Google eyes display ad boom

24 May 2011

MOUNTAIN VIEW: Google, the online giant, believes display advertising could reach a value of $200bn (€142bn; £124bn) worldwide, encouraged by factors like real-time bidding and greater digital integration.

Neal Mohan, the company's vice president, display advertising products, has predicted the sector's global sales might expand almost ten times over if the correct strategic decisions are made.

"Our belief is that by Google's participation we can grow the overall display advertising pie," he told the Financial Times.

"The fundamental problem we are trying to solve is how do we get from a $24bn industry to a $200bn industry in a few short years."

As well as helping Google stimulate demand beyond its main area of income, paid search, Mohan suggested achieving such a goal would boost the whole media sector.

"I truly believe that $200bn is the opportunity. We think there is a tremendous opportunity not just for Google but for the industry," he said.

According to Mohan, the quantity of ads acquired via the firm's DoubleClick exchange has trebled during the last 12 months.

Research supported by Google revealed that publishers featured in this network had enjoyed a 188% lift in related revenues as a consequence.

Mohan further argued the possible benefits for marketers may include cutting the cost of buying online ads from 28¢ per $1 invested to only 2¢.

One central objective will be providing brand owners with cross-channel solutions across the various evolving digital mediums - overcoming a "big barrier" to progress.

"The world is extremely fragmented, with the proliferation of devices, mobile apps and websites, there is infinite fragmentation," said Mohan.

"A lot of media dollars are destroyed through fragmentation and inefficiency, there is a lot of wastage and campaigns are less effective."

"Our approach is how to be an end-to-end platform in the market."

Google recently unveiled a "+1" tool letting netizens recommend search results, and Mohan forecast "social signals and social ad formats" would become "interesting aspects" of display.

Another likely growth driver is real-time bidding, whereby agencies instantly purchase inventory, which can be selected based on information such as the interests or location of the target audience.

"I have never seen a technology get adopted in this industry as fast as real-time bidding and I have seen dozens and dozens of technologies," Mohan said.

Alongside fuelling the more widespread automation of digital media buying, it is anticipated that the convergence of linear television and the internet might allow Google to exert a broader influence.

However, although some concerns have been expressed about the potential impact of these shifts on the TV sector, Mohan asserted the aim was not to simplify, but to improve effectiveness.

"A lot of stuff is said generally in the market," he said. "It is not just an automated system where you hit the button and it does its thing."

"When I've had conversations with publishers with TV and video content they want a platform that can extract value."

"When it actually comes down to a conversation with the person responsible for revenue they say 'Google, what can your technology do?'"

While Google has considerable leverage due to its expertise in delivering advertising premised on bespoke preferences, Mohan also stated clients, agencies and publishers are all going to play a key role.

"We don't own inventory, we are not a media company. We can't execute unless [they] buy into it and adopt it," he said.

Data sourced from Financial Times/Media Guardian; additional content by Warc staff