• by Tameka Kee , November 9, 2007

Google has expanded the AdWords site targeting feature, giving advertisers the option to target specific subsections within sites, and buy ads on a cost-per-click (CPC) basis.

Called 'placement targeting,' the feature is geared toward providing greater control over where ads appear within Google's content network, giving AdWords more viability as a branding tool.

Placement targeting has evolved since its launch (as site targeting) in 2005, when it allowed advertisers to pick specific sites or topics to run their text and image ads against. Now, AdWords users can target individual sections of sites, such as the college basketball pages of a sports site or a chosen celebrity on a gossip site, in addition to the demographic targeting added in 2006. Users can purchase the ads on both a CPC and the original cost-per-impression (CPM) basis.

According to Drew Sharma, CEO, Mindfire Interactive, crafting CPM-priced, placement-targeted campaigns moves AdWords "more toward branding," as ads are not focused on keyword or contextual cues, and Google also offers images, and click-to-play video formats, in addition to text.

But Sharma adds that the initial CPM-only pricing caused friction between traditional search marketers and publishers. "Some search marketers weren't aware of what was a realistic bid, and the sites weren't accepting CPM ads because the bids were so low," Sharma says.

In fact, demand for alternative pricing was noted on Google's official Inside AdWords blog: "CPC bidding for placement targeting was one of the most common advertiser requests we received for Google content network campaigns."

According to a Google spokesperson, advertisers seeking to "maximize impressions and increase brand awareness among a target audience" should continue to use the CPM feature, while those with "conversion-oriented campaigns can track direct response metrics like sales, leads, registrations or sign ups, and pay when users click on their ads."

"CPM is so old school, and I really feel that CPC is the only way to go for the majority of our clients," said George Morris, co-founder and client services director, Imulus. "Now that we have this option we can better determine the ROI delivered by various sites; plus we still have the ability to control on which sites our ads are displayed."

The control feature of placement-targeted ads is key, especially as Google seeks to keep recruiting more advertisers into its content network. Recent third-party analysis of both Google's and Yahoo's publisher networks revealed click fraud levels as high as 28% (via Click Forensics), "and with larger advertisers running huge campaigns on a monthly basis, there's a need for quality traffic," Sharma says. "If we see a high volume of clicks with no conversions coming from sites x, y and z, then we need to know how to exclude them."

If Wednesday's placement-targeting announcement gets big brand advertisers to sign up for AdWords in droves, then it may offset the financial hit Google took on Thursday. The search giant's stock tumbled by $46.41 (or 6.4%) after Federal Reserve Chairman Ben Bernanke warned of a business slowdown. Other companies in the tech sector, like HP, Apple and IBM, also saw their shares trade downward.