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Google predicts huge online display advertising growth

June 01, 2011 By: Dr Search Principal Consultant at the Search Clinic Category: Customer Service, Ecommerce, Google, internet, Online Marketing, Technology Companies, Uncategorized

Having cornered the online classified search market, Google is now targeting online display advertising.
Google predicts huge online display advertising growth

Google’s vice president of display advertising products Neal Mohan has been tasked with emulating the company’s unrivalled success with online search in the digital display market.

Neal Mohan is known as Google’s $200 (£125) billion man.

The $200bn figure, he says, is a forecast of the potential size the global online display advertising market could reach. He, and the digital display sector – currently worth about £15 billion annually – have a long way to go. But the goal is open.

Broadcasters, print media companies and marketing services groups also have an eye on digital display as a potentially lucrative revenue source to offset declining offline advertising income.

By helping to grow the digital display market, Google would be giving media companies a leg-up as well, he says. “I truly believe that $200bn is the opportunity. We think there is a tremendous opportunity not just for Google but for the [media] industry.”

However, altruism aside, Google has its own obvious motivation for eying up the digital display market. In 2010 Google had revenues of $30 billion (£18 billion), with display estimated to have contributed just $2.5 billion (£1.5 billion).

Last year in the UK, Google’s second largest market, the total display advertising sector grew by a staggering 27.5% year on year to £1bn while search grew just 8%, albeit to £2.35bn, with much of it lining the US company’s pockets.

Enders Analysis reckons that Google UK made £100m in display advertising last year – a small sum compared with total net UK revenues of £1.53bn, but a 65% year-on-year rise.

Mohan, who joined Google in 2008 when it made the $3.1bn acquisition of DoubleClick that marked its entry into the display ad market, argues it can overcome a “big barrier” in the sector to the mutual benefit of all parties.

“The world is extremely fragmented, with the proliferation of devices, mobile apps and websites, there is infinite fragmentation,” he says. “A lot of media dollars are destroyed through fragmentation and inefficiency, there is a lot of wastage and campaigns are less effective. Our approach is how to be an end-to-end platform in the market.”

This potential alternative would draw on Google’s experience with online search – a one-stop digital shop that agencies could use to buy ad space across different devices, in real time, basing their decisions on constant feedback on viewing behaviour.

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