“Google CEO Eric Schmidt hinted in July that display advertising would probably be the next of his company's businesses to generate $1 billion in sales. Analysts say 2010 is the year he'll deliver on that prediction.” (MacMilan)
Online advertising is become more and more popular with companies on the web. It is predicted that display ads will account for four percent of Google’s total sales this year. Because of this, Google is taking action in trying to help marketers increase the effectiveness of their advertisements. I think Google has a very effective game plan in doing so. They are focusing on getting the most out of each of the advertisements they display.
In their plan to better online advertising, Google invested in the display advertising company Teracent. “The startup’s proprietary algorithms automatically pick the creative parts of a display ad (images, colors, text) in real-time determined by like geographic location, language, the content of the website, the time of day or the past performance of different ads.” (Rao) While marketing is a very important component of sales, advertising is very important component of marketing. The producer must always be focused on the right aspects of a marketing plan when advertising. This investment was a very good decision on Google’s behalf because by improving the quality of the advertisements and making them more specific to each and every customer, they will be more effective in generating sales.
Another thing Google has done to help advertisers is offer them Campaign Insights. The company Hair Club was the first to test out it out. Hair Club “ran banner ads for its hair replacement services across hundreds of Google's partner sites while Campaign Insights tracked the number of people who had seen the ads and then performed related Web searches.” (MacMilan) This new technological tool allowed the company to see the quantified, factual results from their advertisements. The company was then able to reevaluate their spending on online advertising. Based on the information they received from Campaign Insights, Hair Club made the decision to increase the amount of money allocated for these advertisements.
Although Yahoo earned a much larger revenue than Google last year when it came to display ads, Google has the upper hand in supplying marketers with the services provided by Campaign Insights. It costs them much less and is much easier for them to perform these services than it would be for Yahoo. While this is true for now, it will not be long until Yahoo comes out with a tool similar to Google’s Campaign Insights. For this reason, Google should continue to invest money and research not only into bettering advertising techniques and creating new ones but also into analyzing the results produced by these strategies. Better ways to analyze advertisements with provides marketers with a better understanding of how to improve them. With better advertisements, companies will see an increase in sales. Companies will acknowledge this by spending more money on advertising and in turn, Google will also experience an increase in revenue.
MacMilan, Douglas. “Google Acquires Teracent To Apply Machine Smarts To Display Ads”.BusinessWeek. 8 February 2010. Web. 10 February 2010.http://www.businessweek.com/technology/content/feb2010/tc2010027_356976.htm
Rao, Leena. “Google Acquires Teracent To Apply Machine Smarts To Display Ads”.TechCrunch. 23 November 2009. Web. 10 Feburary 2010.http://techcrunch.com/2009/11/23/google-acquires-teracent-to-apply-machine-smarts-to-display-ads/
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