• by May 13, 2004

News alert: Google is allowing banner ads, skyscrapers, leaderboards, and so-called inline rectangles within its AdSense ad network. The search giant won't accept rich media ads, but I wouldn't bet against it in the future; it's entirely possible that Google will eventually accept more than just banners. For the company that's most associated with text ads and links, the addition of banners is kind of a big deal.

Or maybe it isn't.

At least one publisher said the move beyond text links was inevitable. "We saw it coming before they told us a little bit about it," says Scot McLernon, executive-vice president sales and marketing, CBS MarketWatch.com. "It was a natural gravitation. It actually makes a lot of sense for lower tier publishers, and it will obviously garner a higher CPM."

Google obviously sees additional revenue streams in adding banner ads to its program. Most of Google's revenue is generated from text ads that it places on its own site and other websites. With the addition of banners, Google will link the ads to keywords selected by advertisers which will then be placed on the web pages where the keywords appear. Marketers will bid for placement, as they always have, paying Google and the site on which the ad is placed, each time a user clicks on the ad. The news of Google's move to accept banners began dribbling out in speculative news reports earlier this week. By this morning, the news had broken; Google briefed a handful of media outlets yesterday. Notably, Mediapost's MediaDailyNews wasn't one of them. It's curious that Google chose not to articulate its shift to an audience of media buyers, planners, and strategists.

Oh, that unpredictable Google.

But CBS MarketWatch.com's McLernon put it best: "Part of Google's job surrounding its business and its IPO is to tease and confuse and keep us on the edge of our seats, and they do a wonderful job of that."