Are Google Display Ads Losing Magnetism?

April 26, 2012

Business Insider recently reported on the latest in Google advertising in the article “Here’s One Reason Why Google’s Ad Prices May be Dropping.”

According to the article, Google’s ad prices are down by 12 percent from the previous year and this is the second quarter in a row that this has happened. The reason for this? One unnamed person who is familiar with Google’s ad business has a theory.

While Google has added new display advertising inventory, the search giant is having trouble getting small and mid-sized businesses to buy it.

The article states:

“With Google’s traditional search advertising, which still makes up the vast majority of its ad sales, a lot of small and mid-size businesses bid on keywords. This tends to drive prices up.

But display ads still have fewer bidders — mostly larger companies, since smaller companies don’t see the immediate and obvious return on investment that they do with search. It’s harder to track, for instance, the many times a user has seen a display ad before they actually click to buy something.”

It looks like Google needs to do a better job of encouraging smaller businesses to purchase display ads if it wants to continue its reign as search king.

Jasmine Ashton, April 26, 2012

Sponsored by PolySpot

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