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Google steps into banner ad world
Cue shake-up in marketing departments...

By Stefanie Olsen

Published: Monday 25 April 2005

Google is taking a big step toward becoming an online banner-advertising network as the market for brand ads heats up.

Beginning today, the search giant will start allowing advertisers to display animated image ads on third-party partner sites - a first for Google and a departure from company founders' early stance against such web advertising. (Google itself still shows only text ads on its site.)

Google will also allow advertisers to designate on which third-party websites their ads will appear, whether it's large partner sites like The New York Times or smaller pages.

The move is another first for Google and could resolve a longstanding complaint among advertisers who want more control of how and where they target promotions. Previously Google advertisers could bid only on keywords to appear in text ads across any of hundreds of related sites in its network.

Finally, to take advantage of the program, advertisers must bid for placement on a cost per impression (CPM) basis, as opposed to Google's stock in trade cost-per-click (CPC) search ads. CPMs are modelled more closely to brand advertising like TV commercials in which marketers pay based on the number of people who see the ad. In contrast, marketers pay only for CPC ads when people click.

Patrick Keane, head of ad sales strategy at Google, said: "We think highly targeted [display] advertising will work."

With the move, Google is helping stoke a revival of the online ad network that enjoyed popularity in the late 1990s. At the time, early industry leaders like DoubleClick, 24/7 Media and Engage controlled the ad sales of tens of thousands of publishers' sites, targeting display ads like banners based on specialty categories such as cooking or sports.

They also began to target ads to Web surfers' behaviour across swathes of pages before the bubble burst. Many of their fortunes faded during the dot-com bust, roughly when cost-efficient search marketing that Google's now famous for began to take hold.

Today, ad networks such as Fastclick and Advertising.com have regained some power of the early networks without the status. Consequently, Google could be a weighty competitive force.

Kevin Lee, president of search engine marketing firm Did-It, said: "It's the return of the ad network. It's a big deal because it puts Google squarely in competition with the graphical banner networks.

"Clearly this is an attempt to get at brand advertisers," he added.

Stefanie Olsen writes for CNET News.com