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How Google Can Dominate the Display Ad Market

This article about Google’s “Grab for the display ad market” got me thinking about an old business model that I developed for the music industry:  Pay them and they will come.

(What follows is sheer speculation and must be taken with a grain of salt.  If you have actual facts and/or experience with Google media products, feel free to post them below.  Anonymous posts are welcome)

The author of the aforementioned article reviews the less-than-exciting performance with specific Google media endeavours (print, radio and tepid response to TV).  My speculation is that the ‘success’ may have been misinterpreted because the author focuses on agency response to these products.  However, there’s a distinct possibility that these services were not developed with agencies in mind.

Instead, I’m speculating that they’re intended for everyone else, particularly those people that don’t use agencies.

I also mentioned that there are at least two connections with an old business model that I’m familiar with:

  1. When you pay artists what they should get instead of trying to scrape every last penny from their efforts, they’ll sign up in droves.
  2. Be transparent.
  3. It takes time for the market to catch up to your ideas.

The second element killed my business but then, I didn’t have the resources that Google does.  In other words, my life went on while the world figured out how to organize paid music downloads.

It’s the first element that’s more important.  If Google acts on the ‘reasonable pay’ concept for the publishing model, Google’s products will be widely adapted by the publishing world.  More importantly, if they’re more transparent about how well they pay publishers when publishers host their ads, people will come to appreciate the merits of their services.

It becomes a win-win.  The publisher is rewarded for providing world-class content and Google is rewarded, much like a broker would be for managing a portfolio of stocks.  Of course, in the financial world, brokers typically only get a few percentage points of the assets under management (or in Google’s case, revenue generated).

Will Google be prepared to take such a small cut for lending its market to these publishers?

I certainly hope so.

I’ve already been using Google’s Ad Planner, Ad Placement and Ad Builder products for some time and I’m coming to appreciate that I can get an ‘all you can eat’ campaign under one roof.  I can build a search campaign, run a CPC ad network campaign and also target specific vertical sites that are part of this newest product from Google.

However, one of the limitations is the volume of activity that you can purchase through Ad Placement.  My suspicion is that it’s because the market is saying one of two things (or both):

  1. I’m being really cheap with my bids (which has been known to happen on occasion)
  2. The publishers aren’t making enough inventory available to Google

Either way, something has to give.  I’m happy to surrender more money if I know that the publisher gets a bigger cut.

What do you say Google?

(NOTE:  I could be very wrong on one basic premise:  the amount that Google pays to its partners.  I’m assuming that it’s a very low percentage and I’m suggesting that they flip the ratio to the publisher’s benefit.  If I am off-base and you’re with Google, please feel free to note corrections in the comments).

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