NEW YORK (AdAge.com) -- Fact: Most people never click on web ads. And that poses a problem for marketers who want to know if their display ads are working.
Google, though, is starting to provide an answer. In a bid to build a brand-advertising business, the search giant is using its vast trove of data culled from search queries and web traffic to measure the effectiveness of brand advertising.
The system, called Campaign Insights, has been in beta test in the past year with marketers like PayPal and Simplexity and beginning today, the company will start offering it to its bigger advertisers in the U.S. and U.K. Ultimately, like Google Analytics, Google will offer it to all of its display advertisers for free.
The system is Google's latest foray into display advertising, a fractured and inefficient market that Google hopes to rationalize in the same way it did paid search. Last month the company re-launched DoubleClick's display-ad exchange, taking on Yahoo's Right Media and Microsoft's AdECN, in addition to many other smaller players.
While Google dominates global search, so far it's made only small inroads into online display. Right now, search is a much bigger market; eMarketer expects $12 bil to be spent on search ads in the U.S. in 2009 compared to $4.7 bil on display.
With Campaign Insights, Google takes data from the advertiser's server logs to determine who was shown an ad and when. Then compares that to web searches and site visits culled from data from the millions of Google toolbars on computer desktops. Those results are compared to a comparable group that didn't see the ad.
Then Google measures the difference between the number of brand searches and site visits between the two groups. To filter out the impact of other media or influences, such as a TV campaign, Google compares the data to the two groups' behavior before the campaign began. The incremental difference is attributable to the display-ad campaign.
The effort itself is meant to resolve two problems in display advertising. First, the click is an inadequate measure because, as comScore research has shown, 8% of web users account for 85% of all clicks. "The consensus is the click is the wrong metric in display, but there's a void in coming up with the right measure," said Bryan Wiener, CEO of digital agency 360i.
Second, search tends to get the majority of credit for web activities because it is most likely to be the last action before a site visit or sale. Google is the biggest recipient of this credit. Indeed, some believe advertisers are over-investing in search and under-investing in display as a result.
"This should help advertisers get the balance between search and display right because they will have a better understanding of any lift that results from their display campaigns," said Brad Bender, former DoubleClick exec and now an advertising product director at Google.
It's also geared to persuade advertisers to place display ads on Google's content network, which includes YouTube and thousands of third-party sites.
Google's service is made possible by data generated by the millions of Google toolbars installed across the web, giving Google real-time insight into surfing behavior. That data is collected with information gleaned from the DoubleClick cookie, which is now deployed across Google's third-party display ad network.
The effort is similar to Microsoft's "engagement mapping," where it uses data from search and its Atlas ad server to assign value to ads that were shown long before a desired result, either a web search, site visit, or sale.
Through its toolbars, Google collects vast sums of data, and has been wary about doing much with it due to privacy concerns. Google execs emphasize that all the data used is made anonymous and examined not on an individual level but for trends among thousands of users. It is also limited to those who have enabled "enhanced features" on their toolbar, which sends additional data back to Google to enable services such as PageRank and sidewiki.
One advertiser who tested the service over the past year said data took several months to receive, but Google said turnaround would be about two weeks. The same advertisers said they found the service useful as "another data point" among others they also currently use.
Chris Kuenne, CEO of digital agency Rosetta, said he'd be wary that Google toolbar users are themselves a skewed sample. "I'm skeptical of the nature of the measurement and the objectivity question will always loom," he said. But, he said, "It's good news that they're democratizing measurement."