination sparked off by Quigo's partnership with Overture (Quigo -> Overture -> Yahoo vs. Applied Semantics -> Google), there are other companies that are attempting to offer similar technologies and solutions.

Notably among them are :WebRelevance and Sprinks . WebRelevance offers solutions that it claims to offer similar kind of contextual targeting - similar to ones offered by Quigo and Applied Semantics.

Sprinks' offerings, on the hand hand, are more focused on keyword bidding for advertisers. Sprinks's tools can help advertisers in placing targeted ads on various sites. It is important to note that what makes Sprinks interesting is that it is a part of Primedia - a targeted media company and a leader in niche markets.

Both of these solutions - technologically speaking - come nowhere near to that of Quigo and Applied Semantics's. In the keyword marketing and keyword bidding/keyword-contextualizaiton space, besides Sprinks and WebRelevance there are a number of other players (GoToast, RichLinks, eZula, Connextra, etc.) who offer services-based offerings to this target segment.

Targeted and Local Niche Advertising Market

Now it looks like in terms of monetizing the targeted advertising space, search predictably has become the predominant market. We have already seen the battle-lines being drawn between search and Internet Yellow Pages (Location Based Search and Internet Yellow Pages: The Right Way Ahead) , but we think there is more to niche advertising than local markets. So all these players will eventually have to find paths that create some sustained revenue opportunities for all the players involved. Somehow, just trying to distribute Google Ads everywhere does not seem to be a very long lasting solution, in many cases it could be counter productive.

Conclusion: Contextual Leverage of Content

So the common thread that is running through all this is the ability to generate and leverage content in more contextual manner than that is done by the key players today. Context allows people to browse through various alternatives and gives them an ability to compare and choose. Contextual relevant choices can bring the users back again and again.

Google is winning because it was first to understand contextual advantage of content. Yet, as said earlier the way out is not just partnering with Google.

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