New search ad formats

At Google, we're committed to giving you the information you want — regardless of the form in which it might appear.

Text is often useful, but sometimes videos and pictures are a more effective way to receive information. For example, if you want to learn a magic trick, a video showing you how to perform the trick is likely the best result. So over the past few years, we've blended videos, images, maps and more into the search results on Google.com.

It also makes sense to provide you with richer types of information in the ads. If you're looking to buy your mom a new handbag for the holidays, for instance, you might want to see pictures, prices, the addresses of boutiques in your area and a map of how to get there — all within the ad.

To provide a better search ads experience, we've been developing and testing a variety of new ad formats. These formats are focused on giving you the information you need, while retaining what you love about Google advertising: that the ads are relevant and useful.

If you’re in the U.S. you may have already seen a number of these ad formats when searching on Google.

Some of them include visual elements. For example, if you’re curious about the movies that are playing this holiday season, you might see an ad with a video that lets you watch a trailer.


You might also see an ad with more links so you can quickly find a specific page in an advertiser’s website. If you're researching airfare to visit your relatives for the holidays, it saves time to go directly to Priceline's page about booking flights, rather than the general homepage or rental car page.


Or, if you’re trying to find a holiday bouquet to bring to your dinner party hostess, you might see an ad that shows your local florist's location on a map and provides driving directions.


Other new ad formats might help you find all the addresses and locations of a chain store in your area. So if you're vacationing abroad this season and have a craving for something familiar, the ad might show you all the nearby Pizza Huts that can deliver to your hotel.


And starting today, you might spot ads that include images and prices for specific products. When shopping for the ski outfit your nephew has been hinting about all year, you might see pictures from the retailer’s inventory to help you quickly determine if they have the color and style you had in mind.


Still other ad formats may introduce new ways of presenting information, such as Comparison Ads, which allow you to specify exactly what you're looking for and to compare rates and prices in a single location. With the approaching new year comes resolutions to get things in order, so you might want an ad that lets you see side-by-side refinancing offers.


While we experiment with new formats, we'll remain loyal to our core principle: that getting the right ad to the right person at the right time matters. As we continue to think up innovative ways to give you the information you want, you’re likely to see even more ad formats until we pinpoint the most useful, relevant and engaging ones. We’ll keep trying new things until we discover the “perfect” ads that improve your overall search experience.

Posted by Susan Wojcicki, VP, Product Management

Displaying the best display ad with Teracent

Can you spot the difference between these two sample display ads? Of course you can. However, the most important difference is not discernible to the naked eye.

The lower ad was customized and chosen from thousands of different creative elements, automatically and in real-time, by machine-learning algorithms developed by Teracent, a San Mateo, California startup.

We think that this technology has great potential to improve display advertising on the web. That's why we're pleased to announce today that we've entered into a definitive agreement to acquire Teracent. The transaction, which is subject to various closing conditions, is expected to close this quarter.

As you know, we've been busy releasing new features and products to help improve display advertising on the web for everyone. We believe that Teracent's technology fits neatly into these efforts.

Teracent's technology can pick and choose from literally thousands of creative elements of a display ad in real-time — tweaking images, products, messages or colors. These elements can be optimized depending on factors like geographic location, language, the content of the website, the time of day or the past performance of different ads.

This technology can help advertisers get better results from their display ad campaigns. In turn, this enables publishers to make more money from their ad space and delivers web users better ads and more ad-funded web content.

We're looking forward to welcoming the Teracent team to Google and to making this technology available to our display advertising clients — including those who run display ad campaigns on the Google Content Network and our DoubleClick clients.

Update on 12/11/2009: The deal has closed, and Teracent is officially part of Google. 

Posted by Neal Mohan, Vice President, Product Management and Joerg Heilig, Engineering Director

Three contest winners making their way to television

(Cross-posted from the Google TV Ads Blog)

Small businesses often think that television advertising is too expensive and cumbersome for them to use. They assume that they need a fancy, expensive commercial to use in their TV campaign. But Google TV Ads changes all of that — we make it easy and affordable for you to make a TV ad, plan a campaign and reach your customers through the power of television. We launched the TV for All contest two months ago to prove just that.

More than 200 companies submitted commercials for the opportunity to win $25,000 worth of free national advertising on cable channels such as CNBC, Hallmark and Bloomberg using Google TV Ads. Today, we're happy to announce the three winners of the TV for All contest based on votes from the YouTube community.

Amazing Gates, Owners.com and ZAGG.com received the largest number of votes among the 10 finalists. Each of these businesses will receive $25,000 in free national advertising through Google TV Ads advertising.


Check out the three winners and all entries at www.youtube.com/tvforallcontest. For more information on Google TV Ads and how it can help your small business succeed, visit our website at google.com/tvads.

