Google continues to develop display strategy

12 March 2010

MOUNTAIN VIEW: Google, the search advertising giant, is further developing its presence in the online display market, as it seeks to attract more brands to this platform.

According to eMarketer, the research firm, the ad revenues generated by banners, skyscrapers and other such tools fell 2.3% in 2009, to $4.8bn (3.5bn; £3.2bn), around half the total posted by search.

In an effort to increase the appeal of these formats, Google is aiming to transform the way display inventory is bought and sold, having built a model similar to that employed by Wall Street traders.

As part of this process, media buyers visiting its DoubleClick Ad Exchange can bid for placements on specific websites in real-time, basing their decisions on a wide range of audience data.

The Mountain View-based company reported that over 50 ad networks are currently purchasing display ads using this system.

Rocket Fuel, for example, has utilised this service on behalf of a number of its clients, such as in a recent campaign for Nissan'sInfiniti.

"If you have a formula for calculating the impression, you can be much smarter than everyone else to really home into the audience," said Richard Frankel, president of Rocket Fuel.

Research by Google has also suggested this strategy could benefit media owners, as bid prices were typically 130% higher than the revenues gleaned from selling space to third parties and ad networks.

While Yahoo has boasted a presence in this sector for a much longer period, following its acquisition of Right Media in 2007, its rival's overall strength could have a major impact going forward.

"Google has more firepower right now. I'm convinced that the other key players in the space recognise the risk," said Matt Spiegel, ceo of OMG Digital.

Yahoo has announced it will offer a similar real-time service to that developed by Google, and is also taking a targeted approach to selecting which portals can offer up their inventory via Right Media.

Bill Wise, Yahoo's vp and general manager for advertising platforms, said the company enjoyed a "significant" lead over Google at present.

However, depending on how these competing exchanges develop in the future, it could be that, just as with search, one may come to dominate.

"Once we get past the test phase, it's really a math equation at that point. The numbers don't lie," said Joe Nunziante, associate director at Spark, which buys ads for E*Trade, the financial services provider.

Data sourced from Wall Street Journal; additional content by Warc staff