Jan 15 2007
Google Display Advertising (CPM) in Australia
An interesting article by Michael Sainsbury in the Australian IT today entitled “Search Party to Last all Year“, which is congruent with my feelings on the growth of local search. In this article he talks about the large increase in revenues coming from “…banner/display advertising, classifieds and search”.
He goes onto mention that Google “…is just in search right now”. I am of the belief that that’s going to change very shortly. In his November article Google’s Top Secret Advertising Network, John Chow indicates that display advertising is already in it’s early stages in the US, not via their traditional CPC (cost per click), but via CPM (cost per thousand impressions)
If When this comes to Australia it’s going to be huge, and I believe it’s going to seriously erode into the market share of digital Ad Agencies in Australia. Why? Because it’s going to open the doors to the smaller to midsize website owners, frustrated with the lack of transparency, high commissions and pompous attitudes shown by many of these Agencies. It will let them control the ads and readily match advertisers with publishers (i.e. the small web guys).
Anyone who runs a startup internet business (such as dLook) knows that the most effective method of getting people to your site (in the majority of cases) is via online advertising, whatever the shape or form. You have to capture “browsers” while they are THERE (on the web), not hope that they will remember you from some other medium. It’s not simply a case of “build it and they will come”.
I believe Google entering this arena will not only cause the largest boom we have seen in display advertising, but will also see this revenue distributed more evenly over the internet (not to mention lining the Google coffers). It will also seriously impact on increasingly popular affiliate networks such as Clixgalore and Commission Monster and individual affiliate programs being offered by larger websites which today are the only really viable alternatives to smaller sites. It’s also really messy, having numerous affiliate networks and individual programs. To have it all in one spot would be bliss.
Would I use it? You betcha. Both as an advertiser and a publisher.
5 Responses to “Google Display Advertising (CPM) in Australia”
[…] article in the Australian IT today entitled “Search Party to Last all Year” has raised another interesting point for me. He states “search (revenue) is tearing ahead at somewhere […]
Interesting – not sure however how they will estimate the right amounts to charge per thousand impressions. Similar to CPC – there could be lots and lots of empty impressions just as there are lots of fake clicks.
I had a simlar problem with my http://www.parcusgroup.com adds.
Until some relevant revenue share model is in place this will not be ideal.
Hi “Hmmm”, thanks for your input.
You raise some valid points. According to John Chow “…every display network members negotiates a flat CPM rate with Google. The contracts are one year long and publishers have to guarantee Google that they will provide a minimum amount of ad inventory each month”.
This is something I don’t understand about CPM, aren’t a thousand eyeballs (well two thousand, so to speak
) equal. Sure some might be more relevant and some suit a demographic better, but why should you pay more for “site x” than “site y”? So I’m not sure how one would go about valuing the precise rate for their site.
The other downside is being locked in for a year. As “Tony” points out in the comments “Isn’t that ‘forever’ in Internet time?”.
As to your point about “empty impressions”, I think they will be relatively selective with their websites – more so than AdSense, and regarding revenue sharing, according to John Chow “…they are much more open (about revenue sharing) with the display network”.
We are Australia’s leading performance network and we have hear none of Googles intentions. However Viva9 will make an announcement at Ad-tech Sydney that will place a kink in this assumption.
Stay tuned!!
Hi Peter
I suppose Google don’t always advertise new products in the “testing phase” – it may still be a long way off.
I look forward to hearing about the announcement – it sounds exciting!