Posted by Deeksha Hebbar, Associate Marketing Manager, Google TV Ads

One-stop shop: Buy Promoted Videos in AdWords

We first launched Promoted Videos as a search advertising program on YouTube, allowing content creators to drive viewership of their videos by targeting the hundreds of millions of searches that happen on YouTube every day. But in the past year Promoted Videos has evolved into a much broader discovery vehicle, appearing on search, the YouTube homepage, video watch pages and recently across the AdSense network. We've also built better conversion opportunities via Call-to-Action overlays. As a result, Promoted Videos is now driving millions of video views per week, with clicks having increased 500% since January. In a world where 20 hours of video are uploaded to YouTube every minute, Promoted Videos has become a critical way for creators to get their content in front of viewers across the web.

Now that it's easier than ever to drive views of your video, we also wanted to make it easier to run these campaigns in the first place. Starting today you can buy Promoted Videos directly in AdWords. Any AdWords advertiser with video content — from a small business looking to promote a product, to a movie studio premiering a new trailer — can use Promoted Videos to make sure their videos find a larger audience. This integration will provide a single destination for your overall Google ad buy, and will give YouTube advertisers access to campaign tools in AdWords.

AdWords is a global platform, so we're excited to use this integration as a way to start rolling out Promoted Videos internationally. With this launch, Promoted Videos are now available in Canada, the U.K., France, Italy, Germany, Spain and the Netherlands. We hope our international users, partners and advertisers will take full advantage of this new opportunity to ensure their videos are more easily discovered around the world, and we look forward to expanding to other countries in the coming weeks.

Posted by Jonathan Goldman, YouTube Software Engineer

AdSense for Mobile optimized for high-end phones

High-end mobile phones, like iPhone, Android-powered devices and the Palm Pre , continue to grow — Gartner estimates that global sales of smartphones will soar by 27% in 2009, to 177 million units. Naturally, as a result more and more people are browsing the web on the go.

Because these devices offer a browsing experience that is similar to desktop computers, advertising on smartphones is a natural extension for any AdWords campaign. However, it's not always been easy for advertisers to reach people on smartphones. That's why we're investing in new high-end mobile advertising products such as our search ad options for high-end phones and AdSense for mobile applications. We hope to make advertising on high-end mobile devices as intuitive, effective and user-friendly as our existing AdWords tools.

Today, we're excited to announce a new feature for our AdSense mobile publishers that enables them to serve text and image ads on their sites — specifically on these high-end smartphones. This helps mobile publishers earn revenue and fund more mobile-specific sites and web content.

New features like this help to nurture the smartphone ecosystem by encouraging the creation of more mobile content and by helping advertisers to grow their businesses by reaching new audiences. Our users' experience is also improved, with increasingly relevant and device-optimized mobile ads that load faster and fit better on small screens.

For more info about this feature, check out the Inside AdSense Blog.

Posted by Danielle VanDyke, Software Engineer

The DoubleClick Ad Exchange: growing the display advertising pie for everyone

Hundreds of thousands of advertisers use search advertising — short, highly relevant text ads alongside search results on Google and other search engines — to grow their businesses. Thanks to a decade of innovation, search advertising is an open platform that allows businesses to easily connect with customers.

As you browse the web today, you'll also see "display advertising," such as videos, images and interactive ads. Like search ads, these connect users with products, services and ideas that interest them. For advertisers, display ads are vital in boosting awareness and sales. For websites and online publishers, they help fund investments in online content and the web services that we all use.

But with a multitude of display ad formats, and thousands of websites, it often takes thousands of hours for advertisers to plan and manage their display ad campaigns. With this complexity, lots of advertisers today just don't bother, or don't invest as much as they would like.

On the other side of the equation, some publishers are left with up to 80% of their ad space unsold. It’s like airlines flying with their planes mostly empty. And for the ad space that they do sell, publishers also have to deal with the complexity of managing thousands of advertisers and campaigns.

We believe that a better system built on better technology can help grow the display advertising pie and benefit everyone.

Three principles underpin our approach to the display advertising field:

1. Simplify the system for buying and selling display ads: For example, our DoubleClick ad serving products help advertisers and publishers manage campaigns and ad formats across thousands of websites and from thousands of advertisers.

2. Deliver better performance that advertisers and agencies can measure: We're building a host of new features to help advertisers to run display ad campaigns across the Google Content Network (comprising hundreds of thousands of AdSense partner sites) and on YouTube. We're also developing better measurement and reporting technology so they can figure out what's working and what's not.

3. Open up the ecosystem: We want to democratize access to display advertising and make it accessible and open, like search advertising. We recently launched the Display Ad Builder to help businesses easily set up and run display ad campaigns. 80% of advertisers who use that product have never run a display ad campaign before.

