Google enters the impression-based, online ad market with a program where advertisers can target ads to specific sites in Google's partner network.
Google is stepping beyond clicks in its quest to gain a greater share of advertising on the Internet.
The company on Monday is announcing a new ad program where advertisers can target ads to specific sites in Googles ad network and pay based on the number of times the ads are shown, rather than on the number of clicks on a link.
Google Inc. plans to roll out the new option, called site targeting, over the next few weeks to the thousands of advertisers in its AdWords program. A beta test has already begun with select advertisers, said Salar Kamangar, director of product management at the Mountain View, Calif.-based company.
The move marks a significant shift for Google, which along with Yahoo Inc. has helped to popularize the so-called pay-per-click advertising model online. In that model, advertisers bid in keywords that trigger sponsored links and pay when a consumer clicks on the links.
Google, instead, now will offer ads sold in the more traditional CPM model, where advertisers pay based on every thousand impressions of an online ad. But to keep the ads relevant, Google plans to make the CPM ads compete for placement on a site with its click-based ads.
"The difference is now [the CPM ads] arent fixed or based on reservations, and there are a lot of factors to make it so that theres a lot of competition for an advertiser to get shown on a site and its that competition that will yield what is relevant on a site," Kamangar said.
As in pay-per-click ads, advertisers also must bid in a competitive auction for Googles CPM ads rather than being able to buy placement for a period of time. They will be able name a maximum CPM rate for placement on one of the thousands of Web sites that are part of Googles AdSense partner network, and the placement of ads will shift based on Googles relevancy formula, Kamangar said.
The new ads will not run on Googles own Web sites.
Google also is introducing another ad format. Advertisers will be able to run ads with animated graphics, an option that joins text-based sponsored links and the image ads which Google introduced a year ago.
Advertising is crucial to Google, accounting for about 99 percent of its revenues and underpinning the companys market success.
Google is integrating the site-targeting feature into the same self-service AdWords systems as it uses for pay-per-click ads. Advertisers will be able to type in their site URLs or a set of keywords to return about a 100 suggested sites for targeting a CPM ad, Kamangar said.
Click here to read about Google opening developer access to its AdWords system.
The publishing partners who run ads through AdSense also will be able to restrict specific advertisers from running ads of their sites.
Online publishers typically sell their own CPM ads, but Kamangar said that Googles site-targeted ads would complement those sales by allowing a wider array of advertisers to reach the publishers.
Like other Google ads, they would run in designated areas of a partner site. Publishers also would earn a share of the ad revenue.
While CPM ads deepen Googles commercial offerings, Kamangar said they also help it fulfill its mission of organizing the worlds information because the ad revenue supports the creation of online content.
"The more successful publishers are in generating revenue from content, the more successful they will be at making content available online," Kamangar said.
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As an online reporter for eWEEK.com, Matt Hicks covers the fast-changing developments in Internet technologies. His coverage includes the growing field of Web conferencing software and services. With eight years as a business and technology journalist, Matt has gained insight into the market strategies of IT vendors as well as the needs of enterprise IT managers. He joined Ziff Davis in 1999 as a staff writer for the former Strategies section of eWEEK, where he wrote in-depth features about corporate strategies for e-business and enterprise software. In 2002, he moved to the News department at the magazine as a senior writer specializing in coverage of database software and enterprise networking. Later that year Matt started a yearlong fellowship in Washington, DC, after being awarded an American Political Science Association Congressional Fellowship for Journalist. As a fellow, he spent nine months working on policy issues, including technology policy, in for a Member of the U.S. House of Representatives. He rejoined Ziff Davis in August 2003 as a reporter dedicated to online coverage for eWEEK.com. Along with Web conferencing, he follows search engines, Web browsers, speech technology and the Internet domain-naming system.