francis
13th May 2004, 06:15 pm
This is from the New York Times which requires a registration to read. So, so save y'all registering, the URL is this: http://www.nytimes.com/2004/05/13/technolo...print&position= (http://www.nytimes.com/2004/05/13/technology/13goog.html?pagewanted=print&position=)
And the article is here:
Google to Sell Type of Ad It Once Shunned
By SAUL HANSELL
Google, the Web search engine which attracted a loyal following in part because its simple Web site is uncluttered by obtrusive graphical banner ads, has now decided to sell the sort of ads it once scorned.
The graphic ads will not appear on Google.com for now. But they will appear on the sites of other Web publishers where Google sells advertising. That segment of ad sales is a fast-growing part of Google's business. Until now, the advertisements on other sites have been a few words of text and a link to the advertisers' Web site.
Now advertisers will have the option of adding a graphic image to their text ad. But the advertisers will have no guarantee that the graphic version will be shown.
Google's computer system will decide whether to show the text version or the graphic version of the ad, based on its calculation of which would draw the most clicks from users. Advertisers bid how much they will pay for each click, regardless of whether it comes from a text or graphic ad.
Tim Armstrong, Google's vice president for advertising sales, said that in some cases bids might rise if advertisers got better results from graphic ads, but that was not certain.
"This model lets the advertisers pick their price," he said
For Web site operators, Google's move is a mixed blessing. For smaller sites without their own ad sales departments, Google may be able to provide them with even more ad revenue. Many already find Google's text ads to be a significant revenue source.
But larger sites are worried that Google's new graphic ads would bring down the price of their own graphic ads.
"We are in the display advertising business," said Douglas McCormick, the chief executive of iVillage, the women's Web site. "Advertisers place ads with us because they trust the environment we create for them."
Mr. McCormick said that iVillage had run Google's text ads but it would run the new graphic ads only if it was clear that the Google advertisers were different from its own advertisers. Google allows publishers to accept graphic ads or just text ads.
Google is entering a field with established players. Companies like 24/7 Real Media and Advertising.com have assembled networks of sites where they sell graphic ads. Google says its program is better because its computer system displays ads that are more relevant to the content of the pages where they are displayed. In theory, that makes users more interested in the ads and advertisers more likely to get hot prospects.
Most large Web sites prefer to charge a set fee to display a graphic ad, typically expressed in the cost per 1,000 ads shown, rather than charging only if users click on the ad.
David Moore, the chief executive of 24/7 Real Media, said that Google was entering the graphic ad business because its text ads have not produced as much revenue as publishers wanted.
"We generate significantly better revenue for publishers than Google," Mr. Moore said. "We can charge higher prices because we sell in cost per thousand not cost per click."
Mr. Armstrong said that advertisers are moving away from cost-per-thousand pricing because they want to have more control over the cost and return from their advertising.
"The world of advertising is getting more quantitative and data driven," he said.
For now, ads on the Google.com search site will remain only text. But Mr. Armstrong said the company would explore whether to run graphic ads on its main site, especially on sections like the Froogle shopping service, that already display photographs of products. Eventually, even the sea of text on Google's main site could well be interrupted by colorful graphics.
"We have no plans to show images on Google.com," said Mr. Armstrong, "but we are not opposed to it."
And the article is here:
Google to Sell Type of Ad It Once Shunned
By SAUL HANSELL
Google, the Web search engine which attracted a loyal following in part because its simple Web site is uncluttered by obtrusive graphical banner ads, has now decided to sell the sort of ads it once scorned.
The graphic ads will not appear on Google.com for now. But they will appear on the sites of other Web publishers where Google sells advertising. That segment of ad sales is a fast-growing part of Google's business. Until now, the advertisements on other sites have been a few words of text and a link to the advertisers' Web site.
Now advertisers will have the option of adding a graphic image to their text ad. But the advertisers will have no guarantee that the graphic version will be shown.
Google's computer system will decide whether to show the text version or the graphic version of the ad, based on its calculation of which would draw the most clicks from users. Advertisers bid how much they will pay for each click, regardless of whether it comes from a text or graphic ad.
Tim Armstrong, Google's vice president for advertising sales, said that in some cases bids might rise if advertisers got better results from graphic ads, but that was not certain.
"This model lets the advertisers pick their price," he said
For Web site operators, Google's move is a mixed blessing. For smaller sites without their own ad sales departments, Google may be able to provide them with even more ad revenue. Many already find Google's text ads to be a significant revenue source.
But larger sites are worried that Google's new graphic ads would bring down the price of their own graphic ads.
"We are in the display advertising business," said Douglas McCormick, the chief executive of iVillage, the women's Web site. "Advertisers place ads with us because they trust the environment we create for them."
Mr. McCormick said that iVillage had run Google's text ads but it would run the new graphic ads only if it was clear that the Google advertisers were different from its own advertisers. Google allows publishers to accept graphic ads or just text ads.
Google is entering a field with established players. Companies like 24/7 Real Media and Advertising.com have assembled networks of sites where they sell graphic ads. Google says its program is better because its computer system displays ads that are more relevant to the content of the pages where they are displayed. In theory, that makes users more interested in the ads and advertisers more likely to get hot prospects.
Most large Web sites prefer to charge a set fee to display a graphic ad, typically expressed in the cost per 1,000 ads shown, rather than charging only if users click on the ad.
David Moore, the chief executive of 24/7 Real Media, said that Google was entering the graphic ad business because its text ads have not produced as much revenue as publishers wanted.
"We generate significantly better revenue for publishers than Google," Mr. Moore said. "We can charge higher prices because we sell in cost per thousand not cost per click."
Mr. Armstrong said that advertisers are moving away from cost-per-thousand pricing because they want to have more control over the cost and return from their advertising.
"The world of advertising is getting more quantitative and data driven," he said.
For now, ads on the Google.com search site will remain only text. But Mr. Armstrong said the company would explore whether to run graphic ads on its main site, especially on sections like the Froogle shopping service, that already display photographs of products. Eventually, even the sea of text on Google's main site could well be interrupted by colorful graphics.
"We have no plans to show images on Google.com," said Mr. Armstrong, "but we are not opposed to it."