We've been working hard to put these principles into practice, and today we're excited to announce the new DoubleClick Ad Exchange, a step towards creating a more open display advertising ecosystem for everyone. The Ad Exchange is a real-time marketplace that helps large online publishers on one side; and ad networks and agency networks on the other, buy and sell display advertising space.

These publishers and ad networks manage and represent large volumes of ads and ad space from lots of advertisers and websites. By bringing them together in an open marketplace in which prices are set in a real-time auction, the Ad Exchange enables display ads and ad space to be allocated much more efficiently. This improves returns for advertisers and enables publishers to get the most value out of their online content.

An explanation of the Ad Exchange is here (PDF). You can read in more detail about the features of the new DoubleClick Ad Exchange on the DoubleClick blog.

AdWords advertisers will be able to run ads on sites in the Ad Exchange, using their existing AdWords interface. This means more high quality sites for AdWords advertisers to run display ads on. Similarly, our AdSense publishers will benefit from more high-quality display advertisers coming through the Ad Exchange. You can read more about these benefits on the AdWords Blog and the AdSense Blog.

To find out more about our overall display advertising vision and the many services and features we've been investing in across the Google Content Network, YouTube and DoubleClick, check out the video below:



We believe that growing the display advertising pie for everyone will greatly enhance the web experience for advertisers, publishers, and ultimately users. The DoubleClick Ad Exchange will help create a more open marketplace and is a major step towards that vision.

Posted by Neal Mohan, Vice President, Product Management

New AdWords bidding tutorial

(Cross-posted from the Inside AdWords Blog)

Last month we launched a new feature of AdWords called Bid Simulator. Bid Simulator takes some of the guess work out of cost per click (CPC) bidding by estimating the number of clicks or impressions you could have received if you had used a different maximum CPC bid. Today, I thought I would take the opportunity to help you make the most of this new feature by explaining how to use the data from Bid Simulator to maximize the profit from your marketing investment.

In general, when you increase your maximum CPC bid for keywords on search you are able to generate more clicks to your site. This may be because your new bid qualifies you to appear higher up in the Sponsored Links on the search results page, or because your higher bid qualifies your ad to appear in new, more expensive auctions. The goal for you as an advertiser is to decide whether or not these additional clicks come at a cost that is still profitable for you.

To make this decision, you need to compare your expected value per click to your incremental cost per click. Your value per click is how much a click for a particular keyword is worth to you, on average. Your incremental cost per click is how much extra you are paying, on average, for the extra clicks you are getting from your higher bid. When your value per click is higher than your incremental cost per click it makes sense to increase your bid. On the other hand, if your value per click is lower than your incremental cost per click, you probably want to decrease your bid.

To learn more, you can watch the tutorial video below. In the video, I'll show you how to calculate these values, how to interpret them and how to use the data to maximize the profit from your marketing investment. My team and I are always looking for ways to help make the AdWords auction easier to understand so if you have other topics that you'd like us to address, please leave a comment on the video and we may be able to make it a topic for a future video.



Watch it on YouTube: http://www.youtube.com/watch?v=jRx7AMb6rZ0

Posted by Hal Varian, Chief Economist

Leave the math to us: Advertisers increase their profits using Conversion Optimizer

This post is the latest in an ongoing series on The Power of Measurement. Previous topics have covered ways to make your website as successful as possible through tools such as Analytics and Website Optimizer. – Ed.

If you're an old-school AdWords advertiser, you may remember that you originally set bids based on ad impressions (cost-per-impression, or CPM). Later, AdWords transitioned to a new model where bids were set based on ad clicks (cost-per-click, or CPC). Now, as technology has become even more advanced, we’re seeing the next phase of search engine advertising.

What if we told you that you could bid for ads simply based on conversions? (A conversion is a goal set by an advertiser, such as a website visitor purchasing a product or filling out a form.) With Conversion Optimizer, Google does all the heavy lifting and complicated analysis, letting you bid simply based on how much a conversion is worth to your business (cost-per-acquisition, or CPA). By using Conversion Optimizer, advertisers are not only seeing an increase in profits but have more time to devote to the rest of their business.

We’re excited to announce that this AdWords transformation is well underway: advertisers are already using the Conversion Optimizer to manage approximately $1 billion in spend annually.* This new shift benefits two areas Google cares deeply about: showing our users the most relevant ads and helping our advertisers increase their profits.

So how does it work? Each and every time someone types in a search query, AdWords runs a new keyword auction. Advertisers who are still bidding on a cost-per-click basis will be using the same bid in many different auctions, so sometimes their bid may be too high or too low. However, for advertisers using Conversion Optimizer, we'll automatically adjust the bid for each of these auctions so that it can hit the sweet spot more often, helping the advertiser to make more money.

