• by Gavin O'Malley  @mp_gavin, May 3, 2005

As expected, online ad network Fastclick Monday began offering contextually relevant text ads--similar to Google's AdSense--to its publishing and advertising clients.

"This format provides publishers and advertisers with the flexibility they need to increase their revenue from previously under-utilized inventory," John Ellis, vice president of marketing and product management at Fastclick, said. "Text ads provide our advertisers with yet another opportunity to maximize campaign performance through Fastclick's optimization."

As Google and Yahoo! position themselves as ad networks, stand-alones like Fastclick and ValueClick are seeking revenue alternatives such as placing text ads relevant to a particular page's content.

Shar VanBoskirk, an analyst at Forrester Research, doubted whether Fastclick could challenge goliaths like Google in the space, but said the move was necessary all the same. "If Fastclick didn't expand into search, then all they'd ever be is an ad-network," VanBoskirk said. "What all of these companies are trying to do is create a company that can offer marketers the most complete solution, from keywords to banners."

Fastclick's entry into contextual search advertising and its initial public offering announced last month are directly related, analysts speculated. "Investors are now going to look to Fastclick to make sure they have a full quiver of arrows," said Gary Stein, a Jupiter Research analyst. "It's important that any company can round out all of their capabilities."

Stein, however, was not enthusiastic about Fastclick's pronouncement that its text ads are "customizable," and can be fit easily into publishers' Web sites. "That might have been a great selling point a year ago, but publishers already have a pretty fair degree of control today," Stein said. "Today, success is measured by relevancy algorithms and how many publishers a network has, and they have the latter, but relevancy can only be seen over time."

Ellis tied Fastclick's present and future success to optimization. "We have a strong tech platform, which allows us to optimize our clients' CPA goals," said Ellis.

In the future, Google will have to consider its competition "monolithically," said Stein, figuring that a growing number of ad networks could potentially cut into Google's bottom line.

Forrester's VanBoskirk, on the other hand, predicted that Google will have a clear competitive advantage for some time. "While Fastclick's search marketing is limited to demographics, Google has the ability to target consumers behaviorally and contextually, which gives them a clear edge."