New Study from CONTEXTWEB Finds Advertisers Are Missing Opportunities by Ignoring the Power of the Long-Tail Internet.

Study indicates they are overspending on more expensive short tail

NEW YORK -- A new study and white paper from CONTEXTWEB Inc., http://www.contextweb.com, a leading provider of integrated digital media services, reports that advertisers are missing a vast, largely untapped opportunity for digital media performance by focusing on the relatively small number of hugely popular short-tail Internet sites to the exclusion of the long tail - the millions of smaller sites with niche audiences of enthusiasts.

The study, based on an analysis of digital media performance across more than 18,000 publisher sites and 1,000 campaigns from Q3 to Q4 2010, concludes that long-tail advertising represents a simple, cost-effective way to gain online reach, increase click-through rates and ultimately boost sales at a significant discount to top web destinations featuring premium content.

Overall, CONTEXTWEB found the average click-through rate for long-tail advertising during the period was 24% higher than for short-tail advertising. All 20 advertiser verticals in the study experienced click-through rate gains, with the top category seeing a 50% increase.

Yet according to the CONTEXTWEB study, digital marketers continue to overspend on the more costly short-tail without getting a significant boost in click-through rates to justify the outlay. A couple of telling statistics from comScore cited by CONTEXTWEB: while 70% of reportable display spending goes to short-tail websites1, Internet users age 18 and over spend just 14% of their time online there2.

"While long-tail advertising is often overlooked by digital marketers in favor of premium sites with massive traffic, this can prove to be a costly mistake," said Rose Ann Haran, Chief Marketing Officer of CONTEXTWEB. "The comScore statistic cited above demonstrates a serious disconnect between where the majority of consumers are online and where marketers are placing their large digital bets. By contrast, the long tail provides significant value to advertisers, allowing them to realize discounted CPM rates without sacrificing their ability to reach those most likely to buy their products and services."

Some other key findings detailed in the paper:

* All advertiser verticals saw increased click-through rates in the long tail as compared to the short tail. Advertisers in the alcohol segment saw the greatest lift, at 50%. The lowest long-tail lift was 12% for auto advertisers.

* 76% of all content categories saw increased click-through rates on long-tail sites, with the top three categories seeing a lift of 50% or better.

* While 24% of content categories experienced a lift in click-through rates in the short tail, ranging from 5% to 35%, these gains are often offset by the price premium paid.

* Long-tail advertising provided significant unduplicated reach compared to the short tail. In other words, advertisers can reach the same type of audience with the same demographics as that of the short tail, at a lower cost. CONTEXTWEB found select unduplicated reach to be at least 78% on the long tail across 18 content categories, with "education" the highest at 98%.

To download a copy of the white paper, click here.

Report methodology: Using advertising campaign data from Q3 to Q4 of 2010, CONTEXTWEB analyzed performance across more than 18,000 publisher sites and 1,000 campaigns. The study was conducted using page-level contextualization and a brand-safe environment in both the long tail and short tail. CONTEXTWEB focused on three key metrics: CTR, cost efficiency and unduplicated reach. While CTR alone is not comprehensive measures of campaign performance, CONTEXTWEB found it to be a solid indicator when calculated in conjunction with cost and reach for most advertising verticals and publishing categories advertising on the long-tail Internet.

In order to benchmark the performance of ads on short-tail and long-tail domains, each site was classified according to its total Internet reach. Classification was based on the proxy of the comScore 250, a categorization of the top 250 ad-supported web domains, per comScore's May 2010 Key Measures Report.

About CONTEXTWEB

CONTEXTWEB is a leading integrated digital media services company that delivers consistent, measurable online ad performance on hundreds of millions of real-time impressions every day. CONTEXTWEB layers online and offline audience data with highly relevant content to deliver unique audiences at scale. Its proprietary page-level contextual technology delivers brand-safe environments and ranks among the top 20 ad-supported properties, according to comScore. CONTEXTWEB counts among its clients Fortune 500 companies in pharmaceuticals, automotive and consumer goods, among others. Investors in CONTEXTWEB include leading venture capital firms Draper Fisher Jurvetson ("DFJ"), DFJ Gotham Ventures, DFJ New England, Updata Partners and Investor Growth Capital. CONTEXTWEB is headquartered in New York with offices across the country and in the UK. For more information, please visit: contextweb.com; follow us on Twitter @contextweb.

1 Source: comScore Ad Metrix, May, 2010; note: short tail as defined by CONTEXTWEB methodology

2 Source: comScore Key Measures, May, 2010; note: the rest of the time spent online is not limited to mid- and long-tail media, and also includes search, email, social media, etc.