For example, suppose you're advertising an online shoe store and you purchase ads using the keyword "shoes." Because your clicks come from many different types of people who have different intentions, Conversion Optimizer takes many factors into account to optimize your ad performance. If you don't ship internationally, Conversion Optimizer will learn that clicks from international users don't convert and will eliminate traffic from outside the United States. It might also learn that when customers include the word "cheap" in their query, they are particularly likely to convert because your prices are very competitive. Essentially, Google does the detective work — you tell us how much a conversion is worth and our algorithms make it happen.

As more advertisers transition to Conversion Optimizer, we look forward to showing more relevant ads and, in doing so, helping our advertisers achieve better results. Learn more about Conversion Optimizer and get started using it with your AdWords campaigns.

* Annualized figures based on Q2 sales

Posted by Andrew Silverman, Product Manager, Conversion Optimizer

Announcing the 2009 Google Online Marketing Challenge winners

This year we held the second Google Online Marketing Challenge — a global university competition, launched last year, that gives undergraduate and post-graduate students hands-on exposure to online marketing. Working with their professors, teams receive the equivalent of US$200 to spend on Google AdWords advertising, then work with a local business to devise an effective online marketing campaign. Teams are given three weeks to mastermind the strategy before submitting a campaign report to an international judging panel of professors.

This year's Challenge was bigger and better in every way — more teams, more students, more universities and a significant improvement in the quality of campaigns and reports. We're thrilled to report that 2,187 teams took part from across 57 countries, representing a 36% increase in participation from last year. The Challenge continues to develop as one of the world’s biggest university competitions.

We're excited today to announce the results. Our global winners come from Deakin University, Australia and were taught by Chia Yao Lee and Bardo Fraunholz. The team of Andrew Kidd, Richard Blakely, Kevin Fung, Clinton Hinze, Katalin Kish and Howard Lien worked with a local kids play center, www.littletigrrs.com.au, to create a well-crafted campaign that highly impressed our judges.

Clockwise from top left: Richard Blakely, Chia Yao Lee (professor), Katalin Kish, Kevin Fung, Bardo Fraunholz (professor), Howard Lien, Andrew Kidd, Fiona and Mike (from Little Tigrrs), Clinton Hinze and Mick, The Big Hearted Tiger

Team spokesman Andrew Kidd gave us some insight into their winning campaign:

"After discussions with the business owners, we decided we needed to conduct three separate campaigns. One would promote the play center to customers outside a 10 kilometre geographic radius, another would attract more mothers' groups to the center, and the third one would attract more party and group event bookings. Visitors to their website more than doubled compared with the same period last year. We knew we had developed a strong campaign — but to win the global competition is outstanding."

The team and their professor are off to Mountain View, California for a tour of the Googleplex. To help in their ongoing studies, each team member will also receive an Apple MacBook Pro.

There were also three regional winners: for the Americas, the winning team comes from James Madison University in the U.S., while a team from the Warsaw School of Economics in Poland won for Europe, the Middle East and Africa. In the Asia Pacific region, the winners come from the International College of Management in Sydney, Australia. Here are more details about our winners.

We developed the Challenge to benefit everyone involved. We're delighted that thousands of small businesses around the world have seen their online presence improved in just three weeks. Professors tell us that the Challenge has allowed them to deliver a unique, practical teaching and learning exercise. For those students that took part, we hope they have developed some useful online marketing skills which they can use when they graduate and enter the workforce.

For anyone interested in competing in the 2010 Challenge, formal registrations will open later this year, but in the meantime you can register your interest.

Posted by Lee Hunter, Product Marketing Manager

Announcing the AdSense for Mobile Applications beta

You don't have to be a mobile expert to see how smartphones are revolutionizing our daily lives. Lower prices, faster network speeds and unlimited data plans mean that people often reach for their cell phone rather than their computer when they are seeking information. As a result, mobile applications have become more and more popular, helping people find music, make restaurant reservations or check bank balances — all on their phone.

We want to contribute to the growth of these mobile applications, which is why we're happy to announce our beta launch of AdSense for Mobile Applications. After all, advertisers are looking for ways to reach potential customers when they are engaged with mobile content, and application developers are looking for ways to show the best ads to their users. We have already had a successful trial of this service with a small number of partners, and are excited that we can now offer this solution to a broader group.

AdSense for Mobile Applications allows developers to earn revenue by displaying text and image ads in their iPhone and Android applications. For our beta launch, we've created a site where developers can learn more about the AdSense for Mobile Applications program, see answers to frequently asked questions and sign up to participate in our beta. Advertisers can also learn about the benefits of advertising in mobile applications.

