Google and Internet Advertising

Google and Internet Advertising

Todd Gardner
Technology Architecture Journal
http://eajournal.wordpress.com/

Copyright © 2009 Todd Gardner All Rights Reserved

Agenda | Google and Internet Advertising
• The Internet Ad Market

• Google Corporation

• Products and Services

• The Future

Todd Gardner http://eajournal.wordpress.com

• The Internet Ad Market • Growth
• Supply and Demand
• Google Corporation • Segmentation

• The Future


Growth | Market Size
$7,000

$6,000

$5,000
$ Millions

$4,000

$3,000

$2,000

$1,000
Global Internet Advertising Revenue, By Quarter
$-
2000

2001

2002

2003

2004

2005

2006

2007

2008
Source: IAB Internet Advertising Revenue Report 2008 Q2, October 2008

Todd Gardner http://eajournal.wordpress.com Google and Internet Advertising > Internet Advertising Market

Growth | Push and Pull Marketing
-60% -40% -20% 0% 20% 40% 60% 80% 100%

Internet
Marketing

Mobile
Pull

PR
Events
Direct Mail
Push Marketing

TV
Print
Out of Home
Radio
Source: booz&co. Marketing and Media Ecosystem 2010, October 2008


Growth | Ad Conversion Efficiency
Advertising Share of Spending Cost per Conversions Ratio of
Channel Spending (Millions) Conversion (Millions) Conversions
Internet 7.59% $11,310 $6 1885 17%
Radio 7.17% $10,690 $7 1527 14%
All TV 43.24% $64,430 $18 3579 33%
Magazines 20.36% $30,330 $11 2757 25%
Newspapers 18.94% $28,220 $26 1085 10%
Other 2.70% $4,020
Total $149,000 10834
Source: Ad Age, How 2007 US Ad Spending was split by Medium, Jun 2008
Source: Wiki-Invest 2006 CPM Rates


Growth | Ad Conversion Efficiency
Spending Share Ratio of Conversions

45.00%
40.00%
35.00%
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%

Internet
Radio
All TV
Magazines
Newspapers


Supply and Demand | Demand
$11,310,000,000 US spend per Year on Internet Ads
Entertainment
Consumer Goods Retail
Media

Leisure Travel

Telecom Financial Services

Automotive Computing


Supply and Demand | Supply
AOL Adbrite

MSN
Unique Users per
Server Month Share
Google
Google 1,107,489,739 35.87%
DoubleClick 1,079,203,140 34.95% Yahoo
Yahoo 362,201,931 11.73%
MSN 309,290,121 10.02%
AOL 156,109,326 5.06%
Adbrite 73,446,676 2.38%
Total 3,087,740,933 DoubleClick

Source: Attributor Market Survey, March 2008


Segmentation
Sponsorship Email
Digital
Video
Format Share
Rich Media
Search 44%
Lead
Display Ads 21%
Generation
Classifieds 14% Search
Lead Generation 7%
Rich Media 7%
Classifieds
Digital Video 3%
Sponsorship 2%
Email 2%
Display Ads



• History
• Google Corporation • Strategy
• Financial Performance
• Strengths/Weaknesses
• The Future


History | Stanford Backrub
• Larry Page and Sergey Brin Meet
1995

• Search Engine Backrub Launches
• Introduction of PageRank
1996

• Google is born
• 10,000 searches per day
1997

Todd Gardner http://eajournal.wordpress.com Google and Internet Advertising > Google Corporation

History | Start-up Venture
• $100,000 in initial
funding
1998

• Began selling search
keywords
2000

• Offered at $85 per share
• 22,351,900 shares traded
2004


History | Acquisitions
54 Acquisitions since 2001
• These acquisitions provide:
– Data (content)
– Users (customers)
– Technology (software)
– Developers (employees)


Strategy
Mission: Organize the world's information and
make it universally accessible
Principles:
• Focus on the user
• You can make money without being evil
• Provide the most relevant results possible


Financials | Revenue and Net Income
25,000

20,000
21,796
$ Millions

15,000
16,594

10,000
10,605
5,000 6,139
4,227
4,204
3,077
1,465
0
2001 2002 2003 2004 2005 2006 2007 2008
Source: Google SEC Filings


Financials | Employee Performance
1200 25000 Ending
Revenue Per Employee
Permanent
Net Income Per Employee
1000 Headcount
20,222
20000
800 16,805
15000
$ Thousands

600
10,674
10000
400
5,680
5000
200 3,021
284 6821,628
0 0
20012002
2003 2004 2005
2006 2007
2008
Source: Google SEC Filings


Strengths and Weaknesses
Strengths Weaknesses
• The Google Brand • Non-promotional Model

• Search Relevancy • Ad Click Fraud

• Innovation • The Altruistic Mission

• The Altruistic Mission



• Google Corporation • Google Platforms
• Network Concepts
• Products and Services • Google Advertising
• The Future


Platforms | Index and Search
Mission: Organize the world's information and
make it universally accessible

Todd Gardner http://eajournal.wordpress.com Google and Internet Advertising > Products and Services

Platforms | Geospatial
Index and Search of Geospatial information
combined with direct relevant content creation


Platforms | Creation and Communication
Personal web-enabled solutions to create and share
content.


