Google to Focus On Foreign Advertisers

04 May 2004

Google has told potential investors it sees the next big opportunity for advertising growth among overseas advertisers.

The preliminary prospectus for the internet search engine's upcoming IPO [WAMN: 30-Apr-04] indicates that although non-US ad revenues are growing fast, they lag the near-exponential rise in the number of international users.

Advertising now accounts for some 96% of Google's total income. Overseas ad revenues have risen from 14% of total ad income in 2001 to 21% in 2002. In 2003 they increased by another 26%; and in Q1 this year by a further 30%.

Numbers that most media-owners would die for. But as Google notes: " More than half of our user traffic [comes] from outside the US. We expect that international net revenues will continue to grow as a percentage of the total."

The interim prospectus also highlights the leading role played by Google in boosting internet advertising. In 2001 the company's ad revenue reached $86.4 million; it quadrupled in 2002 to $347.8m; and almost tripled in 2003 to $961.9m.

Rishad Tobaccowala, head of digital advertising at StarCom MediaVest is an unabashed fan of Google-style ads. He enthuses: "What a search engine basically says is: 'You put your hand up and say I'm interested and we will give you this message'."

And another plug for Sergey and Larry's Excellent Adventure, this time handed down from Mount Olympus. Google's IPO will be "good for us," opines WPP Group's Sir Martin Sorrell, referring to the medium's ability to deliver 100% measurable results.

Data sourced from: Financial Times; additional content by WARC staff