We're excited to open up this beta to more developers, and look forward to offering new features for our mobile advertisers and publishers in upcoming releases. We also want to say a big thank you to the partners who worked with us on the trial stages of this project including Backgrounds, Sega, Shazam, Urbanspoon and more.

Check out this short video of Howard Steinberg, Director of Business Development at Urbanspoon, discussing his experience with AdSense for Mobile Applications.



Posted by Susan Wojcicki, Vice President, Product Management

Google Chrome ads on TV

A couple of months ago, the Google Japan team produced a fun video to demonstrate how clean and simple our Google Chrome user interface is. After releasing this video on the web, we got lots of positive feedback and thoughtful comments. In order to keep that conversation going, we invited some of our creative friends to make a collection of short films celebrating our browser. We released Chrome Shorts last week on our YouTube channel.

At the same time, we talked to our Google TV Ads team to see how we could show the video that our Japan team developed to a wider audience in a measurable way. Using some of the results from our placement-targeted ads on the Google Content Network, we designed a Google TV Ads campaign which we hope will raise awareness of our browser, and also help us better understand how television can supplement our other online media campaigns.

So today, we’re pleased to announce that we're using Google TV Ads to run our Chrome ad on various television networks starting this weekend. We're excited to see how this test goes and what impact television might have on creating more awareness of Google Chrome.

Check out the video below if you haven’t already seen it, or wait and you might see it on TV while you’re channel surfing!



Posted by Mike Steib, Director, Google TV Ads, and Anna-Christina Douglas, Google Chrome team

What's a rich media ad, anyway?

Since last year's DoubleClick acquisition, we've increased our focus on helping marketers and agencies use Google tools for all of their display advertising needs. DoubleClick Rich Media is the part of DoubleClick that provides the technology for the most technically advanced and engaging of these display ads, which are typically created by creative agencies for their brand-focused clients. To help make this process even easier and efficient, today we're launching DoubleClick Studio, our new rich media production and development tool.

To describe rich media, it helps to think about other ad formats that we're all familiar with, starting with the simplest: text ads. With just a few keystrokes, anyone can create simple messages in a standardized format, and place them on a site like Google.com in minutes. Then we have standard display ads, ads that usually include text with a visual such as a logo or a graphic. These can be in formats we're all familiar with like .jpg, .gif, .swf and more. Standard display ads can either be static or animated with tools like Flash. They typically have only one interaction, meaning that when you click on them, you'll be taken to a destination site. And then at the most complex level, from a design and interaction perspective, we have rich media ads. With rich media, you can have ads that expand when users click or roll over, for example, and there are extensive possibilities for interactive content, such as HD video or even the ability to click to make a phone call.

But making a rich media ad possible requires much more complex technology to ensure that all of the ad behaviors function properly, that all of the interactions can be measured, and to serve the ads onto web pages. Every piece of the canvas, from the video play button to the button that allows for expansion, requires coding in Flash that's made possible by a rich media technology provider like DoubleClick Rich Media. With all of this complexity, there's also a lot of room for error. So in addition to enabling the development of the ads, tools like DoubleClick Studio provide quality analysis and preview functionalities to make sure that the ads work the way they should.

Here is a graphic that represents some of the differences between types of online ads:

With DoubleClick Studio, we hope to make it easier for our existing users to produce rich media ads, and to expand the number of advertisers that can make these useful formats part of their marketing strategy. This is also a good thing for Internet users; rich media capabilities make advertising even more useful, letting a viewer interact with an ad and learn about a brand without having to leave the page they're on. And, advertisers have an expanded creative canvas within the ad itself, allowing for deeper, higher-quality content in the ad itself. At Google, we believe that ads at their best are useful information.

To read more about DoubleClick Studio, visit the DoubleClick blog.

Posted by Shamim Samadi and Ari Paparo, DoubleClick Rich Media Team

Click-to-Buy expands to 8 new countries

Whether you come to YouTube to watch a specific video, discover related content, or engage and interact with people and videos from all around the world, our goal is to put you in control of your online video experience. This means making it easier for you to find what you're looking for (like dedicated channels for music or HD videos) and offering you new and innovative ways to engage with that content.

One way we already offer you this kind of deeper experience on YouTube involves music videos on the site: Click-to-Buy, our eCommerce platform, helps you find products (like songs and DVDs) related to the videos that you're watching. A recent study found that after watching a music video on YouTube, 50% of adult users in the U.K. then go on to purchase music from that artist. And we've seen these results for ourselves — three of the four major music labels are Click-to-Buy partners and are already selling millions of songs a year from these links on YouTube.

We're excited to announce that today we're rolling out Click-to-Buy links on music videos in 8 additional countries: Australia, Canada, France, Ireland, Italy, Japan, New Zealand, and Sweden. Now Click-to-Buy partners can offer music downloads to hundreds of millions of people around the world.

