Confessions of a Quackbuster

This blog deals with healthcare consumer protection, and is therefore about quackery, healthfraud, chiropractic, and other forms of so-Called "Alternative" Medicine (sCAM).

Sunday, November 20, 2005

How Google Tamed Ads on the Wild, Wild Web

How Google Tamed Ads on the Wild, Wild Web

Published: November 20, 2005

FIVE years ago, Web advertisers were engaged in an ever-escalating competition to grab our attention. Monkeys that asked to be punched, pop-ups that spawned still more pop-ups, strobe effects that imparted temporary blindness - these were legal forms of assault. The most brazen advertiser of all, hands down, was X10, a little company hawking security cameras, whose ubiquitous "pop under" ads were the nasty surprise discovered only when you closed a browser window in preparation for doing something else.

Today, Web advertisers by and large have put down their weapons and sworn off violence. They use indoor voices now. This is a remarkable change.

Thank you, Google.

Without intending to do so, the company set in motion multilateral disarmament by telling its first advertisers in 2000: text only, please. No banner ads, no images, no animation. Just simple words, which would go either at the very top of the page, above the search results or, alternatively, as the experiment evolved, at the far right. These "sponsored links" had to conform to strict limits on length and aggressiveness in punctuation and phrasing. If you wanted to claim in your ad that you were the "best," you had to display the third-party authority that authenticated the claim.

Google introduced these ads at the very moment when X10 ads were strewn like chewed gum on every square of sidewalk. X10's pop-unders were accepted at mainstream sites run by companies including Microsoft, Yahoo and The New York Times.

In a survey in mid-2001, X10's company Web site was the fourth-most visited in the online universe, though the statistics did not distinguish between voluntary and inadvertent visits. Its apparent success led some in the advertising industry to publicly endorse the loathsome pop-under. Brian McAndrews, the chief executive of the online ad agency Avenue A, was quoted in Advertising Age in 2001 as saying, "Just because something is intrusive doesn't mean it's bad."

This was the reigning orthodoxy when Google began its idiosyncratic foray into text-only advertising. Not everyone within Google was confident that an alternative model would fare well, or that Google would be able to accept advertising in any form without alienating its fans, who had enjoyed using its search service without encountering a single advertisement on the site during its first year of operation.

Knowing that an entirely free service was not likely to last, some Google users offered to subscribe for $10 or $20 a year, if spared exposure to commercial messages. Google executives seriously investigated an ad-free subscription model. In the meantime, the major online ad networks were knocking on its door, offering a turn-key advertising service. They would supply the paying sponsors and the banner ads; Google had only to sign on the dotted line.

Sergei Brin and Larry Page, the Google co-founders, were more receptive to internal suggestions that could not be found in a marketing textbook - like text-only ads. These could be created by a business of any size; the format would permit a business to try out hundreds, even thousands, of variations, statistically measure the results and see which ones drew clicks and which did not. This would please advertisers.

But what about this would please users, who were accustomed to 100 percent commercial-free search space? Google thought, or at least hoped, that its users would appreciate that the advertisements, by design, would be matched to the content of each search. Advertisers would not be permitted to buy a block of screen real estate, as was standard practice everywhere else. They would have to narrowly define who their intended customers were, by bidding for the privilege of having their ads displayed only when a particular keyword showed up in a search. At Goggle's insistence, the ads would sit apart from the search results and be easy to ignore.

Marissa Mayer, vice president for product development at Google, recalled concerns raised during internal discussion about the likelihood of encountering advertiser resistance to such an unfamiliar format. At one point near the time of the debut, one of her colleagues leaned over and predicted, "You wait, in a month we'll be selling banners."

It did take a little while before prospective sponsors were willing to try Google's text ads, but soon enough, they attracted the intrepid. Mr. Brin and Mr. Page deliberately offered advertisers instant gratification: pull out your credit card, plunk down a $50 deposit, send in four lines - and in a blink it would be out there, having been automatically processed without a pre-publication review by a humanoid. (Google's language police would follow up later, if need be.)

Ms. Mayer credits small companies for helping to draw the attention, and ad dollars, of Google's big accounts. Because of the sheer number of commercial sites run by small operators - like the one that has bought a sponsored link tied to the unappreciated sport of extreme ironing - their customers add up to a very large number.

Once upon a time, Goto, another pioneer in online ads that was renamed Overture and bought by Yahoo, thought that search result positions should be sold to the highest bidder. Bad idea. Users wanted the order of results determined by algorithm, unswayed by advertisers. That wish became the unwritten law for search. Today, Yahoo and MSN serve up text-only ads in the same peripheral locations on the page as Google, and use an almost identical format. Like Google, they also are fighting the good fight against pop-ups, and forbid advertisers from linking to pages that will bop the user in the nose. Google's model is copied for a simple reason: its ads produce profits that prove that size does not matter.

Some analysts view Google's embrace of text as temporary, predicting that the company will add image advertising to its site just as soon as it can build the infrastructure. Jordan Rohan, an Internet analyst at RBC Capital Markets, said that given the fact that Google serves up 100 million search-query results a day, were the company to add a single photo-quality image to each page, the bits for each page would increase a thousandfold and the resulting load would figuratively "break the Internet."

Is Google holding off on image ads because of inadequate infrastructure? No, responds Ms. Mayer. She says Google uses text for ads because of cognitive science: text has the highest information density and allows users to scan a lot of information at the highest speed, or, as she phrased it, "the bit rate on text is very fast." Anything that gets in the way of speed-reading must go. Google does not permit advertisers to use all-capital letters. (Studies have shown we read those 30 percent slower than properly capitalized words.) Ms. Mayer did allow for one theoretical exception to text ads in the future: when users search for videos. "For a query on videos for baking a cake, then, a video might be best," she said.

The online marketing agency Avenue A, which later became Avenue A/Razorfish, says that about 30 percent of the more than $400 million it will spend on behalf of its clients this year will be for text ads on search pages. Last month, Eric Schmidt, Google's C.E.O., said the company's profits jumped sevenfold in the third quarter, versus the period a year earlier, partly because larger companies were increasingly willing to spend their ad dollars on search-related advertising.

TRUE, major ad buyers still spend a majority of their client's online budgets on banners and display ads and, increasingly, on video commercials. But even in the deployment of these formats, one can see the effects of Google's civilizing influence: these advertisements, for the most part, eschew the strong-arm tactics of earlier times. David Hallerman, senior analyst at eMarketer, said, "Paid search has brought to the fore the cliché 'the consumer is in control,' and there is no going back."

Mr. McAndrews, the onetime defender of intrusive pop-unders, has taken note. He is now the head of aQuantive, the parent of Avenue A/Razorfish. When reminded last week of his past statement that intrusive-doesn't-mean-bad, Mr. McAndrews said, "I've evolved my thinking. The key is no longer intrusiveness; today the mantra is relevance." No ad is more relevant to a user than that linked to a Web search, he said.

As for the scrappy X10, it survives and still advertises on the Web. In fact, it advertises on Google. Search for "Web security camera," and you'll see its ad. But this bears no resemblance to its old pop-unders with the leggy female models. Today, X10 must sit quietly on the right with the other sponsored links, dressed inconspicuously just like its neighbors in plain text.

Randall Stross is a historian and author based in Silicon Valley.

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