Google’s “win-win and win” situation

eMarketer, Inc. recently released an estimate that Google is on pace to take the top spot in US display ad revenue in 2012.

This would earn Google its first digital advertising triple crown: leadership in US paid-search ads, mobile ads, and now display ads.

According to the Wall Street Journal, “Advertising executives said the eMarketer estimates are something of a surprise given that Google is best known for its search ads.”

Not me — no surprise here. I oversee a digital ad budget and have seen the shift to Google mobile and display ads firsthand.

However, the news has made me think about why Google is outpacing its rivals.

Clearly Google has made large, well-known investments that are fundamental to its growth beyond search ads, such as the purchases of DoubleClick and YouTube and the creation of an ad network (enabling it to sell ads across a stable of third-party websites).

But from my experience there are also numerous things Google does at a practical level that are less headline grabbing but which are relevant to people who decide how to allocate digital ad budgets.

Google’s approach to video ads – a fast-growing segment of the display ad market – offers a great product-level example of many of these things, including:

1)   Easy to justify a test budget

While other video ad pitches were based on TV tradition, Google offered an alternative: ads that viewers can skip by choice and which advertisers only pay for when not skipped.

If I only have to pay when a viewer actually watches the ad, why not run a test campaign?

2)   Easy to advocate

The ‘no play means no pay’ model also makes it easier for digital ad managers to sell the relatively new concept of online video advertising to internal stakeholders.

“We only pay when someone chooses to watch our full 30-second ad” is a very convincing statement and allows the person saying it to speak confidently.

3)   Easy to implement

Campaigns are quickly initiated and implemented in the AdWords system, using the same log-in many advertisers already use for paid-search ads.

Google also offers a lot of ‘how to’ information – how to set up campaigns and define audience targets, etc. – including helpful tutorial videos.

4)   Easy to like the end-user experience

If users can select whether or not to watch your video ad, then those who view it are much more likely to do so in a positive and more receptive mindset.

Offering a better user experience is one-third of the user/advertiser/company “win-win-win” that Google first embraced when it introduced the notion of relevancy to paid-search ad rankings many years ago (as opposed to simply selling to the highest bidder).

Heaven help the yahoos

In my opinion it’s difficult to see how any competitor will slow Google’s growth in the major digital-ad categories.

The competitive advantages gained from owning and integrating ad technology’s murderers row – DoubleClick, YouTube, AdMob, etc. – are obvious.

It’s also obvious that the company is committed to, and invests heavily in, innovation.

And unlike many other examples in corporate history, there’s no sign that the access to resources and/or its past achievements engender complacency at Google.

In the case of video ads, YouTube is 20x larger than the world’s second largest video platform but that hasn’t stopped Google from offering innovative ad products and then continuing to tweak them for improvements (and recently increasing the number of format options from two to four).

Google’s competitors are, of course, beyond aware of these topics.

But in my experience as an ad buyer, there are important things Google does that its competition doesn’t fully grasp, such as how much better Google’s account teams are at partnering with large clients and selling new opportunities.

Nor this simple reality: how much easier Google makes it for me to give them more of my advertising money.

11 thoughts on “Google’s “win-win and win” situation

  1. The eMarketer estimate is a quick read, but in case it’s helpful, some takeaway stats about the US display ad market from the report:

    – They project the overall market will be +21.5% this year vs. 2011

    – Google’s display ad revenue will be +38.5%. Facebook continues to grow, but at a slower pace of +24.4%

    – Facebook overtook long-time leader Yahoo! last year, but only held the top spot for a short while

    – Yahoo!, Microsoft and AOL are on a downward trajectory, all losing market share to Google and Facebook

    – The eMarketer report highlighted “increased spending on digital video advertising, especially YouTube” as one of the key drivers of both Google’s growth and the growth of the US display ad market overall.

    Read more at http://www.emarketer.com/newsroom/index.php/google-display-ad-leader/

  2. Great article, Josh! To “yes and” you … social scientists will no doubt look back on YouTube as one of the most significant social impacts of our time (not just as a video sharing medium). It’s influence is so pervasive that I feel the channel is often glossed over.

    • Dean, thanks very much for the positive feedback and the added perspective. The democratization of fame (removing the need for traditional gatekeepers / talent judges) is certainly a part of what you’re saying.

  3. I’d add one more reason: easy to justify further spending based on ROI results.

    In a world where marketers are constantly asked to justify spend, having a test budget is just the beginning. Tools are needed to quickly and easily report out the results of a campaign, thereby giving a marketer enough information to decide whether or not to continue.

    After all, Google’s objective isn’t to get a marketer to commit to a test. It’s to get the marketer to consistently spend.

    • Thanks, Phil, that’s a good addition. I was focused on the initial budget allocation and gaining stakeholder acceptance for new programs, but you’re right, that’s just the start.

  4. Great summary Josh. From an advertiser perspective, Google makes the system easy and intuitive to use where the others are clunky at best. Also, Google always has something in beta to develop new features, while Bing’s newest development is the use of Sitelinks (http://searchenginewatch.com/article/2216859/Bing-Introduces-Sitelink-Extensions-in-PPC-Ads) which Google has had for years. Google leads in all these areas, and by a relatively wide margin that doesn’t appear to be closing at all. Frank

  5. I was curious if you ever thought of changing the structure of your site?
    Its very well written; I love what youve
    got to say. But maybe you could a little more in the way
    of content so people could connect with it better.

    Youve got an awful lot of text for only having 1 or 2 pictures.
    Maybe you could space it out better?

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