Google's Grab for the Display Ad Market

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Some 80% of those using it had never bought a display ad before. Marc Loge, who handles online ads for the Wilshire Grand Hotel in Los Angeles, had run search ads exclusively and didn't want to bother with display. But at Google's urging he quickly created a bare-bones ad and ran it on Google's Web sites. "We've gotten great returns—even better than search," says Loge.

DEPARTING AD EXECS

At the same time, Google wants to bring onto the exchange more large Web sites, which control the bulk of display-ad revenues. DoubleClick's relationships with the biggest Web publishers may give it a leg up. "Google is very central to our strategy," says Curt Hecht, president of the tech development unit at VivaKi, ad agency Publicis Groupe's media and online operation.

Still, the exchange won't be an instant game-changer. Since exchanges require a new mindset at agencies and publishers, they may take time to catch on widely, says Mike Walrath, founder of Yahoo's Right Media exchange. And some think anything but search gets short shrift inside Google. "Display is still the redheaded stepchild of their ad initiatives," says Rob Leathern, CEO at CPM Advisors, which helps advertisers improve their online campaigns.

Insiders say that's partly why Google has seen a stream of departures of ad executives in the past two months who see more opportunities elsewhere. Most recently, David Rosenblatt, president of Google's display-ad efforts and former DoubleClick CEO, left in May. But Brin insists Google is serious. "Display is going to be a large business for us," he says. "It's not just an experiment."

Hof is BusinessWeek's Silicon Valley bureau chief.

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