The Pros and Cons of the Google Network

Google is headed full steam into display advertising with its Google Network. The search engine is offering a full array of online media products, including regular GIF and Flash banners (image ads in the AdSense network), streaming video ads, and rich media ads (Google Gadgets, currently in beta). Through its AdSense network, Google has basically created a huge network of sites. Now its reps are actively selling CPM (define) based banner and video ad packages to clients and agencies alike. These are also available to self-serve clients, of course.

Google claims it’s now the leading ad network on the planet and its total advertising solution (search, search partners, and content sites participating in AdSense and the network) is the largest media property. Some other stats it’s reporting: a reach of over 88 percent (of Internet users, one assumes);.5 billion-plus page views a day on the network; and 706 million visitors per day to the network.

This is undeniably impressive. With the simple terminology and product packaging change, the search engine has turned AdSense image ads into the biggest ad network on the planet. You can buy ads on a CPC (define) basis or bid on CPM levels for a standard or customized site network. It can also target premium pages and sites within the network, but in those cases CPMs go way, way up.

Right now, there seems to be more good to this than bad, let’s look at both sides of the coin.

The Pros

The Google Network has some cool features that should concern its competition. For starters, it can disclose the sites you run ads on and report performance on a site-by-site basis. This enables you to focus buys on those sites (inventory allowing). An inability to see where your ads appear has always been a barrier for some advertisers.

For sites you really like, you can focus funds on premium-site and home-page buys (remember, though, CPMs go up exponentially). And unlike other networks, Google’s contains very high profile sites as well as a robust business-to-business (B2B) technology vertical, an area in which most networks are very weak.

The programs are run through the AdWords interface with similar bidding models that allow you to turn up the juice incrementally. With this interface, Google is really delivering on its promise to provide advertisers with a convenient, one-stop online advertising shop. (This is a negative rather than a positive to many, however.) In addition to pricing control, you can choose CPC for content targeted banners and video and CPM for vertical network targeting or specific site and page targeting.

You can run a wide variety of ads through the network, especially if you do it in conjunction with search. Formats include AdWords text ads, GIF and Flash banners, video ads, and rich media ads. Video ads come with easy-to-use templates and can be purchased on a CPC basis as part of your AdWords with content targeting or on a CPM basis as a network buy.

Pricing seems reasonable for now. Clicks range in cost if you choose CPC, and the network CPMs are pretty low, especially for run of network (RON) or run of a certain vertical. CPMs seem to be on par with the major networks: under a dollar for RON, over a dollar for verticals, and $5 and up for premium placements.

The Cons

One drawback is there are no inventory level guarantees. This is true of any network, but with Google it can get even more difficult as you can’t reserve inventory (expensive home page buyouts aside). A bidder can bump you out of certain placements by bidding higher and raising his maximum CPM.

Another drawback is your campaigns can’t run creative off your banner servers, so you must run multiple tracking platforms or use click tracking with your preinstalled banner-serving platform, then manually bring the reports together. This is just as well, though, because serving fees for rich media and video can often double the cost of the Google Network CPMs. Better to just let Google serve them. It’s extra work, though. A lot of shops lack the skills to pivot or integrate large mounds of data into a simple-to-view dashboard.

Finally, the great deals we see now are sure to evaporate as competition for performing placements, vertical channels, and premium sites heats up. The whole bidding model is likely to create a situation that mirrors what happened with keyword search when good keywords became enormously expensive.

This will actually make the Google Network more attractive to AdSense member sites and limit their inventory to other networks. As a result, all network impression inventory prices could rise faster than they would have in a non-bid CPM environment. Not only will the bidding quickly drive up CPMs in the Google Network, but other networks, such as BurstMedia, Advertising.com, and ValueClick, will have to pay more for inventory to compete.

As with so many things Google does these days, the network has the potential to squelch competition. In the long run, prices will go up. Also, Google’s control of DoubleClick’s Dart for Publishers will give it unprecedented access to premium sites. It’s sure to leverage that event more in the future to the benefit of the network (see “Pros and Cons of Google and DoubleClick“).

Conclusion

Like any other online marketer, I have a certain amount of anxiety about Google getting into new areas and potentially dominating every facet of online marketing. It can be a little scary. No one wants to be beholden to one organization. But for firms like mine, which tightly integrate search and online media, Google Network’s potential is pretty great. Since we already manage our clients’ AdWords accounts, we’re the most likely candidate to manage all campaigns running through Google’s platform.

I must confess, at this moment our firm loves the idea of the Google Network and that for now, our excitement over what can be done with Google for our clients far outweighs any insecurities we might have about Google’s hegemony.

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