Madison Ave: Google's Branded Advertising Ambitions Likely To Face Resistance From Top Marketers, Publishers

Google's ambitious plan to offer advertisers the ability to place graphical ads on sites of their choosing may not lure either big brand advertisers or premium publishers, according to ad industry executives and analysts interviewed by OnlineMediaDaily.

Google announced Monday that it intends to allow advertisers to target individual publishers on the Google advertising network, and to bid on a cost-per-thousand impression basis instead of a cost-per-click basis--two of the key components for branded advertising. The program allows advertisers to target individual sites by bidding on a cost-per-thousand impression price, with a minimum bid of $2.

While the announcement generated a lot of buzz within the industry--including a report by Merrill Lynch describing the decision as a "very positive move"--advertising executives and other industry observers weren't nearly as optimistic. They said that top marketers aren't likely to participate in the program unless they get the kind of control they're used to when they buy directly from publishers, and that top-tier publishers might actually face losses in branding ad dollars if Google acts as a middleman.

Key to the success of Google Ad Network will be how much control it offers advertisers, said Alan Schanzer, a managing partner at the Digital Edge, an online media buying firm. He said marketers want the ability to control where--both on the page and where within a site--an ad will be displayed. Marketers also want the prerogative to control the proximity of an ad to certain types of editorial content, he said.

So far, Google hasn't stated how much of this sort of control it's willing to offer. "Without seeing the product and without seeing the kinds of controls of where the ads show up, it's hard to say," he said. It's necessary for advertisers to have some sort of editorial control. Plus, a floor bid of $2 sounds expensive, said Schanzer, especially compared to other ad-serving networks.

Sarah Fay, president of online media buying firm Isobar, said Google's going to have to persuade her clients that its network makes sense. "I'm sure we'll be having discussions with Google about it," said Fay. "It's going to be, 'What's in it for us? What's in it for our clients? And they're going to have to have answers as to why we should use them as a network."

She added that she sees an obvious opportunity for Google to tap into advertisers who start their Web campaigns with search, and then decide they want more. "Some people start with online advertising and they move towards search, but I think a lot of marketers are starting with search and moving towards other parts of advertising," she said. "I think Google just wants to be there to capture that."

Aside from advertisers, Google also will have to convince its AdSense publishers to remain in the network for the program to work--a potentially difficult task, said some. "If I'm the New York Times and I have a good solid branding advertiser, maybe I don't want to be eligible for them to buy through Google. I want to sell to them directly," Forrester Research Analyst Shar VanBoskirk said.

Jason Krebs, NYTimes.com vice president for sales and marketing, said the company had no plans to stop participating in AdSense. "We're pretty happy with our strategy on the display advertising business," he said.

Peter Hershberg, a managing partner at search engine marketing company Reprise Media, added that major publishers that can command major fees for branded advertisement may not be the targets of this upgrade. "The premium publishers who made a lot of money on their inventory are probably going to have a difficult time accepting ads from Google. In the instance that somebody is not sold out, it could represent a good backup for them," Hershberg said. "We're interested in seeing how much traction it gets from the major publishers."

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