We enjoy working with our music partners to provide them with these kinds of opportunities, and we look forward to further expanding the program in the coming months.

Posted by Thai Tran, YouTube Product Manager

Analytics in Latin America

If you run an e-commerce site or use AdWords to direct traffic to your business' webpage, chances are you're interested in knowing what visitors to your site are clicking on, what content interests these potential customers and what avenues brought them there. The more you know about how people engage with your site, the better you are able to design successful advertising campaigns to help grow your business.

In Latin America, online advertising is growing as more and more small businesses initiate an online presence and publicize their efforts through search and display advertising. But less than 5% of web properties throughout Latin America rely on analysis tools to improve their website's performance. Last week, our offices throughout the region hosted several Analytics-themed events to give agencies and other clients a better look at several Google measurement tools that provide people with the means to analyze their site's flow of data, interest and readership in order to build a better advertising campaign.

In Mexico City, advertisers got together to learn about Insights for Search, Ad Planner, YouTube Insights, Analytics, Sitemaps and Website Optimizer, as well as DoubleClick tools. Presentations were designed to give companies an in-depth look at the Google tools that can be helpful for planning their marketing budgets during an economic downturn. Being able to measure data on what content interests people and where consumers are searching for information can help advertisers be more selective about how they invest ad budget. Since the great majority of consumers go online for information before making a purchase, the goal of the seminar was to familiarize advertisers with tools that can increase the reach of their campaigns, while giving them a better idea of what works and what people are searching for.

Meanwhile, our Analytics guru Avinash Kaushik visited São Paulo and Buenos Aires to speak to clients about web analytics and how to make the most of online marketing through analyzing metrics (check out his recent post on bounce rate for related information). Avinash made web analytics fun and accessible with colloquial comparisons (referring sites as 'BFFs'), and demonstrated how to optimize a website's performance with changes in color and layout, among other things. He was accompanied by Google's Latin America managing director Alexandre Hohagen, Brazil's country manager Alex Dias, and Argentina's country manager Adriana Noreña at a succession of events revolving around web metrics and website optimization.



The response and interest from customers and agencies to all of these events was indicative of the huge need for metrics and the ability to track ROI for their marketing investments, especially during these difficult times. For more information on Google Analytics tools, check out the Google Analytics Blog, the Website Optimizer Blog and the Conversion Room blog.

Posted by Alfonso Luna, Marketing Director, Latin America

Introduction to the ad auction

(Cross-posted from the Inside AdWords Blog)

When we go to conferences or read posts in forums, we find that advertisers sometimes know more about advanced features than about the basics of how AdWords works. So, we've decided to take some time to get back to basics and talk about how the AdWords auction actually works. To help you, we've brought along our Chief Economist, Hal Varian, to walk you through the auction and explain how your maximum cost-per-click (CPC) bid and Quality Score determine how much you actually pay for an ad click on Google's search results pages.

When people think of an auction, they often think of a prize being sold for the highest bid. But the AdWords auction works a little differently, where the winner only pays the minimum amount necessary to maintain their position on the page. That means you'll only pay the minimum necessary to beat the person below you. In fact, our quality-based pricing system ensures that you'll often pay less than your maximum bid.

How exactly does this work? We'll leave that to Hal to explain.



If you have trouble viewing this video, you can watch it here.

Posted by Austin Rachlin, Inside AdWords crew

Making ads more interesting

At Google, we believe that ads are a valuable source of information — one that can connect people to the advertisers offering products, services and ideas that interest them. By making ads more relevant, and improving the connection between advertisers and our users, we can create more value for everyone. Users get more useful ads, and these more relevant ads generate higher returns for advertisers and publishers. Advertising is the lifeblood of the digital economy: it helps support the content and services we all enjoy for free online today, including much of our news, search, email, video and social networks.

That's why Google has worked hard to create technology that makes the advertising on our own sites, and those of our partners, as relevant as possible. To date, we have shown ads based mainly on what your interests are at a specific moment. So if you search for [digital camera] on Google, you'll get ads related to digital cameras. If you are visiting the website of one of our AdSense partners, you would see ads based on the content of the page. For example, if you're reading a sports page on a newspaper website, we might show ads for running shoes. Or we can show ads for home maintenance services alongside a YouTube video instructing you on how to perform a simple repair. There are some situations, however, where a keyword or the content of a web page simply doesn't give us enough information to serve highly relevant ads.

We think we can make online advertising even more relevant and useful by using additional information about the websites people visit. Today we are launching "interest-based" advertising as a beta test on our partner sites and on YouTube. These ads will associate categories of interest — say sports, gardening, cars, pets — with your browser, based on the types of sites you visit and the pages you view. We may then use those interest categories to show you more relevant text and display ads.

