Ruminations on Google’s future as the über ad network
By Charlene Li
I’ve been thinking quite a bit about Google’s Site Targeting capabilities and wanted to put something out there for discussion. It strikes me that Google currently will offer only animated graphics as an option for the CPM-priced ads. That’s great for all of those brand marketers out there who want to name the CPM they are willing to pay. Not so great for those publishers who have their own direct sales forces pitching very high CPMs!
There’s no way these branded publishers (NYTimes.com, CNN.com, iVillage.com, to just name a few) will accept Google’s new ads on their premium pages when there is a shortage. But what about remnant inventory that goes pretty much unsold? Why not try it on the new Google ad network, especially if the “cost of sale”, which on a negotiated basis can be pretty attractive (let’s assume a revenue share back to Google of only 5-15%), it certainly starts to make sense. (Note: I wrote more about this in a Forrester brief about Google’s Site Targeting announcement
But let’s take it one step further – inevitably, Google will accept rich media ads, pushed onwards by eager marketers and equally revenue-hungry publishers. What’s next? Well, why not online video ads, the darling advertising format of the moment? And if Google has a large inventory of interesting, interactive video ads that run online, they could then approach cable companies eager to capitalize on their ITV and VOD investments.
What makes this even more interesting scenario is the ability for Google to apply its nascent video search capabilities to understand the television content that is being seen – and to show the best contextually relevant interactive video ad for that moment.
Google’s growth prospect isn’t limited only to the Web and the Internet – it is in possession of the largest ad network in the world, at over 200,000 marketers. And it is Google’s ability to tap into all facets of the advertising budgets of those marketers that will determine its success.
Now for the really BIG caveat – Yahoo! and MSN can do this too. Do a search and replace of “Google” in the above text with these two competitors and you’ve got an interesting competitive space in the future where the ability to tap into and coordinate a marketing budget across different online channels – and offline channels – becomes a strategic advantage. Yahoo! and MSN have one big advantage in their back pockets – they already have strong, strategic relationships with online brand advertisers.
So I’m looking forward to the next few months to seeing: 1) how Google fares with Site Targeting, especially in getting publishers to sign up; 2) how quickly Yahoo! and MSN will follow-up with similar initiatives.
Let me know your thoughts on this – can Google or any of these other players “jump” the channel line and extend their ad networks beyond the Internet?