When navigating the Internet, the most consistent ad units published across the web are powered by Adsense. And while these units used to be filled with text links, Google started letting advertisers use images via the Adsense channel a few years back. Now Google ads are comprised of more than simple text. With Google also owning DoubleClick, you can expect to continue to see more images, rich media, and videos ads implemented directly into Google Adsense ads.
There has been a burgeoning trend in regards to Adsense advertisers over the past 2 months. It seems that the Adsense channel is being taken over by Groupon. Every day, I continue to see tons of Groupon text and image ads on large content sites and within my Gmail email; and these ads are being served through Adsense.
There are several logical reasons for why Groupon is an Adsense advertiser who has the ability to dominate the channel. A primary reason surrounds GEO-targeting. Google allows its advertisers to target ads to a particular geography, so, when you are in Chicago, Groupon can target ads promoting the best daily deals inside of Chicago. When web surfers in Chicago see a highly targeted ad mentioning Chicago deals, it drastically boosts the click through rate of the ads. And, expected click rate is a major factor for Adsense when determining which advertiser to display to a given user.
A second reason for Groupon’s domination surrounds its catchy offerings. A lot of the ads which show up on Adsense aren’t compelling or relevant enough to get clicked on. However, a lot of Internet users utilise the web to thrift shop — and the Groupon ads highlighting daily deals can be very enticing for the user. So, this intrigue for users helps Groupon to further boost its click rates on Adsense.
A third reason Groupon can buy up Adsense inventory is due to its effective business model focused on commerce. Whenever there are transactions taking place, it is easier for the advertiser to figure out and optimise ads based on ROI. A social network such as Twitter or Facebook, or a content site such as ESPN.com or CNN, will have limits in regards to their CPC on Adsense because commerce isn’t taking place on thier site. But Groupon, with its daily transactions, has the power to earn a lot per user, and they can track their ads to understand exactly how much they make from each user. Thus, giving it the power to buy up targeted high CPC Adsense inventory across major US cities.
Groupon’s financial situation is yet another reason why the company can buy up Adsense inventory. In April, Groupon Raised $135 million from Facebook backer Digital Sky Technologies. This capital enabled Groupon to have the ability to invest in the type of marketing dollars you need to dominate the Adsense channel.
All of this of course is good news for Publishers, as the more success and competition in the Adsense channel ends up making web publishers more money. In March of this year, Living Social, which is a competitor to Groupon, raised $25 million. Countless other deal based websites and networks are sprouting up. This will both make it more difficult for Groupon to dominate the channel and it will also end up increasing the monthly Adsense checks for many web publishers.
Evan Britton founded Sency in 2009. The goal of Sency is to bring real time content, links, and tools, to internet users in an organised and simple fashion.
Business Insider Emails & Alerts
Site highlights each day to your inbox.