Google Tests Image Ads, Re-launches Groups

  |  May 13, 2004   |  Comments

Google is testing the delivery of conventional image ads such as banners and skyscrapers in its contextual placements on publishers' sites. The company has also re-launched its Google Groups offering.

Search giant Google is testing a program in which advertisers can run conventional ads, such as skyscrapers and banners, as contextual ads on publishers' sites in its network. The new ad types represent a significant departure from Google's previous text-only offerings.

Separately, Google is also expected to announce Thursday a beta launch of a redesign of its Google Groups offering. The new Groups allows users to form email groups, as well as participate in online discussions. The move toward email is a clear challenge to Yahoo Groups, and it also offers Google more opportunities to deliver text-based ads. No image ads will appear on the new Google Groups, the company said on its site.

On other sites in Google's AdSense network, however, advertisers can now run banners, leaderboards, inline rectangles or skyscraper ads -- all Interactive Advertising Bureau-approved formats. Only .JPEG, .GIF, or .PNG formats, without animation, will be accepted. Everything else about the AdWords platform remains the same.

"We've been hearing from our advertisers that they would like to talk about their products and services in image ads in addition to text ads," said Tim Armstrong, VP of advertising sales for Google. "Our publishers have formats that are graphically oriented in layout and they asked if they could extend what they are doing in terms of text."

AdWords advertisers can elect to run image ads as well as text ads by checking a box and uploading the creative, which they must build themselves. The ads are limited to 50K in size. Google technology will determine where to place the ads, just as it does with text ads. The determination is based on the keywords the advertisers have selected, and Google's analysis of the content of publishers' pages.

In addition, the same technology that ranks sponsored listings in search results on Google's site will compare the click-through rates for an advertiser's text versus graphic ads. The more successful ad format will be used, helping to minimize the risk for advertisers and publishers.

Also, the ads will include a user bar at the bottom of each image with the URL the ad is linked to and a link for users to give feedback to Google.

A Google spokesman said customers have expressed an interest in the ads, but none have yet signed up.

The new ad format aims at increasing revenue for advertisers, publishers and, of course, Google -- which recently filed for what is widely regarded as the mother of all technology initial public offerings.

The image ads will not run on the Google site, and Google representatives said there are no plans to move the ads to Google.com in the future.

The new option offers little risk for bigger advertisers with in-house or outside staffs creating ads for various media already. However, the tens of thousands of small businesses in Google's customer base may find building and uploading ads more of a burden, at least compared to entering text.

"This represents a fundamental shift for Google," said Jeff Lanctot, VP of media for agency Avenue A, a unit of online advertising firm aQuantive. "The ease of use for their ads has catered to the small business user. If it's four people running the business in a basement they can update text links very easily. If they have to create a new graphic ad every time they have a sale, that's different."

Google executives disagreed.

"The images we are rolling out are not animated. It's easy for small businesspeople to build these types of ad formats," said Salar Kamangar, director of product management for Google. "Our expectation is that people will choose to use image ads if it makes sense for the profitability of their campaign."

Google has seen great success with its text-only ads. Along with the site's simple, uncluttered graphic interface, the unique ads are one of many characteristics that help distinguish the company.

Google has pulled off a neat trick with the sizing of the ads. Lanctot noted that a conventional banner ad is the same size as four of Google's standard contextual ads side by side. One skyscraper ad is the same size as four vertical text ads.

Lanctot said the new format "doesn't represent any fundamental shift in the relations Google has with publishers."

For the last year and a half since AdSense launched, publishers have been turning over a portion of their inventory to Google to resell, Lanctot said. "The decision to add images in and of itself isn't that big a deal."

It is true that the new formats will affect the look and feel of the publishers' sites, replacing text with more graphics, he said. "If the graphic ads perform better, it's more money in the publishers' pockets and they will be happy. If it doesn't perform better they will be disappointed and opt out."

Lanctot has been working with Google on the beta test of the new formats. He said Avenue A would be launching ads for clients in the new formats by the end of this week.

Google's Armstrong and Kamangar said there were no plans to use image ads on the Google site. Lanctot said, "I'd be surprised if you ever saw image ads on Google.com."

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