While Google is busy grabbing headlines for its offline exploits, the search giant, long the leader in text and search ads, has steadily been adding to its online display- and video-advertising network. Google's total network is up 24% in unique visitors over the past year and reaches 62% of the country, according to ComScore, and Google has been working hard to add more video and display to the traditionally text-based AdSense.
|"Right now they're very successful using AdSense to service direct response but have continued to struggle to establish themselves as a destination for brand advertising," said Jeff Lanctot, senior VP-global media lead at Avenue A/ Razorfish.|
"Google is definitely sneaking up on people in terms of being a display and video network," said Bryan Weiner, CEO of 360i. "It's almost inevitable that they'll be one of the largest display and video networks."
But brand dollars aren't necessarily Mountain View bound.
"Right now they're very successful using AdSense to service direct response but have continued to struggle to establish themselves as a destination for brand advertising," said Jeff Lanctot, senior VP-global media lead at Avenue A/Razorfish.
Media buyers say the network, composed of thousands of sites ranging from indie blogs to large corporate publishers, many of which use only the text ads, faces two key challenges: moving up the food chain by increasing its high-profile premium inventory and opening up the gates to third-party ad serving. Google has said it is continuing to add new inventory to the network. It has not, however, budged on the third-party ad serving -- and that's hindering its ability to attract major agencies and brands.
Agencies have to place and report on their campaigns through a Google ad-serving system as opposed to aggregating it through a centralized ad-serving platform the way the vast majority of display advertising is placed.
"We really only want to seriously invest in networks that permit us to use third-party ad serving," said David L. Smith, CEO of Mediasmith, San Francisco.
Agencies want to DoubleClick Google ads
There are two reasons agencies are clamoring for Google to allow third-party ad serving. One, agencies rely on their ad-serving companies, such as DoubleClick or Atlas, to provide them with attribution -- to credit back which ad made the conversion. Second, that server data also helps the agencies assign credit to ads when a person views the ad but doesn't go directly to the site.
So why hasn't Google budged? Gokul Rajaram, director of product management at Google, said the company is trying to combat latency issues that can occur in third-party ad serving. "We've found it's not the best user experience," he said. "It adds milliseconds to the ad serving, ads might not render fast enough." He also said Google needs to look more closely at the cookies third-party ad servers use, because it could be a privacy concern. Google has, perhaps, more to lose than any other web publisher should it become the target of privacy concerns, given the sheer amount of search data that passes through its system.
Google VP-Ad Sales Tim Armstrong addressed the third-party serving issue with analysts recently: Third-party ad servers, he said, "assume they can figure out how to target more effectively than you can." He said Google has been happy not to use third-party ad servers to deliver its search ads and that it's "working diligently" in the branded ad space to continue to serve ads effectively.
Now, Google is going out to major publishers, hoping to lure more premium inventory with promises of CPM guarantees.
Mr. Rajaram said Google works with sites like The New York Times and CNET (only on text ads, CNET said). He said the company gets past sales channel conflict -- two entities selling the same website -- by letting publishers set minimum prices in the Google network so as not to undersell them.
Casting far and narrow
Google's network allows advertisers to target by site -- something many other networks do not. Google recently introduced a cost-per-click payment model to its site-targeted display ad network in an effort to lure some of those performance-based clients using its cost-per-click text-based, ads.
"At Google, when we launch a product we try to make it accessible to both large and small marketers," said Mr. Rajaram. And it will likely see more brand advertising business thanks to Google's efforts to create cross-company ad deals for major marketers, such as its collaboration with Cadillac on MyCadillacStory.com.
And to be fair, the lack of brand interest on AdSense isn't so out of the ordinary for ad networks. Said Avenue A's Mr. Lanctot: "Frankly that is true of most networks historically. For Google it might be compounded by the fact they have so many sites and the long tail is really so long."
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CORRECTION: An earlier version of this story incorrectly reported to Bryan Weiner as COO of 360i. He is, in fact, its chief executive.