April 24, 2005 9:00 PM PDT
Google readies banner offerings
Beginning Monday, the search giant will start allowing advertisers to display ads that contain animated images on third-party partner sites--a first for Google and a departure from company co-founders' early stance against such Web advertising. (Google itself still shows only text ads on its site.)
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Google will also allow advertisers to designate on which third-party Web sites their ads will appear, whether it's large partner sites like The New York Times or smaller pages.
The move is another first for Google and could resolve a long-standing complaint among advertisers who want more control of how and where they target promotions. Previously Google advertisers could bid only on keywords to appear in text ads on any of hundreds of related sites in its network.
Finally, to take advantage of the program, advertisers must bid for placement on a cost per impression (CPM) basis, as opposed to Google's stock in trade cost-per-click (CPC) search ads.
CPMs are modeled more closely to brand advertising like TV commercials in which marketers pay based on the number of people who see the ad. In contrast, marketers pay only for CPC ads when people click.
"We think highly targeted (display) advertising will work," said Patrick Keane, head of ad sales strategy at Google.
With the move, Google is helping stoke a revival of the online ad network that enjoyed popularity in the late 1990s. At the time, early industry leaders like DoubleClick, 24/7 Media and Engage controlled the ad sales of tens of thousands of publishers' sites, targeting display ads like banners based on specialty categories such as cooking and sports.
They also began to target ads to Web surfers' behavior across swathes of pages before the bubble burst. Many of their fortunes faded with the dot-com bust, roughly when cost-efficient search marketing that Google's now famous for began to take hold.
Today, ad networks such as Fastclick and Advertising.com have regained some power of the early networks without the status. Consequently, Google could be a weighty competitive force.
"It's the return of the ad network," said Kevin Lee, president of search engine marketing firm Did-It. "It's a big deal because it puts Google squarely in competition with the graphical banner networks.
"Clearly, this is an attempt to get at brand advertisers."
Google's chief rival, Yahoo, recently said it is gaining steam in the brand advertising business with rich media, video and other forms of display advertising in high demand. Last week, the company reported more than $1 billion in sales of advertising, including brand ads, and company CEO Terry Semel touted its flexibility in selling search or display promotions in the future.
In contrast, Google has long had all its eggs in the search-engine marketing basket. Until now.
Google's program, called Site Targeting, is being introduced in test form on Monday, but will be rolled out to all advertisers in the next two weeks, Keane said. Advertisers will be able to target ads not only but Web site, but also by category, such as wine enthusiasts. Google will target ads by scanning Web pages for their content.
Advertisers must bid a minimum of $2 to reach a thousand people, but they must compete against other promoters for the same inventory, so costs could inflate for popular keywords, Web sites or categories.
Google said that although it is accepting animated ads for the first time, it will have limitations on the promotions. For example, it will not accept blinking ads that continuously loop, popular the Web over.
Regarding Google's early aversion to any kind of animated ad, Keane said: "I wouldn't say that we have antipathy for the kind of advertising on the Internet today. We just want it to be more accountable, and more relevant."
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