Five Reasons There Is No Adwords for P2P Yet


[qi:004] Brand Asset Digital launched its P2P advertising platform P2Pwords today, promising to bring pay-per-click advertising to file-sharing networks like Limewire, Gnutella and Emule. The NY-based company received a largely positive review from John Healey over at The LA Times Bitplayer blog, who thinks that “the opportunity presented by P2Pwords is so large, it may be hard for advertisers to resist.”

The combination of file sharing and advertising is definitely an interesting one. File-sharing networks attract millions of users. It’s becoming clearer every day that the entertainment industry’s shock-and-awe lawsuits just don’t work, which is why many look for other ways to monetize P2P. Still, it’s a good idea to approach these early trials with a healthy dose of skepticism. After all, Skyrider, another company that promised to marry search ads with P2P networks just closed its doors last week after burning through $25 million in funding.

Brand Asset Digital compares its P2Pwords platform to Google’s Adwords service. The major search engines attract about 10 billion web searches per month, the company argues, whereas P2P networks supposedly attract 1.5 billion searches per day. P2Pwords wants to leverage that search volume by essentially distributing sponsored and ad-supported content through file-sharing networks. The company’s private beta test included Glaceau, the maker of Vitaminwater; it distributed a sponsored video of Hip-Hop star 50 Cent that offered the ability to click through to a Vitaminwater web site. Brand Asset Digital said some of those early tests saw click-through rates of over 4 percent.

That sounds pretty good, but here are five big caveats:

1. P2Pwords is not Adsense. It’s understandable that the company is comparing itself to Google’s success story, but there are noticeable differences. Google monetizes search by displaying its ads next to, but separate from, its own search results. Brand Asset Digital, on the other hand, doesn’t own a search engine. Instead it injects its ads right into the search results of P2P clients like Limewire, which means it’s operating more like a SEO trying to exploit Google. As a result, it has to walk a fine line, displaying its content only when it is relevant, but also trying to get attention from file sharers that are looking for 50 Cent’s latest album, and not his Vitaminwater commercials.

2. P2P is moving to the web. Brand Asset Digital claims that 70 percent of all upstream bandwidth is consumed by P2P. That sounds about right, but most of those bits are actually caused by BitTorrent transfers. BitTorrent clients, however, don’t offer search networks, and are instead relying on web sites like Mininova and The Pirate Bay for search — which, of course, already have advertising in place. P2Pwords only works for P2P clients like Limewire. Those are still significant when it comes to music downloads, but their overall market share is shrinking.

3. The P2P ad market is getting crowded. P2Pwords claims to be the first “pay-per-click search marketing platform,” but it’s not the only one targeting file sharers with ads. The Jun Group, anti-piracy outlet Mediadefender, Hiro and Yume Networks are all offering similar services. Skyrider, also in the same league, just went under last week. Users of file-sharing clients like Limewire are also getting targeted by rogue spammers, porn advertisers, virus writers and other annoyances, which makes it harder and harder to find the content for which they’re actually looking. The P2P community is increasingly responding with IP number-based filters and block lists — and it may just be a question of time before P2Pwords advertisers find themselves blacklisted as well.

4. The market is just not that big. P2P networks only attract a small segment of the whole search market. You just don’t search for a plumber on Limewire. Most people are instead looking for music or video downloads, and most entertainment companies still shy away from P2P networks. The same seems to be true for many big brands, and it’s unclear how valuable P2P will be for them if their attitude ever changes. Advertisers want to sell products, but file sharers want stuff for free, which is why digital retailers especially may find that the Cost Per Acquisition of P2P campaigns is going to be much higher than that of traditional search advertising.

5. There are some significant changes coming. Contextual search ads really only took off when Google launched its own platform. The same may be true for P2P search ads. Limewire is getting ready to launch its own search ad network called Lime Links, which is currently in stealth mode. The company plans to offer self-serve advertising for its own and other P2P clients, as well as for entertainment-related web sites. Limewire’s client is installed on 17 percent of all PCs in the U.S., according to Torrentfreak, and the company is planing to expand its market share with new social networking functionalities. The launch of Lime Links is likely going to be a game changer for companies like Brand Asset Digital — and could even make their business model obsolete over night.



Another problem with advertising on P2P services is the mode people are in when using them. People click to support the service, not because they are interested in what the advertisers are offering.

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