Multi-tasking Google: A Message to Wall Street and Madison Avenue

September 26, 2010 § Leave a comment

Google is going to erect a 35*13 feet billboard on Times Square next Wednesday, showing a Webpage with the words “Display ads are big. They are gonna be huge”. The advertising about advertising features Google’s recent effort to boost its display ads which include image, audio and video, as well as investor’s confidence that Google has plenty of undeveloped potentials.

The internet search engine has long been recognized as a success on search ads (the crude four-line text ads shown on top right corner, which are easily taken as spams), but not so much its display ads, which accounts for almost 40% of ads Google shows, even though those ads are on Youtube and millions of other websites.

Google is now determined to break the stereotype of its reliance on search ads and establish an image of multi-tasking Google. Even though display ads has been around for decades, it is still a core business strength for Google. “With years of significant investment, display is now very much a core business for Google. As an industry, display is at the beginning of an unprecedented growth spurt. We wanted to explain how we’re focused on making it even better, and to show agencies and marketers how many new opportunities there are for them today,” said Rob Shilkin, a spokesperson for Google.

The display network being promoted is focused on three aspects, simplifying display advertisement, delivering better performance (creative branding campaigns, precise targeting and so on) and making display ads more accessible to businesses of all sizes, according to Neal Mohan, the vice president for product management for Google.

The internet company’s creative minds are trying to add some momentum to the stagnant business. According to Barry Salzman, managing director of media and platforms at Google, its display ads come in great varieties: mobile ads, expandable ads, mini-Web-site ads with slide shows and interactive features.

Given Google’s existing comparative advantages, an audience that constitutes almost half of global internet users (according to Alexa.com) and a vast pool of clientele including high-profile companies such as Ford, Kodak and Armani, it’s almost going to be effortless for Google to crowd out other potential competitors and gain more share of a market that has considerable room to grow. It might be a quick fix to reassure investors of its innovation capability, however, is it going to work equally well in the long run?

Call me a pessimist. But as a loyal user of Google, don’t you want to get excited about some new brilliant ideas that Google comes up with, rather than just see it rack its brains and finally come up with a plan, only to find that it decides to drain the same old well, taking advantage of its oligarchy status to put other promising advertising start-ups out of business? “Innovations” like this do not need to be on the to-do list of Google. Other companies may do the job as well.

The conglomerate is at full throttle in its effort to demonstrate that it’s got potentials. This display ad campaign does help. But I’m sure Google can do better than that.

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Question:

In the NYT article, Sandeep Aggarwal said, Google is also playing offense, trying to get a piece of a market that has lots of room to grow even though display ads have been around for more than a decade, first as pop-up and banner ads, and now as ads of different sizes that mix images, text, audio, video and animation. (Google also counts text ads that appear on Web sites other than search results pages as display ads.) Brand advertisements like these make up two-thirds of the total advertising market but just one-third of the online ad market.

If brand advertisements=x, then total advertising market=1.5x, online ad market=3x. Conclusion: online ad market > total advertising market.

It might be right if the two categories do not overlap. However, since they both include brand advertisement, I’m guessing the answer is negative. Is there something wrong with the statement or any misunderstandings for my part? Or am I just so bad at maths?

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