In a move that publishers and advertisers alike have described as "inevitable," Google, Inc. said it will now serve Internet Advertising Bureau (IAB) standard banner ads in addition to text ads, as
part of its AdSense and AdWords programs.
The new advertising feature will not be available on the Google Web site, although Google executives admitted that it is a possibility in the future.
The new feature is for content publisher sites only, not search engines.
Contextual placement on participating publisher sites accounted for 21 percent of Google's net revenue in the first
quarter, a 12 percent increase over the same period last year. The new move suggests that the Mountain View, Calif.-based company is serious about establishing an early toehold in the rapidly
evolving contextual marketing sector.
As an extension of the AdSense for publishers and AdWords for advertisers programs, Google will link the new image ads to keywords in the same way it
handles text ads. Advertisers will then bid on keywords for placement across Google's extensive network of content publisher Web pages. Google executives say the display ad formats will consist of
the top four IAB standard ad formats; file sizes will initially be limited to 50 K.
Salar Kamangar, director of product management, Google, says there will be no additional premium for the image
ads; all advertisers have to do is opt-in to the program and supply Google with the creative. Publishers must opt-in also and decide which ad formats to accept. Kamangar said the decision to add
image ads came at the behest of several advertisers looking for a way to expand upon Google's text ad program.
While the addition of display ads offers advertisers the ability to have a kind of
Google marketing mix, advertisers will have no control over when, where, or if their graphical image ads will be shown. Lack of advertiser control has been a source of frustration in the past for
Google's AdWords customers.
According to Kamangar, Google's AdWords ranking program will determine whether image or text ads will perform better based on an analysis of previous ad performance.
An automated AdSense program will then determine keyword relevance, and the best match will be served. Kamangar says that each display ad will be the equivalent of four text ads. Google will decide
whether four text ads perform better than a single display ad. "We'll only show image ads where they will deliver more clicks than text," Kamangar says.
Also, Kamangar says that each display ad
will be scaled back a bit in order to place two small pieces of text underneath the creative--one will show the company's URL, and the other is for user feedback.
On Thursday, beta-testing for
the new format became available to Google's advertisers and content publishers. Kamangar says that Google will evaluate whether to expand the file size offerings.
Interactive media services
provider 24/7 Real Media took issue with Google's new move, issuing the following statement: "Google is taking value from the publisher and choice from the advertiser. They have decided that an ad
that doesn't generate a click has no value, which sets the industry back to 1999 when the click was the gold standard for online advertising."
Scot McLernon, executive-vice president, sales and
marketing, CBS Marketwatch.com, says that while his site has a good working relationship with Google and AdSense, it will not opt-in to the new feature. He says the new offering stands to benefit
"lower-tier" publishers and others who may have unsold inventory.
"For sites that are in the Google network that don't have a consultative multi-component approach, it probably makes a lot of
sense," he says, noting that Google's decision to add image ads was a "natural gravitation."
"It was inevitable," McLernon says.