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GOOGLE TO SELL TV ADS? SEARCH GIANT'S WILLING TO TRY

Co-Founder Sergey Brin Looking Beyond Web

MOUNTAIN VIEW, Calif. (AdAge.com) -- Google is the latest entity interested in trying its hand at changing the way TV ads are bought and sold. Google co-founder Sergey Brin said this week that the company is looking to expand its auction-based model for Web advertising to TV and other media platforms.

Already experimenting
During a question and answer session at a press day on the company's Mountain View campus, Mr. Brin said Google has already experimented with radio and magazine auctions, so TV is a logical next step.

"We're going to continue to try out different media," he said. "I'm certain that we can bring something to the table in these different areas, and hopefully it's enough to make a big difference and we can make each of those markets more efficient," he said. "But certainly we can't be sure of that. We're going to continue to try."

Earlier this week, Julie Roehm, senior VP-marketing communications, Wal-Mart Stores USA, proposed an auction-type system hosted by eBay for buying and selling TV advertising. Her comments came at the Association of National Advertisers' Financial Management Conference in Naples, Fla. She called on marketers to pitch in $50 million for a test of an online auction system.

In its proposal, eBay envisioned a trading system that would be owned and controlled by the ad market; eBay would likely take a small slice of transactions as a fee. But media outlets would decide how much of their inventory to offer on the system.

Adsense rolling
Not that Google is trying to diversify because it sees its Web and search ad revenue drying up any time soon. Google's Adsense model will be in demand as long as entities put pages up on the Web, Mr. Brin said. As for marketers, he said, demand is flourishing. "With the ROI advertising systems we have been able to develop, many of our advertisers will take as much inventory as we can send their way." If inventory doubled in the immediate future, "advertisers would be happy to go ahead and double their orders," he said.

During the session, Google CEO Eric Schmidt said the search giant also has its sights on mobile-search revenue. Mr. Schmidt noted there are three times more mobile phones in use today than personal computers. Mobile search will have to be tailored to fit on a mobile screen, he said, because its small size does not lend itself to the long lists currently presented on the PC screen. Mr. Schmidt also tempered Mr. Brin's suggestion that Google is looking at TV, saying that more likely an ad auction system would apply to Internet video ahead of broadcast.

Google is currently running a trial for mobile search in Japan. That test includes location-based services -- that is, finding the location of a phone and linking marketers with the consumer. But Mr. Schmidt envisions mobile searches going beyond simple functions, like finding the number to a local pizza shop. Eventually, the company wants to integrate mobile search with a phone's camera function, enabling users to snap a photo and use mobile search to identify the person or object photographed.

'We're busy'
Mr. Schmidt, however, during a question-and-answer session, said his company does not plan to enter the telecommunications business, either by rolling out Google's planned San Francisco Wi-Fi service to other locations or by becoming a wireless-service provider. "We're busy," he said dismissively.

Interestingly, as the company faces more competition from Yahoo, Microsoft and others, Google expects to get paid higher advertising rates. There is a "surprising at least, if not bizarre, aspect in many cases" that more competition in an auction can cause the price to rise, Mr. Schmidt said. "More search, more users, more advertisers, more innovation," he said. The model was built to grow without limits, he said. "I'm sure there are limits," he said. "But we don't see them today."

When asked whether Google will add advertising to Google News, Google co-founder Larry Page said it's probably on a company to-do list, but it's not a priority and he doesn't know when it will happen.

Graphing search trends
Google used the annual event to announce four new products, one of which -- Google Trends -- could be useful to marketers and advertising agencies. Google Trends shows graphs of search patterns for various terms or products, allowing users to quickly see what items are on people's minds. Dave Luhr, CEO, Wieden & Kennedy, said the tool would be good for planners, especially if it can be done in real time.

Google executives cautioned, however, that Google Trends is still a test product and it's only being updated monthly. One project developer at the session noted the disclaimer currently on the product: "Google Trends aims to provide insights into broad search patterns. It is based upon just a portion of our searches, and several approximations are used when computing your results. Please keep this in mind when using it."

By Alice Z. Cuneo Mailed 2006-06-06

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