Though Google's expansion of its ad program will give advertisers more control over the Web sites on which their ads appear, smaller Internet publishers may be hurt.
“Giving advertisers more control is always a good thing. Conversely, the publishers in Google's network that don't have a strong brand are all but dead in the water,” said Mike Yavonditte, CEO of New York-based Quigo Technologies, which operates AdSonar Exchange, a service that matches online advertisers and publishers.
Google now is allowing content site targeting on the Google Network so advertisers can target their ads based on the specific content sites in the Google Network. Components of site targeting include cost-per-impression bidding and the acceptance of animated ad images. This is in addition to Google's text and static image ad formats.
So, CPM bidding on site-targeted campaigns is by audience, while the old text ads are based on keywords. Clients using this new product include media services firm Starcom MediaVest and automaker DaimlerChrysler.
“It's a natural expansion of what we offer,” Brian Axe, product manager at Google, said at yesterday's ad:tech05 San Francisco conference. “There are more options for advertisers. Because the keyword and CPM ads compete in the Google auction, it's also better for users because users have another source of ads.”
The move could reduce click fraud, which many analysts say is a significant problem for search engines.
It also is expected to boost Google's profits from advertising, building on a surge in its first-quarter income announced last week. Google's net income jumped nearly 600 percent to $369.2 million in the first quarter of 2005 over the same quarter last year.
The new program helps Google compete with all the banner networks, which should worry those networks, said Kevin Lee, executive chairman of search marketing firm Did-it.com, New York.
“Having over 200,000 advertisers means Google can potentially offer a publisher a higher CPM on their inventory than many other networks,” Lee said.
Though small online publishers and networks should be concerned, Yavonditte and Lee said the move is a win-win for advertisers, publishers and Google.
“By giving marketers more choice, and still managing their network by highest effective CPM, they create a win-win scenario,” Lee said. “Direct marketers get to segment the marketplace more efficiently, and the publishers get additional value, particularly publishers with strong brands or good demographics.”
Christine Blank covers online marketing and advertising, including e-mail marketing and paid search, for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters