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| This year the combined advertising
revenues of Google and Yahoo ! will rival the combined primetime ad revenues of
America’s three big television networks, ABC,CBS and NBC predicts Advertising
Age. It will, says the trade magazine, represent a "watershed moment" in the
evolution of the internet as an advertising medium. A 30-second prime-time TV ad
was once considered the most effective--and the most expensive--form of
advertising. But that was before the internet got going. And this week online
advertising made another leap forward. This latest innovation comes from Google, which has begun testing a new auction-based service for display advertising. Both Google and Yahoo! make most of their money from advertising. Auctioning keyword search-terms,which deliver sponsored links to advertisers’ websites, has proved to be particularly lucrative. And advertisers like paid-search because, unlike TV, they only pay for results: they are charged when someone clicks on one of their links. Both Google and Yahoo! along with search-site rivals like Microsoft’s MSN and Ask Jeeves, are developing much broader ranges of marketing services. Google, for instance, already provides a service called AdSense. It works rather like an advertising agency, automatically placing sponsored links and other ads on third-party websites. Google then splits the revenue with the owners of those websites, who can range from multinationals to individuals publishing blogs, as online journals are known. Google’s new service extends AdSense in three ways. Instead of Google’s software analyzing third-party websites to determine from their content what relevant ads to place on them, advertisement will instead be able to select the specific sites where they want their ads to appear. This provides both more flexibility and control, says Patrick Keane, Google’s head of sales strategy. The second change involves pricing. Potential internet advertisers must bid for their ad to appear on a "cost-per-thousand" (known as CPM) basis. This is similar to TV commercials, where advertisers pay according to the number of people who are supposed to see the ad. But the Google system delivers a twist: CPM bids will also have to compete against rival bids for the same ad space from those wanting to pay on a "costper-click" basis, the way search terms are presently, sold. Click-through marketing tends to be aimed at people who already know they want to buy something and are searching for product and price information, whereas display advertising is more often used to persuade people to buy things in the first instance. The third change is that Google will now offer animated ads--but nothing too flashy or annoying, insists Mr. Keane. Such ads are likely to be more appealing to some the big-brand advertisers. Spurred on by the spread of faster broadband connections, such companies are becoming increasingly interested in so-called "rich-media" ads. like animation and video. |