Thalasar Ventures

You might have noticed that I have been running contextual ads for the last week or so. It was my experiment to see how they generated revenue. Here are the results.

The specific type of contextual ads I tested are ads that create hyperlinks to keywords in your post or article. Quite a few bloggers use them and I thought I would give it a try to see how it converted. After a week of running it, I have come to several conclusions.
Contextual Ads distract from your message
Despite the fact that a number of bloggers use them (John Chow and Matt Coddington) for example . I find them pretty intrusive and for the most part they don’t add a lot of value.They tend to highlight the higher value keywords.
Conversion and earnings are pretty poor
Since this is such a low value click for the advertiser, the amounts aren’t bid up that high. While if you have a high traffic blog that covers high value keywords, it might be higher but it still wouldn’t be worth it because of the point below.
Click attention and affiliate links
Another problem with the contextual ads is they compete for click attention with your own affiliate and other outgoing links. This has the net effect of de-valuing your outgoing links in the eyes of your reader. This is the real problem with the ads. When I do a post, I often include links to important sites and sometimes even affiliate programs where I might earn a commission. When I do, you can be fairly certain I think the product is worth it and more importantly, I will generate more income with an affiliate reference. So why have a low value click (where you literally earn pennies) compete with a higher value click (where you might earn dollars)?
Contextual Links are Butt Ugly
Visually they add nothing to the site and while they do generate some revenue, it hardly seems worth the visual eyesore they create on the site. Sure you can minimize the appearance by futzing around with it but why bother since it’s usually for such low dollar amounts?
Many of the links simply aren’t relevant
Many of the links are people bidding on long tail keywords, hoping to arbitrage the traffic to higher paying advertisers. As a result they simply aren’t particularly relevant to your readers. When you hover over them, it’s apparent that is what is happening and it doesn’t encourage a click. In fact it adds to link distrust. The funny thing is these ads were supposed to have the opposite effect – because they are in the context of the article, they are supposed to be more engaging. But nothing is less engaging than an ad asking me to search for “keyword” at search engine X.
After my little experiment with them, I will be pulling them off the site. I wouldn’t recommend bloggers use them to monetize their traffic. You are far better off with appropriate reviews and affiliate programs than you are with inline contextual ads.
Contextual Ads Providers

• Miva – a second tier search provider also has a contextual product. It’s what I used in my test.
• Kontera is what John Chow and Matt Coddington use
• Intellitxt – an early player in the marketplace
• Adbolt – newer player, their homepage doesn’t PR yet.
• Quigo – one of the original players in the market.

If I have missed anyone, please let me know. I will add them to the post. As I said before I don’t believe these bring much revenue or value to your readers. Please let me know how you fare with them.