There are two primary ways to make advertising revenue on the internet – display advertising and search. For our browser themes, search is a natural to include, so it should come as no surprise that Brand Thunder is announcing its relationship with Yahoo! Search, a premier provider in this space (view the press release here). But the question you may ask is “why is search the dominant advertising vehicle for internet applications like browser themes and toolbars?”

Available real estate is the short answer. A search box is small and a critical function that launches a full web page. There’s simply not enough real estate to make banners a significant element for advertisers in most applications. Naturally, there’s a deeper answer that can be explored.
Search enjoys heavy use and includes contextual and relevant search advertising. The ad is directly related to the search term used, or at least it should be, and the advertiser only pays when the user clicks on the ad, not when they view it.

With display ads, when the web page loads and the ads appear, the advertiser is charged – regardless of whether any one looks at or clicks on the ad. (Yes, were ignoring the whole remnant advertising category for the sake of this discussion) Now, think about an application that is open all the time. The potential number of ads that can be served is immense. Combine that with the limited space available in the application itself and both of these elements suppress the power of this space.

What helps the advertiser in the case of custom browser themes is knowledge of the type of person using the theme. Since the browser themes are centered on a single brand, there’s existing data on the demographics of that brand making it more valuable to the advertiser. So, we expect our partners demand some form of placement and anticipate it will come first as a value-add to sponsors that are already buy an advertising package (think sports team sponsorships) to establish a benchmark of performance. Fortunately, the flexibility of our product will allow us to meet whatever the next request is.

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