Investor's Business Daily
Highlighted Words In Online Copy Just Newest Type Of Internet Ad
Wednesday November 17, 7:00 pm ET
Doug Tsuruoka

You might have recently stumbled on some green underlined words while reading a Web site article.

Just file that one under the "advertising is everywhere" category.
In this case, they're keyword ads.

If the story dealt with digital music players, the highlighted word might be "iPod." That's Apple Computer's (NasdaqNM:AAPL - News) music player. Then, when you wiggle your mouse over the word iPod, a small box pops up. It tells you to click on the word if you want to know more about iPod.

You click and get whisked to the part of Apple's Web site that deals with iPods.
It's a new type of ad called highlighted keywords, which some say is the next big thing in advertising.

"I definitely think (it) will catch on with consumers, given time," said Rob Wilk, director of search engine marketing for online ad agency Avenue A/Razorfish. "It's also a great way for publishers to monetize content outside of their traditional advertising space."

1-800 Ads Also Gaining
Avenue A, a unit of digital marketing firm aQuantive (NasdaqNM:AQNT - News), is one of the biggest independent buyers and placers of ads for clients.

A slew of new types of online ads are shaking up the field. Other new types of online ads include use of 1-800 phone numbers.

But keywords are prominent among the new ad types.

Two privately held, San Francisco-based firms are helping pioneer the new keyword ads. They are Vibrant Media and eZula.

"Advertisers get incredibly targeted advertising from keywords and that's a very powerful thing," said Vibrant co-founder Craig Gooding.

Keyword, and pay-per-call ads, are popular with advertisers for a reason: They pay only if consumers click on the ad or call the advertiser.

The new ads have energized online ad spending. Research firm Broadview says such revenue will jump 17.5% to $12.8 billion in 2007 from $5.7 billion in 2003 in the U.S.

"What makes Internet marketing really cool is there's a lot of new stuff coming out, and keyword ads are one example," said Greg Stuart, who heads the Interactive Advertising Bureau in New York.

Vibrant sells the technology that makes keyword ads possible under the name IntelliTXT. It consists mainly of software that creates links in Web site content and delivers ads or takes consumers to Web sites when the links are clicked.

Vibrant also runs a database that tracks the advertisers that are paying to highlight their keywords on various content sites. The database ensures that product names are matched with advertiser Web sites. The database is hooked to Web publishers that are highlighting keywords in their content.

Gooding says Vibrant developed keyword ads in 2001 and spent 18 months honing the technology that supports them. He says some 250 Web publishers use Vibrant keyword ads on their sites. They include the sites of Forbes, Popular Mechanics and Hearst Publishing.

The growing number of advertisers using Vibrant's keyword ads include IBM (NYSE:IBM - News), Microsoft (NasdaqNM:MSFT - News) and Hewlett-Packard (NYSE:HPQ - News). Gooding says more than 20,000 other advertisers can use the firm's keyword ads through a partnership with Yahoo's (NasdaqNM:YHOO - News) search engine marketing unit, Overture Services.

Gooding, a former AOL Europe executive who co-founded Vibrant in 2000, says Vibrant will do about $25 million in revenue this year, up from first-year sales of $200,000.

The principle behind Vibrant's highlighted keywords is simple.
Advertisers -- carmakers are a good example -- have their products linked to a keyword that appears in printed content on a publisher's Web page.

Lifestyles, Tech Popular
Articles focusing on consumer products, lifestyles or technology are popular places for keyword ads.

The money advertisers pay for such clicks is split between the content Web site's publisher and Vibrant.

"If there's a click for Apple Computer, Apple would pay us a fee for that response, say a dollar, and that dollar would be split with one of our publishing partners," Gooding said.

Gooding says the software behind Vibrant's keyword ads can tell the difference between words that can have more than one meaning. Apache, the open-source server software, has been a highlighted keyword. Gooding notes that the word also can stand for an Indian tribe or a helicopter gunship.

He says Vibrant's software makes sure only references to correct products are highlighted and that consumers are taken to the right advertiser Web site if they click on an ad.

Wilk said keyword ads will be a big hit "once consumers get used to the idea of clicking on a word in a text article." He says keyword ads will be a godsend for media firms battered by a recent ad recession. Said Wilk, "Keyword ads mean a new revenue stream for publishers."

Contact:
Erica Pereira
Eastwick Communications for Vibrant Media
650-480-4014
erica@eastwick.com