Monday, October 31, 2005

Google and the Ad Market

Really nice article on Google and the Ad Market at the New York Time. Here a few snippets of this five page article :
On Google position in the Ad Market
By next year, Mr. Noto said, he expects Google to have advertising revenue of $9.5 billion. That would place it fourth among American media companies in total ad sales after Viacom, the News Corporation and the Walt Disney Company, but ahead of giants including NBC Universal and Time Warner.

On Adwords way-to-do applicable to other media
The media and advertising industries certainly see a future in which television ads are aimed at individual viewers. But few outside of the engineering Ph.D.'s at Google think that television ads should simply be utilitarian, rather than entertaining, provocative or annoyingly repetitive - the models that have worked so far. And some media industry executives wonder whether Google, which has already become the most powerful force in Internet advertising, should also become the clearinghouse for ads of all types - a kind of advertising Nasdaq.

On Adwords technology
For every page that Google shows, more than 100 computers evaluate more than a million variables to choose the advertisements in its database to display - and they do it in milliseconds. The computers look at the amount bid and the budget of the advertiser, but they also consider the user - such as his or her location, which they try to infer by analyzing the user's Internet connections - as well as the time of day and myriad other factors Google has tracked and analyzed from its experience with advertisements.

On Google Base
Mr. Brin said that preliminary versions of Google Base leaked onto the Internet and that the company's partners should not fear it. "Google Base is as much about classified as it is about zoology," he said.

On Adwords next step
Google isn't quite pursuing that sort of deal, but it is trying to have big retailers link their inventory systems directly to its advertising auction. That way, a toy store chain, for example, could respond to a search for dolls with an ad for either Barbies or Bratz, depending on which were overstocked in the store near the user's home. "Most retailers only advertise 5 percent of their products," said Tim Armstrong, Google's vice president for ad sales. "We can let them advertise all of them."

On branding advertisements
Google has been able to convince some companies that its text ads can help build awareness of their products, even if people don't click on them to buy something. But top executives are also meeting weekly to develop a broader strategy for branding advertisements. Google has already allowed its so-called publisher network - those non-Google sites for which it sells ads - to accept advertising with limited graphics. At first, these were simple images, perhaps with a little animation. It is now moving to accept ads that use the popular Flash technology that allows for more interactivity. So far, these nontext ads have been only a tiny part of Google's business.

Note this article was released sunday and I think it open some Wall Street guy's eyes ($15.90 dollars up at this moment ;-)

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