Can AOL Maintain High CTR’s on Sponsored Listings Near Search Results?

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In a recent article subtitled “Married to an Elephant“, I wrote that Google’s advertiser editorial policies are in large part driven by the new partnership Google has with AOL. After writing this, and advising advertisers to be patient and work around (or through, if necessary) the rules, another thought occurred to me. The many editorial rules may be more than just an attempt to put in place a general regime of quality control. There might be an element of trickery involved on AOL’s part.

Let’s go through the logic. Why did banners stop getting clicked on? Mainly because Internet users learned to mentally block them out, since they were obviously an intrusion. It’s pretty hard to entice people with something they don’t “see,” let alone “look at.” And why do people continue to click on search engine results? Well duh, it’s because this is material they were actually searching for. Search engines and portals made another discovery: people will sometimes willingly click on relevant paid results that come up in response to the user’s search engine query. But arguably, whether people click or not may depend on where these sponsored results are located. AOL leaves nothing to chance. They put the sponsored results in the top three positions.

To make Ralph Nader and purists happy, search engines and portals have made a point of “clearly demarcating” where the sponsored results are, and where the raw search results are, on the page. But how clear is clear? How does the average AOL user look at a page? “Quickly” might be one answer. “Without knowing very much about what got onto the page, and why,” might be another.

My point, then, is that AOL is making money, and lots of it, from all these clicks on the sponsored results above the search results. But the fear all around the industry must certainly be: what if consumers begin to adjust their behavior to respond to the fact that these are ads, as they did with banners? If they click only on those raw search engine results, the search engine is no longer the cash cow that it might have been.

It’s worth considering that many of the highly detailed editorial policies now being enforced for Google advertisers (whose ads now appear on AOL) are just the types of policies you’d enforce on advertisements that you did not want to *look like* advertisements. Enticing copy that tries to sell the user something can definitely *look different* from the page titles and descriptions that appear in the raw search results. Users are probably more likely to click on sponsored search results the less they differ, on the whole, from the raw search results. To put it as bluntly as possible, Google and AOL may well be happier if your ad title and copy are de facto “ads cleverly disguised as actual search results.” They’ll never admit this, and they, and you, may scoff at my grassy-knoll approach to understanding the editorial policy. But think about it and tell me if it doesn’t make sense. Newspapers run entire sections full of “articles” about cars and new homes – “articles” which are actually paid advertorial content. Yet we read those “articles” to some extent as if they were genuinely independent, journalistic reviews. It’s as if we as consumers are content to play their game if they are willing to hold up their end of the bargain and put on a good show of providing semi-hard journalism. It’s not so crazy to suggest that the motivation is the same in the AOL Search implementation of Google AdWords Select sponsored results, then, is it? They want to serve up quote-unquote “search results” just above the actual search results. Their studies no doubt show that users will click and buy more readily from a search result than an obviously sponsored listing. Making the sponsored listings “seem more like” search results – by forbidding advertisers from using enticing copy that stands out in a crowd – is a way to gloss over the distinction between the two in the end user’s mind.

AOL and Google are going to try to quietly imply to their advertisers that this type of standard-setting on advertisers benefits all by enacting a level playing field for advertisers, etc. They probably *won’t* tell you what they are really thinking: if advertisers just play ball, consumers will click on their ads because, in their minds, the ads are close enough in format to something they trust: the actual search results. Time will tell if these standards are enough to maintain decent clickthrough rates in this latest darling of targeted Internet advertising media.

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