• by Shankar Gupta , November 30, 2006

Google appears to be testing a new display ad network that will sell ads on a cost-per-thousand impression basis, according to a report that surfaced this week on the blogosphere.

But blogger John Chow, who authors JohnChow.com, Tuesday wrote a post providing details about a new "Google Display Advertising Network." "Recently, Google started a new ad network but is not telling anyone about it," he wrote. He added that the network is invite-only, and requires publishers to sign a yearlong contract to provide their ad space to Google at a fixed CPM rate. He wrote that he had been invited to participate.

A Google spokesman denied the report. "We are not testing or developing a new ad network," he said.

Currently, Google offers display ads and video ads on a CPM basis through its AdSense network, but the "Google Display Advertising Network" is reportedly aimed at picking up major Fortune 1000 advertisers.

The potential new service was seen as good news by some media executives. Sarah Fay, president of media buying firm Isobar U.S., said that although the CPM display ad space is fairly competitive space, the company is looking forward to seeing what deals Google can cut. "We tend to test and try, so we'd love for Google to step up and prove themselves as a strong partner in the market."

Sterling Marketing Intelligence principal Greg Sterling said that although Google dominates search, it lags behind competitors like Yahoo in the display ad market--and that's where big marketing dollars are headed. "They have been weak in that area, especially relative to Yahoo. They're trying to change that, obviously," he said. "There's a lot of money that's going to migrate online, and it's going to choose display advertising over search."