free html hit counter Sunday Reading - John Battelle's Search Blog

Sunday Reading

By - October 30, 2005

This piece in the NYT was clearly written with Google’s open approval, and that means one thing: Google is using the Times to talk with the folks on Madison Ave – and Wall St. And I have no doubt those folks are reading – closely. Though the issues of data privacy and Google’s opaqueness are addressed, it still reads as something of a valentine. But with numbers like Google has, it’s hard to see how it wouldn’t be.

There are tidbits in here that mark new comments from Google (at least to a major media outlet) on a number of topics, from Google Base to Google’s AdWords optimization techniques to privacy. There’s also a bunch of history. From the piece:

This year, Google will sell $6.1 billion in ads, nearly double what it sold last year, according to Anthony Noto, an analyst at Goldman Sachs. That is more advertising than is sold by any newspaper chain, magazine publisher or television network. By next year, Mr. Noto said, he expects Google to have advertising revenue of $9.5 billion. That would place it fourth among American media companies in total ad sales after Viacom, the News Corporation and the Walt Disney Company, but ahead of giants including NBC Universal and Time Warner…..

…Google is also preparing to disrupt the advertising business itself, by replacing creative salesmanship with cold number-crunching. Its premise so far is that advertising is most effective when seen only by people who are interested in what’s for sale, based on what they are searching for or reading about on the Web. …HIDDEN behind its simple white pages, Google has already created what it says is one of the most sophisticated artificial intelligence systems ever built. In a fraction of a second, it can evaluate millions of variables about its users and advertisers, correlate them with its potential database of billions of ads and deliver the message to which each user is most likely to respond….

….”If we can figure out a way to improve the quality of ads on television with ads that have real value for end-users, we should do it,” (Schmidt) said. While he is watching television, for example, “Why do I see women’s clothing ads?” he said. “Why don’t I see just men’s clothing ads?”…

…Mr. Brin said that preliminary versions of Google Base leaked onto the Internet and that the company’s partners should not fear it. “Google Base is as much about classified as it is about zoology,” he said….

…GOOGLE introduced its current system for determining which ad to show on which page late last year. It is a wonder of technology that rivals its search engine in complexity. For every page that Google shows, more than 100 computers evaluate more than a million variables to choose the advertisements in its database to display – and they do it in milliseconds. The computers look at the amount bid and the budget of the advertiser, but they also consider the user – such as his or her location, which they try to infer by analyzing the user’s Internet connections – as well as the time of day and myriad other factors Google has tracked and analyzed from its experience with advertisements.

“If someone is coming from a particular location, a certain ad may be more popular there,” explained Jeff Huber, Google’s vice president for engineering. “The system can use all the signals available, and the system itself learns the correlations between them.”….

…Google recently rewrote its privacy policy to make it easier to understand what data it collects, but it did not scale back its data retention. Nor did it, as Mr. Weinstein and others have demanded, give users the right to see the data collected about them and their computers….Mr. Brin said he was not sure what other information about users might prove useful, but he said Google would not use the data inappropriately….

….”Google is very opaque and bizarre to deal with,” said Joshua Stylman, a managing partner at Reprise Media, a search advertising agency, but he added that Google had become somewhat more responsive in recent months.

Mr. Schmidt addresses those complaints by saying that advertisers are missing the point of Google’s new model. It shouldn’t matter what Google does with their ads, he argues, so long as the received value, which advertisers can measure, is higher than the price they pay….

All in all, worth a close read, I’d wager.


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10 thoughts on “Sunday Reading

  1. {{{{ In a fraction of a second, it can evaluate millions of variables about its users and advertisers, correlate them with its potential database of billions of ads and deliver the message to which each user is most likely to respond..
    ~~~~~~~~~~~~~~~~~~

    :LOL The REAL irony of all this is that the Organic SERPs should effectively enough as to eliminate the need for any user to resort to the Sponsor Links. ;-)

    If these users are in fact clicking on the Sponsor Links, are they doing so because of non-relevant SERPs? :-(

    or

    Or their eyes just instintively/ intuitively drawn to the Three Sponsor Links with Pastel Backgrounds that are AT THE TOP of the Natural lisings on the SERPs, first.

    http://blog.eyetools.net/eyetools_research/2005/03/eyetracking_goo.html

    Are some casual users even aware that they are sponsor links – and just normally click on the first link that appears. If so, it has less to do with their complex technology!

    If users are disatified with the Page One of the Organic SERPs, and just find it easier to use the Sponsor Links than to navigate to Page Two….

    well then say “Hello” to the future Google version of Yahoo’s famous Directory :GRIN

  2. Good post, John…it’s interesting to see how watching the pennies became such an important part of the Google success story.

  3. P.S. I’ve highlighted your piece in a post on my site, and tried to trackback, but the trackback feature is not working…not sure if it’s Typepad on my end or something on the Searchblog site…fyi.

  4. What will fully realize the dream for them, is when live sports and other content are delivered over IP tv to your choice of device where you can track who is watching from what device via their team/package subscription and they are capable of tailoring TV ads to individuals watching in real time. RFID integrated into the set-top box anybody?

  5. Joe says:

    Its hard to tell who does what anymore and the truth is as different types of media converge companies that where partners become competitors.

    Look at Comcast statement John highlighted last week about becoming “the Google of cable companies”. Well that’s a problem if Google would like to be the Google of cable companies.

    NY Times serves Google ads and uses Google’s search box. Did you notice the quote by Jarvis saying he “can’t trust Google”. I would argue that much of The Times feels the same, or at least they are watching there backs.

    The love hate relationship between Google and traditional media, referenced by the article will quickly become one way if the margins start to drop on creative and brand advertising.

    And my personal favorite is the article’s reference to Yahoo as once being a significant supporter of Google but now one of its fiercest competitors. We all knew it but to put it next to all these other examples of companies loving Google and now concerned is poetry.

    Where is equilibrium in this market? There are only so many levels on which you can compete and still partner with a company. John, I disagree that this article was a valentine. I believe it was written in a manner to get the approval of Google (they got some real heavy hitters over there on record for it), but that under the surface it was a warning flare from the New York Times to other media and advertising firms.

  6. Markus says:

    The less people know about your system the less they can game it. I face nearly the same problem google has, and its really the only way to run a successful businss.

  7. Chris Phenner says:

    No comment about the FULL PAGE AD in the same section of the NYT (print) three pages later?

    That article was a love letter, with ONE quote from Wendy Millard at Yahoo in “reponse,” a total lightweight piece…surprised it received the “worth a read” nod, given your scrutiny of the firm.

  8. The one thing I find humorous is that the NYT has finally decided that its safe to put an internet company on the front page and claim that they are going to change the world. I don’t think that we are hitting another bubble (at least not in the same way) but it does look like people are drinking the kool-aid again. I feel like it is going to be another crazy ride.