2010: The Year of the Display Ad for Google?

This could be the year of the display ad. That's not to say that display ads aren't prevalent every year, but Google has only been involved with that for a little while, and if analysts' projections are accurate, this will be the year that Google's display ad business tops $1 billion in sales.

Last summer, Google CEO Eric Schmidt suggested that display ads would be Google's next big billion-dollar business. According to BusinessWeek, a Barclays Capital analyst says display ads will account for about 4% of Google's total sales in 2010. This would be a 40% increase from their contribution in 2009. BW's Douglas MacMillan reports:

Sales of video and banner ads on YouTube, the world's most popular video site, are expected by analysts at Barclays to contribute the bulk of Google's display revenue this year, about $700 million. And with DoubleClick, Google acquired a technology that handles the placement of display ads on sites across the Web. "Display is now a key business for us," says Susan Wojcicki, Google's vice-president of product management and one of the company's earliest employees.

Neal Mohan, the executive in charge of Google's display business, says Google will draw on its strength in search-related advertising to expand in display. It became the leader in search by using algorithms to help it know which ads to place where. "Our goal is to bring the science of search to the art of display," Mohan says.

Advertisers will probably not be shy about getting on board with that. "Research has shown that exposure to both search and display ads from the same advertiser results in a 22 percent increase for conversion rates over search alone," Rich Kahn, CEO of display ad provider eZanga told WebProNews last year.

Back in November, Google announced its acquisition of Teracent, a provider of "intelligent dynamic display advertising". It provides machine-learning algorithms, which can create customized display ads based on thousands of different creative elements.

Google says the one on the right was created with Teracent's technology.

"Teracent's technology can pick and choose from literally thousands of creative elements of a display ad in real-time — tweaking images, products, messages or colors," Google said. "These elements can be optimized depending on factors like geographic location, language, the content of the website, the time of day or the past performance of different ads."

Before that announcement, Google launched a tool to measure the impact of display ad campaigns across the Google Content Network called Campaign Insights, which Google says can give reliable data about how a campaign has raised brand awareness or active user interest in a particular product or service. Google has also repeatedly added new templates  for advertisers to use when constructing their creative.
 

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Google Gets a New Real-Time Infrastructure for Display Ads

Google just announced that it is acquiring Teracent, a provider of "intelligent dynamic display advertising." The company considers itself a pioneer in dynamic ad serving and optimization solutions. Google appears to agree.

Teracent provides machine-learning algorithms, which can create customized display ads based on thousands of different creative elements. The infrastructure Teracent brings to the table allows for real-time assembly of dynamic ads. It's designed to determine the optimal selection of each ad element and return it based on the objectives of the campaign.

"As you know, we've been busy releasing new features and products to help improve display advertising on the web for everyone," Google says. "We believe that Teracent's technology fits neatly into these efforts."

Google says the one on the right was created with Teracent's technology.

"Teracent's technology can pick and choose from literally thousands of creative elements of a display ad in real-time — tweaking images, products, messages or colors," the company adds. "These elements can be optimized depending on factors like geographic location, language, the content of the website, the time of day or the past performance of different ads."

"The infrastructure, opportunities and technical depth that Google will provide for Teracent customers means a future of product innovation for Teracent's dynamic ad optimization platform," Teracent says in their own announcement.

Google says the technology can help advertisers get better results from their display ad campaigns, while enabling publishers to make more money from their ad space.

Teracent's technology will be available to all Google advertisers running display ads, including DoubleClick clients. The deal is expected to close this quarter, subject to various, but unnamed closing conditions.

Integration details will be announced after the deal is officially closed. Financial terms were not disclosed.

Have You Read This?

> Does Size Matter in Display Advertising?

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Google Aims to Put the “Friend” in Friend Connect

Google has launched some new features for Google Friend Connect, aimed at letting site owners make their GFC experience more personalized and letting their visitors get to know each other.

A representative for Google tells WebProNews that 9 million sites are using Google Friend Connect, and pages with GFC get over half a billion unique visitors a month. Two people join every second, she says.

One of the new features is an "Interests" section, which lets a user add "site-relevant" questions that people can answer when joining their site or through Google's poll gadget.

"For instance, if you have a music website, you might ask people to share their favorite bands, the last concert they attended, or where they discover new music," explains Google Friend Connect Product Manager Mussie Shore. "Or if you run a hiking site, you can ask them about a favorite hike or national park. The details people share are added to their Friend Connect public profiles for your site, which are seen by other site visitors. This way, your visitors can learn more about each other in the context of the interests that bring them to your website."

People can also now send private messages to each other through Google Friend Connect. Another new feature is the "community data" section, where people can share interests on your site in chart form.

There is a new "Newsletter" section that lets you create, send, and manage newsletter and a personalized content gadget, which automatically presents a dynamic set of links to your site's content that matches a visitor's specific interests.

Finally, if you display Google ads on your site, there is a new "AdSense" section in your Google Friend Connect account, which lets you enable the ad units that are matched both to your site's content and to the interests users publicly share on the site.

Google points to huffingtonpost.com, metrolyrics.com, sfstation.com and pachakam.com as example sites that already show off the new features of Google Friend Connect. You can check these out to get an idea of how they work.

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AdWords More Competitive, AdSense Publishers Could Earn More

Google announced plans to give AdSense publishers a new way to generate revenue by allowing multiple Google-certified ad networks to compete for display ad space on their sites. This means that AdWords advertisers may end up having to pay more competitively, while AdSense publishers could reap the benefits.

What do you think of this idea? Comment here. Google explains the concept in the following video:

"You may remember that we began to accept display ads served from qualified third-party vendors over a year ago, which helped increase the number of display ads competing on AdSense publisher sites," says Google Business Product Manager Sean Harvey. "With this new change, participating ad networks can also bid in our auction to appear on AdSense sites. This new capability will help you generate the most profit for every ad that appears on your site, whether the ads come from AdWords advertisers or Google-certified ad networks."

The networks themselves are ad agencies and companies that partner with advertisers and publishers to buy and sell ads on sites they don't own. AdSense publishers will now be able to allow advertisers from these networks to compete directly with AdWords advertisers for their ad space. The ad networks:

- Connect advertisers with publishers

- Provide access to additional inventory not currently available with AdWords

- Adhere to Google's standards for user privacy, ad quality and speed

Reporting and payments will still run through AdSense as always, and available ad formats will remain the same as they have been for AdWords. Publishers will still have control over which networks can show ads on their pages, and they can choose to opt out of receiving ads from specific networks, or all networks.

Right now, the feature is only available to publishers in North America and Europe, but Google plans to rolling out to more places in the future.

What do you think about Google increasing competition by allowing ad networks in AdWords? Share your thoughts.

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