Lycos unveils ad platform with keyword auction

In a fickle online ad market, it pays to cater to customers. That's the thinking of Terra Lycos SA, at least, which launched a new advertising platform Monday that allows customers to plan and manage the promotion of their Web sites using auction-based keyword marketing and paid inclusion services.

Lycos InSite AdBuyer is the newest effort by the Barcelona-based Internet group to shore up ad revenues by offering marketers a variety of means to promote their sites through Lycos search results. In February, the company launched a paid inclusion service, in which companies can pay to have their Web sites included in relevant search results, and a hosted site search service. The new offering allows customers to buy and manage both paid inclusion and keyword advertising through an integrated "marketing dashboard."

The new system also marks the first time that Lycos has offered keyword marketing services.

Using AdBuyer, advertisers can select keywords related to their company product or service, and then bid on them. Pricing is discriminate and charged on a cost-per-click basis. Advertisers can then track traffic rates and adjust their marketing campaigns through AdBuyer.

"The 'marketing dashboard' allows advertisers to get at the millions of Lycos users through a one-stop shop," said Tom Wilde general manager of search services for Terra Lycos.

The advertising platform requires a minimum opening account balance of US$100 and keyword bidding starts at US$0.05 per click, per keyword, the company said. Advertisers set a budget for their account and Lycos debits it on a cost-per-click basis.

The keyword advertising platform is powered by FindWhat.com Inc., which uses a proprietary technology where advertisements are purchased using an open bidding system.

Although Lycos' keyword bidding platform will not be in full swing until later this month, when the system has a critical mass of users, FindWhat Executive Vice President Dave Rae said that his company has seen the system create a level playing field for large and small advertisers.

"We've see a very broad range of customers participating," Rae said. "There are few marketing options where small companies are served as well as large companies."

Lycos is also planning to have each keyword entered into its system reviewed by Lycos editors to ensure relevancy.

"Ad relevancy is the number-one predictor of campaign performance," Wilde said.

Although keyword advertising guarantees search result rankings, paid inclusion listings appear in results based on relevancy, he said.

"The utmost requirement is to protect the user experience and if you ruin the user experience you have no users and no business model at all," he said.

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