Search Engines
Google rolls out new online ad program
By Reuters

Internet search company Google Inc unveiled an automated online advertising program that expands its ability to place targeted ads in Web site content in addition to linking promotions to search-engine results.

With its move Google joins Sprinks, a property of magazine publisher Primedia Inc, in staking out the market for content-targeted Internet advertising.

The new service automatically identifies the focus of a Web page identified by Google's search engine, then serves up links to relevant advertisers' sites in a prominent area on that page.

The program, rolled out last week, will be free until March 12 and then will cost advertisers the same as Google's paid-listing service that links ads to search results, said Susan Wojcicki, Google's direct of product management.

Mountain View, California-based Google said in a statement the new service would make "Web pages more useful by replacing untargeted ads with relevant sponsored links."

To that end, Wojcicki said, "We're working with Web sites that otherwise would have been selling banner ads."

Google Web advertising rival Overture Services Inc. -- which recently bought two search engines -- last week said it would invest $10 million to $12 million on products that provide local search and contextual advertising, a plan that also could put it in the game.

Industry analysts said any pickup in ad business by Google and other search engines could come at the expense of Internet ad company DoubleClick Inc, a provider of technology for serving up targeted ads, and 24/7 Real Media Inc, which connects media buyers and sellers and gets around 25 percent of its revenue representing Web sites in media buys.

A DoubleClick spokesman declined comment, while 24/7 Chief Executive David Moore said he saw Google as a partner.

"They could become a competitor," said Moore, who added that his company recently brokered a deal that put Google's new content-targeted ads on WomensForum.com.

Growing ad network
On another front, Google said that 100,000 advertisers had set up accounts with the privately held company, which does not disclose financial details.

Overture, which declined comment through a spokesman, said in a recent release that its active paying advertisers numbered 80,000 and that its 2003 revenues should be over $1 billion.

"Content targeting gives our advertisers more reach," Google's Wojcicki told Reuters.

Page Zero Media Principal Andrew Goodman, agreed.

"I think it's a huge development in how far Google potentially will reach," said Goodman, whose Toronto consulting firm focuses on search engine marketing.

While Google is best know for its search engine, the company's fortunes have risen with its so-called "paid-listing" services that give ads prominent placement among search results and help advertisers closely track campaign results.

Advertisers using paid-listing services from Google or Overture bid to place their ads -- which look like Web search results and are organized under a heading such as "sponsored links" -- at or near the top of the Web-search results screen.

Advertisers pay when Internet users click on their paid listing. The more prominent the placement of paid listing, the more the advertiser pays per click.

Google's current search partners include AOL Time Warner unit America Online, Ask Jeeves Inc and the Washington Post Co.

Google said it already is serving up its content-targeted ads on Web sites owned by Knight Ridder Inc, the parent company of such newspapers as the Miami Herald and the San Jose Mercury News.

Such ads also appear on HowStuffWorks.com and the company's own Google Groups search site for online newsgroups.

Analysts and ad brokers wondered whether Google's content-targeted paid listings would generate more clicks than more traditional ads.

Goodman and others interviewed for this story said paid-listings may be more effective with search results because search engine users are looking for something specific, while Internet content users are in a different frame of mind, and might not want to leave a Web page they are currently using.

As for Google's claims that the rate of sales to clicks is the same for search-based ads and content-based ads, Goodman said: "This has yet to be seen."

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