Google aims at display ad market
After declining search ad revenue growth and problems with gaining a foothold in radio and television advertising, Google is focusing on the Web’s elusive display ad marketplace.
Although Google is the acknowledged king of the Web advertising marketplace when it comes to ads that go with search returns, they have been less successful with other kinds of advertising. Results in the radio and television markets have been less than stellar, and Google is even beginning to drop out of those areas. Used to spectacular growth in the search ad arena, the economy has dropped revenue growth in that lucrative market down to a paltry 6 percent.
Looking for another way to grow advertising revenue, Google has apparently made a decision to focus its efforts on the on-line performance display advertising arena. On the Web, display advertising is made up of all those banner and video ads that are seen on so many pages. Unfortunately for Google, while it has been building a nearly unbeatable lead in search advertising, its competitors have built up solid leads in the area of display advertising.
Both Microsoft and Yahoo are ahead of Google in the smaller, but still lucrative, banner and video ad areas, according to a Business Week story. A lot of that lead is there because both Microsoft and Yahoo own pages on which to place their advertising, since both have a great deal of content on the Web. Google, although way ahead of both rivals on the search side, has very few Web content pages of its own.
Google is now putting most of its efforts into the area of performance ads, which work more like search ads than do regular display ads. They allow advertisers to use data analysis and user-tracking technologies to match their ads much more closely to their readers and then to measure mouse clicks and other actions, allowing advertisers to pay only for actual ad performance. Sergey Brin, Google’s co-founder, says “It’s like search—matching people with information they want. It just happens to be promotional.”
Google plans to leverage much of its existing advertising infrastructure to move into this marketing arena, so it should be able to move quickly. It will also be using the Exchange system it got when it purchased rival DoubleClick last year. That gives them a leg up in quickly matching sites (even small sites) to display advertisers. They expect to kick off their initial efforts towards performance ads this summer. Look out Microsoft and Yahoo…
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June 14th, 2009
I can’t help thinking that sometimes Google needs to stop being an algorithm and to start developing real relationships with people. I think that’s been the biggest problem it’s had with both managing publishers and getting clients. While dealing with a machine is fine for search advertising, selling display advertising is a different ball game.
June 14th, 2009
Selling display ads is a completely different process to selling search advertising. As Jason points out, it’s all about wining and dining, and doing deals.
June 18th, 2009
Google certainly has the resources to make an impact in the display market, but they’ve been talking about their commitment for years and their product hasn’t really caught on. A couple of points on that:
- Google’s free Ad Builder sounds like a nice touch, but AdReady already offers a better tool, and BidPlace SB (full disclosure: I work on this product) will be offering a much more comprehensive, easy-to-use Banner Builder product next month.
- Google Display will charge over the client’s daily budget cap when extra impressions are available. BidPlace SB and other products cap the client’s spend at the dollar amount that the client has indicated. No billing surprises – what a concept!
- Google reaches a smaller portion of the Internet population than BidPlace SB, which is powered by the industry-leading Advertising.com network.
In short, there are a number of significant areas where Google’s display product has historically fallen short relative to Bidplace SB and other competitors. Based on the “new” info Google has released, it appears that gap remains, and perhaps helps to explain the distance between Google’s ambitions in this space and their current market share.