$43.6B U.S. agency revenue
These initiatives and others are aimed at helping Google continue its rapid growth, which relies almost entirely on advertising revenue. Google has tentacles reaching into nearly every aspect of advertising—not just the Web and mobile but print, TV and radio as well.
For b-to-b marketers and ad buyers, the challenge is to figure out which Google directions are worth following, particularly in a b-to-b market where targeting is often more important than mere reach.
"Google is an `announcement powerhouse,' no doubt," said Jon Schaaf, VP-media at agency HSR Business to Business. "From a b-to-b perspective, we always try to work with niche publications that really hit our audience. But if Google can hit my target audience in a cost-effective way, I have no apprehension [about] using them. They've been positioning themselves very well, particularly from a video perspective."
The range of online-focused ad moves that Google has made—or is rumored to be about to make—in recent weeks has been staggering. New efforts include:
- Google Gadgets, a new interactive ad format that adds not only rich media capabilities but also takes live data feeds that keep the ads updated and let users interact with them in real time.
- Google AdSense for Mobile, an extension of its text-based search ad program for mobile devices. Interestingly, Google chose to make it the default option within AdSense so that ads could be delivered to the Web or mobile devices on equal terms. That move surprised some ad buyers, but Google said it would significantly help prime the pump for the mobile advertising market.
- Text-based ad overlays on YouTube videos, which forsake the common yet intrusive preroll model for a clickable text scroll. Right now, Google is keeping the YouTube overlay ads limited, but the program could ultimately be rolled into both AdSense and AdWords, the latter of which could enable publishers to monetize their own videos with Google's help. Google isn't the first with text overlays—VideoEgg and others have offered them, too—but it could help popularize this video ad unit.
Other nascent or rumored efforts include the little-covered addition of AdSense text ads onto Google Maps, a clear local ad play. Also on the local front, and perhaps the biggest rumor of all, is the so-called Google Phone, which is clearly in the works but has yet to be officially announced. Talk in that area is of a phone that might bypass telco networks altogether and would be driven by—and perhaps delivered as a no-cost device thanks to—personalized, contextual mobile advertising.
Executives from interactive agency AKQA said Google has been in to brief them in recent months on many of these developments and others (though not the elusive "Gphone"). Scott Symonds, AKQA's executive media director, said Google isn't resting on its search laurels and realizes it needs to expand ambitiously in different directions.
Google certainly isn't alone in targeting video and mobile ads. Yahoo and Microsoft both updated their search algorithms and user interfaces in recent weeks, and those two ad giants—and a slew of smaller upstarts—are all vying to beat Google to the next level. But Google's big lead in search, massive capitalization and reputation for innovation make it the company to watch, Symonds said.
"Google genuinely believes in an ad-supported world," Symonds said. "A year or two ago, I felt they were much more suspect. They were searching for something to follow search as a real direction for them. I feel that less now.
"[Google's new projects] are a good show. It puts their money where their mouth is. We watch them very closely. The kinds of things they are doing make life more interesting for us and our clients."
Maintaining a stream of innovation, in particular with its new Gadget ads, is all about providing "advertisers and agencies with an imaginative, dynamic way to interact with [their customers]," said Susan Wojcicki, Google's VP-product management.
Among the b-to-b companies that have experimented with Gadget ads is Intel, which used them as part of its Cen- trino Duo and "Chips" campaigns. As an example of what's possible with Gadgets, one Intel ad, "MobileTasker," let users play a brief video game within the interactive unit.
On the mobile side, Google has been experimenting with mobile applications and text ads for some time, but recent developments with smartphones, and in particular Apple's iPhone, make the timing seem right. U.S. mobile search advertising revenue is projected to grow to $1.4 billion by 2012, up from just $33.2 million this year, according to a recent report by the Kelsey Group.
Among the challenges with mobile advertising is the requirement to make it useful yet unintrusive, said AKQA's Symonds. The best immediate way out of that dilemma could be the same for mobile as it was for the Web: Deliver contextual ads as part of the search experience, a time when users are actively seeking information, including targeted ads that can help them solve a problem.
While meshing mobile search results with Web results could work for a time, analysts say eventually Google must build an AdSense approach specifically targeted to mobile users, ultimately including location-based data as well.
"Information and services needs on cell phones can be different than those on computers," said Jupiter Research analyst Julie Ask in reviewing Google AdSense for Mobile. "If I search for `Crest toothpaste' online, I probably want information about the product. If I search on my phone, I may want the nearest location selling the product."
For b-to-b, that targeting is especially key. "We work with clients that are trying to reach into an audience of hundreds of thousands of potential customers; other clients are just trying to talk to the right 200 people," said HSR's Schaaf. "If we can use Google to hit those customers, we're all for it."