Google's Search for Ad Dominance

The company's new Ad Planner has already hit the competition hard, but will it really follow through?

By Robert D. Hof

Despite online advertising's promise of pinpoint targeting, finding just the right audience for a particular ad remains more art than science. That's all the more true as myriad social networks, blogs, and other services have splintered audiences across thousands of Web sites, making it increasingly tough to target large enough demographic groups.

Now Google (GOOG) is aiming to jump-start a fledgling drive to turn that art into a science—and once again, the ambitious search giant's efforts are roiling the ad industry in the process. On June 24, Google introduced Ad Planner, a free online service that lets media planners plug in the age, language, or other characteristics of people they want to reach. The service then spits out a list of Web sites that attract audiences with those characteristics so the planners can place ads on them. Although some startups such as Quantcast already use similar approaches, Google's entry, coming from an aggressive online leader with vast resources, could accelerate the digital transformation of advertising—and help the company burrow its way even deeper into Madison Avenue.

Prime Web Data

That's because few companies can match the fearsome data-gathering capabilities of Google. For one thing, "Google has the broadest audience to draw their data from," says John Squire, chief strategy officer of online data analytics and marketing firm Coremetrics. Google also has spent billions of dollars on software and computer servers to track and save myriad data on the complex interactions of people and services on the Web, amassing a data trove widely considered to be among the world's largest and most detailed.

Google's approach presents a stark contrast to the decades-old methods of analyzing mass audiences and divining their buying preferences. Even the current leaders in online measurement, comScore Networks (SCOR) and Nielsen//NetRatings, rely chiefly on those same methods. They estimate Web activity by analyzing a sample of Web surfers who have agreed to let the companies track their online wanderings. Although advertisers and ad agencies crave such data, critics say the firms' consumer panels may not represent the Web population at large, and often result in smaller or niche sites getting underrepresented. Google aims to allow much more precise targeting by going beyond estimates and tapping into its own extensive pool of data on what millions of people actually do online. Google isn't saying precisely which information sources it's drawing from, but it's using search data, its own analytical data on Web sites, unnamed market research from other companies, and outside consumer panels.