Defining relevance

Relevance is a crucial factor in online advertising. Relevant ads stand a better chance of being clicked than random ads. The ads you see in your Gmail sidebar, for example, are not random. Google analyzes the message you are composing or reading, and displays ads that match the content. Consequently, the likelihood that you click an ad that has something in common with the email message is fairly high.

But how do you define relevance?

The relevance of an ad ultimately depends on the context where it appears. An ad's context is typically the text and images that surround it on the website. But the context can also cover the user.

In linguistics, a quality known as readability defines how easy a given piece of text is to understand. To make text easier to comprehend you can:
  • Keep complex words to a minimum
  • Simplify sentence structures
  • Avoid obscure literary devices
The problem with such measures is that they are not user specific. Readability can tell you whether People magazine is easier to read than the New York Times, but it cannot tell you how easy it is for a particular reader to understand. The magazine is not customized for you or me. It is aimed at a generic readership population, an approximation of the intended audience.

The same problem applies to advertising. If you want to measure the desirability of an ad, it helps to know the reader's preferences, past purchase behavior, familiarity with the subject, and motivation.

This is why Gmail appears to be the most advanced application of AdSense to date. It extends the context of an ad to cover the user. The email message that I am reading or composing is a good indicator of my personal preferences. I am likely to write about something that is relevant to me.

Update 2007-10-08:
Erick Schonfeld analyzes Gphone rumors on Techcrunch. Same relevance principle as above, this time pairing AdSense with the phone.
To the extent that such marketing messages can be targeted based on location or what the consumer is trying to achieve at that particular moment, the greater likelihood that those ads will be clicked on. So if I am looking at restaurant reviews on my Gphone, I might not mind seeing coupon offers for nearby restaurants, but a mortgage ad would be annoying. The individual developers have the best chance of making such ads a seamless part of the overall mobile experience rather than a distraction.