Tuesday, May 18, 2004

Online Ad Networks Irked by Google's Move to Display Ad Format

The story on Cnet's News.com site says that Google's move to extend its AdSense program to include richer display ads and charge advertisers only when a user clicks on the ad has "irked other online ad networks specializing in display ads". (Note, display ads is the new term for what used to be called banner ads.) Well, being irked is understandable, but any online ad network that is surprised by this move hasn't been paying attention. Moving to richer formats for AdSense ads that appear on Web sites is a natural evolution for the AdSense network. AdSense may have started life as an offshoot of AdWords (Google's ad program that lists ads on search results pages), but it quickly became apparent that the requirements for a successful AdSense ad generally differed from those of an AdWords ad--in terms of placement, content and format. Competing display ad networks fear that Google's approach of continuing to charge on a PPC (pay-per-click) basis will harm the market that charges for display ads on a CPM (cost per thousand impressions or eyeballs) basis. This grumbling sounds like fear and trepidation to this analyst. If PPC is a preferred sales model, then the ad networks will have to offer a PPC option. Better yet, competing ad networks should work on differentiating themselves from AdSense, in terms of service, assurance of placement on desirable Web sites, assistance with creative, tracking, and other relevant elements. Google now officially refers to AdSense as an ad network, which again should not surprise any industry observers. However, it should put them on alert to expect further enhancements and growth of the AdSense network.
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