Execs: AOL Helps Google Lure Big Brands

by Shankar Gupta, Dec 22, 2005, 6:00 AM

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The expanded advertising partnership between Google and AOL, finalized this week by the Time Warner board, will significantly help Google to draw more large brand advertisers, marketing executives told OnlineMediaDaily.

The agreement calls for Google to pay $1 billion for a 5 percent stake in AOL. Among other provisions, the deal more deeply integrates AOL's content pages into the Google network, and allows the AOL sales force to sell image ads that will appear within Google's AdSense network of publishers.

Matt McMahon, an executive vice president at search engine marketing firm Fathom Online, said this combination will encourage more rarified marketers to turn to Google. "One of Google's goals is to become more of a comprehensive one-stop shop for media buyers, and so growing and enhancing their ad network is certainly a primary goal to do that, so they can take it beyond search keyword text links," he said.

Sarah Fay, president of Isobar U.S. and interim president of Carat Fusion, agreed that the deal positioned Google to deal with bigger-name advertisers. "Does it make Google a bigger player? Well, Google's already such a big player. But it does change the nature of their relationship with some clients--it makes them a more strategic partner," she said. "If they can approach an agency or a client with a more holistic offering, then they're in a better position to help clients do what makes sense with their properties versus just search," she added.

On the other hand, Google's embrace of more display advertising could be a pitfall for the search giant, which so far has relied on less in-your-face advertisements, according to Piper Jaffray analyst Safa Rashtchy. "The partnership expands display advertising across the Google Network," Rashtchy wrote. "We are cautious on this component of the strategic alliance, as much of Google's success in acquiring search traffic and increasing monetization has been a result of the user experience and unobtrusive advertising." Overall, however, Rashtchy viewed the deal as "positive."

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