Platforms | Social Networking
Bringing people together around content and
relationships


Network Concepts | Search Engine
• Links build the Web
• Spiders crawl the Web

• Simulate a crawl with
TouchGraph


Network Concepts | PageRank
[ ]
PageRank(T1) PageRank(TN)
PageRank(A) = (1-d) + d +…+
LinkCount(T1) LinkCount(TN)

Where: 2
6
– TN are all the pages that link to A
– d is the damping factor
2
2
Source: Ian Rogers, Google PageRank White Paper, 2002


Network Concepts | SEO and SEM
SEO
• No Cost
SEM
• Slow
• Hard to Measure
SEM
SEM
SEO
• Recurring Cost
• Fast
• Real-time metrics

Google Advertising | AdWords
Search Results Store
Internet
Users

$ Pay-Per-Click
Relevant
Store
Ads Manager

Intent &
Information
$ Keyword Bid

f(x)

Google Advertising | Google Quality Score
• Ad Relevance Function Keyword
Relevance

• Calculated based on
Search Query Keyword Ad
Relevance
Bid
• Provides Real-Time Quality
Score
metrics to advertisers

Landing Historical
Performance
Page


Google Advertising | AdSense
Content Store
Internet
Users

Content
$ Pay-Per-Click Store
Owner

Relevant Ads
Information
Manager

$
Pay-Per-Click

$ Keyword Bid

Google Advertising | Long Tail of Content

Display Ads
Traffic

Internet Pages


Google Advertising | Long Tail of Content


Google Advertising | Long Tail of Ads

Display Ads
Advertising Budget

Number of Advertisers


Google Advertising | DoubleClick
Unique < 100K 100K - 1M >1M
Server Monthly Unique Users Market Share Market Share
Domains Visitors Visitors Visitors

Google 1,107,489,739 35.30% 91,462 77.28% 71.40% 41.60% 15.80%

DoubleClick 1,079,203,140 34.39% 6,748 5.70% 9.10% 29.90% 48%

Yahoo 362,201,931 11.54% 5,147 4.35% 4.7% 7.3% 16.5%

MSN 309,290,121 9.86% 8,099 6.84% 6.6% 6.3% 12.8%

AOL 156,109,326 4.98% 1,976 1.67% 1.9% 6.5% 5.7%

Adbrite 73,446,676 2.34% 3,575 3.02% 4.1% 7.9% 0.5%

Google Acquired DoubleClick in 2007 for $3.1 Billion

Google Advertising | Advantages
• Relevancy • Scalability
– The user has shown intent – Creation work is done by
the Advertiser
– The user has provided
– Placement is automatic
information
• Network Size • Measurability
– Large potential for – Advertiser has instant
placement metrics on performance
– Google places ad partially
on performance



• Opportunities
• The Future
• Threats
• Next Steps

Opportunities | Mobile
• Android
• Intent and Information
– Urgency
– Location
– Previous Locations
• Ad Sponsored Phones
– Dunn Brothers Example
• Open-Access Spectrum
Todd Gardner http://eajournal.wordpress.com Google and Internet Advertising > The Future

Opportunities | YouTube Premium
• Premium content coming to
YouTube (NBC, MGM)
• Video overlay ads
– Can this be more relevant for
premium content? (buy the DVD)
• Video Content AdSense
– Content producers get paid for
advertising on their video.
• Purchase Content

Opportunities | Google Television
• Google refers to itself as a “Media
Company”
• Established Content Channels
• Established advertising
relationships (Google TV Ads)
• Open-Access Spectrum
• High customer demand for
alternatives to Cable and Satellite

Opportunities | Social Networks
• Not yet successfully
monetized
• Publicity and Brand
Awareness
– The Whopper Sacrifice
• Trusted Network of referrals
and reviews


Threats | Copyright
• Google Indexes Content
• Content has Copyright
– Lawsuits?
– Fair Use?
• Is Google Liable for
other’s infringements
when indexed?
• Multi-media Copyright

Threats | Privacy
• Growing Fear of Google
• Does Relevancy Sacrifice
Privacy?
• Targeted Ads requires
information
• Generational Change in
Privacy Expectations


Next Steps
• YouTube Premium • Tivo – Google
– Full-length content on – Partnership/Acquisition to
YouTube Network get Google TV foothold
– Relevant overlay ads (buy – Experiment with Relevant
the DVD) TV Advertising
• Mobile Investments • Social Network Tests
– Capital Equipment for – Ad experiments on Orkut
Open-Access – Plan for acquisition of
– Carrier Partnerships Facebook

Summary | Google and Internet Advertising



• The Future


Google and Internet Advertising

Recomendados

Recomendados

Mais conteúdo relacionado

Mais procurados

Mais procurados (20)

Destaque

Destaque (7)

Semelhante a Google and Internet Advertising

Semelhante a Google and Internet Advertising (20)

Último

Último (20)

Google and Internet Advertising