I recommend reading John’s interview of Google’s Omid Kordestani, who also spoke at the Web 2.0 conference (see SearchViews’ account). Omid was the first sales/business person to join Google in 1998, and runs sales and global business development for the search&advertising giant.
There are some interesting nuggets of information in this piece:
- [Kordestani] has to manage relationships with agencies that want more control over their clients’ campaigns and with publishing partners who see Google as a prime source of online revenue — and a long-term threat to their media businesses.
- Once [Google] proved that the text ads on Google could be successful and not interfere with the search experience, then it really turned into a science. We applied auction theory to maximize value — it was the best way to reach the right pricing, both for advertisers and for Google. And then we innovated by introducing the rate at which users actually click on the ads as a factor in placement on the page, and that was very, very useful in relevance.
- Right after the [dot-com] collapse, people were cynical about online advertising. But we monitored our traffic and the click-through rate of the ads. It quickly became apparent that AdWords was working. The model was perfect because people were willing to try something out for $1,000 and see if they could get enough leads to justify additional spending.
- The measurability of online advertising will extend broadly to all areas of media. You have companies spending billions of dollars on television. As more and more consumers adopt technologies like TiVo, I think you’ll be able to have much more useful forms of advertising — more targeted, more measurable, and with new pricing models. Just imagine if we made it possible for our advertisers to quickly publish relevant ads that could range from the local plumber on one end to Super Bowl commercials on the other.
- As a matter of practice, Google will work with advertisers in any way they want to work with us, whether directly, through a traditional agency, or through a specialty search-engine marketing firm. Google sees agencies as crucial. Agencies create and execute marketing strategies for their customers, and Google helps them execute those objectives.
As an increasing number of consumer Internet companies rely on advertising as the primary, and sometimes unique, monetization mechanism, it is important to understand how they did it. Their key words: traffic, reach, breadth, relevance, measurability, ease of use, new pricing models.
Even if Google is delivering stellar results, there are still many areas of opportunities that will require new targeting and delivery mechanisms – for example to efficiently advertise in podcast, videoblogs, short form videos that will proliferate on Video iPods and cell phones, etc. On that front, it is just the beginning.