Service Incorporated Into AdWords

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NEW YORK ( -- Google today introduces a free service called Google Analytics that will help marketers measure the performance of all their online marketing and their Web sites.

In entering the $460 million analytics market, Google pits itself against Web-analytics companies such as Web Trends, Omniture and Web Side Story. The additional online capabilities come from a Web-analytics company, Urchin, which Google purchased for an estimated $30 million last spring, and has now incorporated into AdWords.

'From click to conversion'
By offering the reporting technology for free, the search giant is easing the way toward online marketing for small companies, while providing a system that is scaleable enough for Fortune 500 brands, said Paul Muret, a founder of Urchin, now an engineering director at Google. “It’s lowering the barrier to entry and simplifying the process for large companies,” he added. “We can take [marketers] from click to conversion to have an accurate ROI.”

The new service will appear as a tab in the automated AdWords tool. AdWords is the cost-per-click service through which marketers bid for sponsored links that appear on Google’s search results pages. Google Analytics will provide reporting not only on keyword performance, but also on e-mail campaigns and display ads -- including rich media and video formats, Web-site-link-exchange programs and direct-response print advertising.

'First one free'
Pushing services to the fastest-growing business sector in the U.S., the 20 million small companies, isn’t a bad strategy, said David Hallerman, senior analyst, online-market-research firm eMarketer. “The first one is always free,” he said. “The more companies involved with Google, the more they’ll find ways to monetize that relationship down the line.”

Josh Perlstein, exec VP, Response Media, an interactive and multichannel media agency in Atlanta, agrees that making the service free is a smart competitive move. “It will allow more marketers to gravitate toward Google [and show them that] you get more value out of Google than Yahoo or MSN.”

The Mountain View, Calif., search behemoth is always on the lookout to acquire good companies that are small and growing in key areas. “It’s the most cost-effective and the smartest way to grow their business into other aspects of online marketing,” Mr. Hallerman said.

Online ad spending is expected to total $12.9 billion in 2005, eMarketer predicts, and Google’s ad revenue will amount to nearly 20% of that. But nearly all Google revenue comes from paid-search advertising. “As big as paid search is, you can’t rely on one source of revenue forever,” Mr. Hallerman said.

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