World: Stuart Elliott in America

Just as Wall Street is going gaga over Google, so, too, is Madison Avenue.

Google, the web search engine with the funny name, has revolutionised finding information on the internet, thanks to its huge farms of servers that hasten computer users' quests for everything from recipes to pornography to fun facts about celebrities. That helped Google blow past better-known rivals such as Yahoo! and MSN to become the search leader.

Now, as Google plans an initial offering of its shares to public investors (which has bankers, mutual-fund managers and the would-be Warren Buffets salivating), the way the company is remaking the world of advertising is drawing attention.

"The true size of Google's advertising business is one of the biggest surprises of the disclosures it made", when filing for its IPO, The New York Times reported. In 2003, 96 per cent of Google's net revenues of $962 million were ad revenues, mostly from selling simple, unobtrusive text-based ads triggered by key words, which turn up - plainly labelled as "sponsored links" - next to the search results. (The e-mail service Google is testing, Gmail, also serves up targeted ads, similarly generated by key words and placed alongside what the computer user reads.)

Now, paid search is firmly established as a weapon for marketers to reach hard-to-reach consumers, especially younger men, in non-traditional ways.

The idea that ads can be relevant to the audiences at which they are aimed, even welcomed, is a big one, coming when marketers declare themselves more willing to explore doing things differently.

In other words, the consumers who once said "catch me if you can" are eager to be caught. Within limits, of course, so long as Google continues adhering to its present business model of providing a superior paid search that sends satisfied computer users off to their intended destinations fast, fast, fast, to borrow the old Anacin pain-killer slogan.

"A good search means that users come to your site and leave really quickly," David Hallerman, an analyst for the eMarketer researcher, told Advertising Age, "but the sort of advertising that larger companies want to do online has to be done on sites where people stick around."

And once Google goes public, and its shareholders start clamouring for even more profits, will the company start to rethink its policy of providing a low-key, uncluttered website? Already, Google has decided to provide ads with graphic images on the sites of other web publishers for whom the company sells ads.

There's also the issue of Google the ad seller becoming Google the ad buyer. So far, it has built its positive image through word-of-mouth, meaning it hasn't had to advertise. However, the documents Google filed in anticipation of its IPO declare that "maintaining and enhancing the 'Google' brand", which is "critical to expanding our base of users", may "require us to make substantial investments, and these investments may not be successful".

It's not quite Lord Leverhume's "half the money I spend on advertising is wasted ...", but it could be the cyberspace version. But fear not, would-be Google stock buyers, the brand name seemingly is a winner, thanks to that wacky double-o, Yahoo!-echoing sound. The impresario Billy Rose was on to something in 1923 when he wrote a song about "Barney Google, with the goo-goo-googly eyes".


Before commenting please read our rules for commenting on articles.

If you see a comment you find offensive, you can flag it as inappropriate. In the top right-hand corner of an individual comment, you will see 'flag as inappropriate'. Clicking this prompts us to review the comment. For further information see our rules for commenting on articles.

comments powered by Disqus