Google has been quietly inviting some websites to participate in a Display Advertising Network, which will place some very profitable CPM ads from Fortune 1000 companies on a publisher’s site.
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Chow claimed this effort would target those Fortune 1000 companies, and when it comes to branded display advertising, Yahoo has done well for quite some time on that, even as its contextual ads fell behind Google’s rise to prominence.
The only way to get in to Google’s new network is by invitation. One won’t find it in a Google search or in the help files for AdSense or AdWords. Accept the invitation, and Google will run display and video ads on the target site.
Chow discussed some of the specifics of the plan:
While Google won’t tell normal AdSense publishers what the revenue split on their account is, they are much more open with the display network. As a matter fact, every display network members negotiates a flat CPM rate with Google. The contracts are one year long and publishers have to guarantee Google that they will provide a minimum amount of ad inventory each month. Publishers can serve more than the minimum amount and still receive the same CPM rate for the overage.
Reporting by the display network is currently via weekly emails from Google. The information is extremely limited. The only information shown is your weekly ad impressions and page views. Take that ad impression figure, multiply it by your CPM rate and you’ll have how much you made.
While Chow cannot say what he is making, he does note that a Display Network ad running on his site, The TechZone, is his most profitable advertising property.
Pat McCarthy blogged about this at Conversion Rater, and took issue with the year-long contract requirement and the flat CPM rate for that period:
It is possible the contract just holds the rate you agree on to be steady, which may sound good on the surface to the publisher, but actually can hurt you. If you lock in with Google at a $5 CPM for a year, what happens if you have advertisers coming to you willing to pay much more but you’re allocating inventory to Google to fulfill some contract?
…let’s say that’s a $5 CPM flat buy. That may again sound really nice to you as a publisher to have that guaranteed rate, but that allows Google to go sell your inventory at whatever price they want, and only give you a $5 CPM. What if they can sell it for a $10 CPM to the advertiser? Are you happy with a 50% revenue share? I wouldn’t be.
Supporting this effort will require a significant commitment from Google in terms of staffing a sales and marketing force. Considering their recently opened office in New York city dedicated to that purpose, it now looks like Google just wanted to have agents closer to their desired Display Network advertisers.
Google and Yahoo are both up in Pre-Market trading ahead of the opening bell on Wall Street. Today’s close should be interesting to see as investors begin to respond to this news.
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David Utter is a staff writer for Murdok covering technology and business.
