Does Google’s display strategy spell doom and gloom for ad networks?

OK, it’s about time to think of something innovative for Google in SEM. Yes, Google now has universal search, but essentially the basic look of its results page hasn’t fundamentally changed in 10 years.

Worse, the capabilities for advertisers to reach their consumers on that results page is about as dynamic and rich as, well, a rock. The only thing a rock is good for is throwing at someone. Maybe someone should throw a rock at those ads on the right side of Google’s search results page.

Outside of search Google does provide a variety of ever-expanding options to reach consumers through the company’s various print, radio, even TV extensions. In many ways, Google is a media vulture circling every consumer advertising touchpoint it can. But on its main product an advertiser only gets limited characters to work with. Google may have the touchpoints, but what that message looks like is often very important, and what search ads look like make my eyes bleed. Google may get your message in front of consumers, but do we really want to exist in a world where it dictates the creative lens to our consumers?

Never before in history has an ad medium so limiting in communication been so effective, so powerful and so pervasive. It’s all about simplicity, and because of that simplicity, Google succeeded. It was the utilitarian nature of paid search listings that provided a somewhat level playing field for all advertisers. If you bid enough, your small company can outsmart and outsell companies 10 times your size.

So, are the rumors true about Google considering display advertising on results pages? They would be idiots not to. Think of it like an advertiser. You can buy keywords the same way but also have a display ad show up targeted to those keywords. It’s the Holy Grail for click-based display advertisers who rely on ad networks due to their vast reach and low cost. And that represents a significant chunk of the ad space.

So, does Google Display on search results pages kill ad networks? Well, not in the way that a roach motel “kills bugs dead.” But a lot of them will go the way of the dinosaur.

You have to understand the ad dynamic “need state” of consumers and the relationship they have with your product.

Part one is “why” is the consumer there to begin with? Are they actively “seeking” out a product? Are they passively exposed to it? Is it a “high-consideration” purchase product? The consumer’s mind-set is crucial.

The second factor is what is your product? Do you have a product that is high-cost/high-consideration? Are consumers familiar with your product offerings? Is your product new? Is your product “mass” or “niche” in scope?

I’ll get to who it works for and who it doesn’t later, but if Google does make the move, there could be a profound effect on the entire industry. Large sites with inventory they cannot fill rely on ad networks for that boost in income. Those sites have to do little work and yet reap the benefits of ad sales armies at the networks.

So what happens when the bread and butter clients of the ad networks have their clients get more precise targeting with their consumers on Google?

Why does targeting even exist?
The targeting options available now for display leave much to be desired. Even on ad networks and large portals with vast amounts of information, you are still supplying them with a demo profile of the target you want to reach. But you have to ask yourself: Why does that target even exist?

Well, it exists because research showed the client that this group of people had a higher propensity to buy their product. All the clients are doing is improving their odds for success by delivering ads that are more likely to reach that sub-group because that helps them to a better, stronger ROI.

But what if you could ignore the whole concept of targeting to begin with? Google SEM display would not be targeting at all, it would replying-to-interest. And that is where the difference lies. You are not targeting anyone. It is the difference between someone who is looking for a pediatrician, notices the sign in your window and knocks on your door (Google Display Search), and you wanting to expand your business and going into a neighborhood with a lot of kids, and thus parents of kids, and driving your car around with a sign on it (Display Ad Targeting).

It will all end up depending on your product and how creative you are. You have to make a split between advertisers who are trying to change consumer perception of a brand or product through communicative messaging, and those who are just trying to serve a consumer need state. There is a fundamental difference between direct response and brand advertising.

So who does this work for?
This process works for brand categories that have many consumers already in the market. For example, if someone types in “Ford Focus,” your text ad will serve the consumer very well if you are Ford. But what if you’re Toyota? Isn’t that the perfect time to tell the consumer why your vehicle beats out the Ford Focus in several categories? This would work for all competitive targeting of that product, but what it would not work for is everything else.

You can get creative and target keywords that are associative keywords to your category, but it’s doubtful that Google would allow that type of leeway for display since it is currently fairly strict when it comes to SEM paid listings. Relevancy to consumer is Google’s highest goal.

But what you’re doing there is different from mass display. The mass ad networks display advertiser is often trying to put products the consumer doesn’t know they want in front of them. It’s Toyota introducing that car to consumers who are much earlier on into the purchase cycle, so that when they do reach the next stage, they type in “Toyota 4runner.” And that’s where Google display would fail for them, because the consumer probably wouldn’t ever type in a relevant keyword. Yes, you could get them when they are at the “car” keyword level, but that’s about it. For brand messages attempting to convert someone over time, or for lower consideration impulse products, it is perfect to stay in mass ad network display mode.

But for display SEM, think of three things:

1. Consumers you have already communicated with through brand messaging;
2. Brands attempting to switch products within a category;
3. Niche products within categories that would be wasted in mass display.

Who doesn’t this work for? Those hundreds of thousands of users in mom-and-pop shops and smaller businesses that don’t have an advertising agency on retainer. They do not have the resources to create a display banner campaign, nor do they have the aesthetic sensibilities. If you screw up ad copy in SEM or just write like crap, it’s pretty hard to screw it up too bad in the 25, 35, 35 character restriction. Those shops are able to compete in a “text” only world.

But an ugly ass banner? It burns out our eye sockets with its insidious evil. It would be the equivalent of the Blink tag. Remember that? No? Be thankful.

Something tells me that Google might be just a little too frightened of the implications of killing the goose that the laid the golden egg — paid search listings, the long tail of small business. Should the ad networks be worried? Of course they should. But if they start looking at their client base now and figure out why they meet a different need than what Google Search Display would be, they should be able to fend off the wolves for a while.

Well, until Google incorporates the same technology across its normal display network and allows brands to cookie the view of those users, yup, then those ad networks will pucker up real fast.

ranty rant signing off…