We believe there is real value to seeing ads about the things that interest you. If, for example, you love adventure travel and therefore visit adventure travel sites, Google could show you more ads for activities like hiking trips to Patagonia or African safaris. While interest-based advertising can infer your interest in adventure travel from the websites you visit, you can also choose your favorite categories, or tell us which categories you don't want to see ads for. Interest-based advertising also helps advertisers tailor ads for you based on your previous interactions with them, such as visits to their websites. So if you visit an online sports store, you may later be shown ads on other websites offering you a discount on running shoes during that store's upcoming sale.

Our advertisers and publisher partners have been asking us for a long time to offer interest-based advertising. Advertisers need an efficient way to reach those who are most interested in their products and services. And publishers can generate more revenue when they connect advertisers to interested audiences.

This kind of tailored advertising does raise questions about user choice and privacy — questions the whole online ad industry has a responsibility to answer. Many companies already provide interest-based advertising and they address these issues in different ways. For our part, we're launching interest-based advertising with three important features that demonstrate our commitment to transparency and user choice.

• Transparency - We already clearly label most of the ads provided by Google on the AdSense partner network and on YouTube. You can click on the labels to get more information about how we serve ads, and the information we use to show you ads. This year we will expand the range of ad formats and publishers that display labels that provide a way to learn more and make choices about Google's ad serving.
• Choice - We have built a tool called Ads Preferences Manager, which lets you view, delete, or add interest categories associated with your browser so that you can receive ads that are more interesting to you.
• Control - You can always opt out of the advertising cookie for the AdSense partner network here. To make sure that your opt-out decision is respected (and isn't deleted if you clear the cookies from your browser), we have designed a plug-in for your browser that maintains your opt-out choice.
  

To find out more about what Google is doing in this important area, please visit our Public Policy blog and Privacy Center.

Keyword advertising has been so successful because it's useful to users, advertisers and publishers — everyone's interests are aligned. We believe that interest-based ads will create the same virtuous cycle, by giving users more relevant ads, while generating higher returns for advertisers and publishers.

Posted by Susan Wojcicki, VP, Product Management

Ads in new places

At Google we're great supporters of experimentation because it's only by trying new things (even if some of them don't work out) that you discover better, more creative ways to operate. We've been testing different advertising formats for years (some have been more successful than others), and over the next few months, you'll see us continuing to experiment with new ads in new places.

If you're based in the U.S. you may already have spotted or clicked on the different text and image ads we’re testing on the results pages of Google Image Search. And last week you may have noticed we launched Sponsored Videos on YouTube — a great example of matching ads to content.

In addition, we are today launching text ads on Google Finance in the United States. We're also looking at how best to show display ads on Google Finance. And later, in the very near future, we will start testing text ads on a small number of news refinements within Google Search — so if, for example, you type "iPod" into Google.com and then click on the news link on the upper left-hand side, you might see text ads alongside those results.

Whenever we make changes like these, we carefully evaluate users' reactions to ensure we're holding true to our basic principles: that ads by Google should always be relevant and useful. Of course, these experiments benefit Google because they generate revenue from new sources — but by ensuring that we show the right ads at the right time to the right people, we'll add value for users too.

Posted by Nick Fox, Director, Business Product Management

Promote your video with YouTube Sponsored Videos

Update on 8/10/09: The name of this product has changed from Sponsored Videos to Promoted Videos.

With 13 hours of video uploaded to YouTube every minute and millions of viewers watching hundreds of millions of videos every day, the popularity of YouTube can be a mixed blessing for users. While it's easier to get your 15 minutes of fame (or more, depending on who you are), it can be difficult for people to find your video in the first place, even if it's exactly what they're looking for.

But what if you could promote your video on YouTube and make it easier for people to find it?

Today, we are excited to announce a way to do just that. YouTube Sponsored Videos is our new advertising program that enables all video creators -- from the everyday user to a Fortune 500 advertiser -- to reach people who are interested in their content, products, or services, with relevant videos. Anyone can use Sponsored Videos to make sure their videos find a larger audience, whether you're a start-up band trying to break out with a new single, a film studio seeking to promote an exciting movie trailer, or even a first-time uploader trying to quickly build a following on the site.

So how does Sponsored Videos work? Easy-to-use automated tools allow content owners to decide where they'd like their videos to appear, place bids in an automated online auction, and set daily spending budgets. Then, when people search for videos, YouTube will display relevant videos alongside the search results. These videos are clearly labeled as "sponsored videos" and are priced on a cost-per-click basis. (You can learn more about these tools in the video below.)



