Google Spills Display Beans at Barbecue

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google_recruiting_small.jpgADOTAS – Secretly I was hoping I’d show up at Google’s burgers and display event at Chelsea Market and be led to a rooftop where CEO Eric Schmidt – complete with chef’s hat, plaid shorts and “Google the Cook” apron — was manning a grill packed with ground chuck. “Cheese?” he’d ask while cofounder Sergey Brin passed me a cold one.

Alas, I walked into a conference room, certainly a nice one, and the burgers were served by sassy caterers. Still, the company was quite notable – Barry Salzman, the DoubleClick veteran who recently took the role of managing director of media and platforms, sat next to me and was very chummy, while Lexi Reese, director of sales for the DoubleClick Ad Exchange, fraternized with a Wall Street Journal tech reporter.

Oh yes, the interactive ad press was there in force, including reps from All Things D, AdExchanger and eConsultancy, all munching on pasta salad and shoestring fries while conversing with the likes of Neal Mohan, vice president of display advertising products, and Brad Bender, director of product management.

Far nicer than a press conference (the burgers were a tasty medium rare), Google was reaching out to the press after announcing the previous week it had roped together all of its non-search display offerings into the Google Display Network. This includes all YouTube display advertising, any display on Google’s various owned pages (finance, maps, blogger, etc.) and all the web and mobile sites in its partner network.

“Eight to ten years ago agencies would give us the time of day,” Saltzman said. “But in the last few months they’ve been embracing online media, rich media in particular…. We’re beginning to hold high-level conversations about digital strategies.”

As it’s made clear for a while, display is the next big advertising frontier for Google, with Henrique de Castro, vice president of global media and platforms, suggesting that the $20 billion spent annually could double in the next few years. Google is expecting a “great convergence” in which all media will become display empowered, including traditional media such as TV, as well as social — mass targeting will become the norm.

“Because of our presence globally, we can be in every media space,” de Castro said. “Google tends to do long-term bets and this is one.”

Eileen Naughton, director of media sales and operations for the Americas, noted that display advertising had already increased tenfold this year and that Google was serving 50-55 million impressions daily.

The greatest challenge for the segment seems to be the inherent inefficiencies, with Mohan citing that much maligned comparison of transaction costs between online display and TV ads: 20% of cost for display can be tied to transaction versus 2% for TV.

So step one in realizing Google’s display dreams is simplification, which ties to enhancing ad performance and opening the ecosystem through the ad exchange. Mohan noted that the company is investing heavily in engineering and will continue to do so over the next several years.

The company that has dominated search is striving to build a more comprehensive platform, tying display and search initiatives together. However, the execs made clear Google has no plans to exploit user search data for display targeting

Yahoo and AOL may immediately come to brands and agencies tongues as the go-to networks for premium display, but in addition to raising its display profile with those parties, Google is encouraging search advertisers, many who have never tinkered with display, to dip their toes in Google’s display pool. Of the 20,000 users taking advantage of the recently introduced AdBuilder, Bender reported that 80% were new to display advertising.

“We’re bringing the science of search across to the world of display,” he noted.

Google is providing two distinct solution sets: one for direct marketers expanding into display and the other for brand marketers aiming for specific audiences via targeting. Bender also noted that Google is prepackaging inventory to improve efficiency and allowing the integration of third-party ad servers.

On the analytics front, the company is offering “campaign insights” that measure the lift coming back to an advertiser’s website, and “above-the-fold targeting,” which uses a statistical model to show whether an ad is 100% above the browser break.

Also integrated into the Display Network is YouTube, which now offers seven different homepage ad formats, tied into the DoubleClick Media Platform. As we chowed down, the news of Hulu’s subscription service broke, but Baljeet Singh, senior product manager for YouTube, dismissed the idea of something similar for Google’s video service.

YouTube has witnessed a great deal of innovation by advertisers, especially around the World Cup. Naughton noted that instead of television commercials for the World Cup, Visa encouraged users to upload their own content to its channel — halfway through the tournament, Visa’s page has witnessed five million hits.

Google is even seeking to help publishers optimize their revenues through public APIs that pubs and third parties can build on top of. Jonathan Bellack, product director of publisher ad platforms, sees 4,000 times as much data in its updated system, which he said is far less manual and more integrated into the Display Network.

On its recent acquisitions, Bender noted that while its tech will be integrated into Google’s platform, recently acquired DSP Invite Media will remain independent and work with other networks and exchanges. This is similar to its integration of dynamic creative enabler Teracent. On AdMob, the execs noted that the integration was under way and had no real comment about iAds and Apple’s pending developer agreement that bars AdMob from Apple mobile devices.

All in all, Google seems less like it’s trying to conquer the display world than establish itself as the central resource for all players in the digital media buying space. Eventually, that role could stretch to all media — perhaps they’ll upgrade the burgers to filet mignon for that get-together.

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