We are constantly working to develop the right advertising format for the right content and experience on YouTube. That's why our primary focus with Sponsored Videos is to build a platform consistent with the site's search and discovery experience. Just as AdWords provides people with relevant, non-obtrusive advertising, we hope that Sponsored Videos will provide useful, engaging content, accessible to advertisers of all kinds.

We think this is a great first step for offering users, partners, and advertisers search marketing solutions on YouTube. Like Google, our philosophy at YouTube is continuous innovation, so we will work to improve Sponsored Videos by listening to your feedback and observing the auction as it takes time to fully develop. We hope that by leveraging much of the technology and insight of the AdWords team, we can make this transition as easy as possible.

We do not believe there is one advertising solution for YouTube, but lots of valuable ways for advertisers to engage with our audience. The scale of YouTube Sponsored Videos -- with the branding power of InVideo ads, the engagement of our contests, the analytics of YouTube Insight, etc. -- should create exciting opportunities for users, partners, and advertisers.

YouTube Sponsored Videos is currently only available in the United States, but we're working to bring it to other countries soon. If you're interested in running your own Sponsored Videos campaign, please visit ads.youtube.com.

Posted by Matthew Liu, Product Manager, YouTube

Quality scores and ad auctions

There's some interest in how and why "quality scores" are used in search engine ad auctions. In this post, we will try to describe "why" we use quality scores; a later post will go into "how," including more information about bids.

When a user types a query into a search engine, it will typically return both natural search results and advertisements. Google and other major search engines use an ad auction to determine which ads are shown and how much advertisers pay for them.

In the auctions, advertisers enter bids that reflect how much they are willing to pay for a click on their ad -- this is called their maximum cost per click (CPC). Ads are then ordered by the product of the bid that is entered and the estimated ad quality score. People often ask why ad quality enters the formula -- isn't the bid per click enough? Why can't advertisers just buy their way to to the top ad position? To see why both components are important, let us look at a simple example.

Suppose that two advertisers are bidding on the keyword "jet airplane." Joe's Jets is selling actual jet airplanes, while Moe's Models is selling models of jet airplanes. Since jets are expensive, Joe is willing to pay a lot per click. But not many people can afford to buy jets, so Joe won't get many clicks. Moe, by contrast, is willing to pay a lot less per click, but he will also get many more clicks.

Which ad should be listed higher in the "sponsored links" section of the search results page?

What matters in this decision is not simply an advertiser's value for a single click -– the maximum CPC that the advertiser is willing to pay -- but rather the total estimated value of showing that ad: the value per click times the number of clicks that the ad is likely to receive.

The number of clicks that the ad is likely to receive depends on the historical clickthrough rate, which is an important component of the ad quality score. Thus the bid per click times the quality score gives us an estimate of the total value of displaying an ad over time. Joe's ad may have a higher value for a single click, but if Moe's ad gets a lot more clicks over time, it could easily have a greater total value. In that case, Moe's ad will be shown in the more prominent position. (Click on the image to view larger.)

The quality score gives search engines a way of aligning the incentives of the buyers, the sellers, and the viewers of ads. The search engine wants to sell ad impressions, but advertisers want to pay for clicks. The solution is for advertisers to bid on a cost-per-click basis, while the search engine estimates the total value of the ad over time: bid per click times the expected number of clicks.

This is a neat way to align incentives, but it has a problem: since the advertiser only pays on a per click basis, it may as well seek as many ad impressions as it can so that as many users as possible will be exposed to the ad. Joe might well want to buy the keywords "rocket ship" even if he only has jets to sell. Why not? Joe only has to pay if someone actually clicks on the ad.

This is where another distinct, but related quality issue arises: an ad that gets very few clicks shouldn't really be shown. It is just distracting from the viewpoint of users. The advertisers may not care much about annoying users but the search engine certainly does. Why? Because if it shows a lot of irrelevant ads, people will likely stop looking at or clicking on ads. They may develop a terrible affliction known in the trade as "ads blindness." Better ad relevance leads to a better user experience.

So search engines often apply a "disabling rule" that inhibits ads with very low clickthrough rates for a given query from being shown. Or they might set a relatively high minimum cost per click for ads that don't attract much interest from users as a way to discourage advertisers from showing ads that annoy users and deliver few clicks. A high cost per click can easily be consistent with a low cost per impression when clickthrough rates are low.

So why are quality scores important? Answer: they lead to a better auction by allowing advertisers to buy clicks, publishers to sell impressions, and users to see relevant ads.

Posted by Hal Varian, Chief Economist

Facts about our deal with Yahoo!

Some people have questions about our advertising agreement with Yahoo! and there are some misconceptions about it. So today we are putting facts about the deal on a new website to provide more information on the agreement and why it is good for consumers, advertisers and publishers. We'll be updating the site regularly, so check back when you have additional questions.

Posted by Karen Wickre, Google Blog Team