Over the weekend, we heard Google acquired DoubleClick for $3.1billion. Earlier this month, BusinessWeek asked the question, “Is Google Too Powerful?”, and now eMarketer’s David Hallerman suggests Google will become a monopoly because it will own over 25 percent of the market. Google’s projected online ad revenues for 2007 are expected to net $6.3 billion, and the total U.S. online ad revenues are projected at $19.5 billion.
Google is a major gateway to the web, since about 400 million users per month logon to their Google home page. Everyone knows Google has extensive data on user search and behavior. Just think what it can do with all this data by serving targeted ads along with relevant results.
Recently, Hitwise reported that Google owns 64 percent of the search market share. That leaves 22 percent for Yahoo, 9 percent for Live Search, 3 percent for Ask and 5 percent for the other search engines. Other estimates of Google’s market share may be lower, but Google dominates and has for years.
While Google dominates the paid search market ($10.6 billion in paid search revenues in 2006), it has been struggling to get a toehold in print and radio advertising. Watch Google dominate the advertising market with the DoubleClick acquisition. This will help Google make inroads into display advertising with DoubleClick’s involvement in all areas of Internet advertising.
Google co-founder Sergey Brin believes display advertising is important, and DoubleClick CEO David Rosenblatt believes display ads could grow as much as search has over the past few years.
Paid search is expected to account for over 40 percent of online advertising (projected at $19.5 billion) in 2007 (eMarketer). On the other hand, display advertising came to $3.34 billion in 2006 and is projected to reach $4.5 billion by 2010 (eMarkter). Paid search came to $6.76 billion in 2006 and is projected at $10.3 billion by 2010. Display ads will likely do better as targeting improves. Already, marketers are investing in search retargeting by displaying banners on sites where site visitors will likely visit, and these services are slated to increase as conversions increase with retargeting. Additionally, ad networks are getting better at targeting site visitors based on past behavior.
The personalization of the web all bodes well for Google, and Google is at the forefront of personalization.
The only fly in the ointment is that with Google’s vast database, B2B searches are not as relevant as they can be. Last year’s Outsell study shows a search failue rate of 31.9 percent for business users, and vertical search engines are becoming more popular with business and professional users who need specific industry information and fast. Additionally, with Google’s business so diversified, it needs super organizational development skill to keep from becoming a slow corporate giant that can’t resond quickly to market fluctuations.
Source: BusinessWeek
Source: eMarketer
Posted by Paul J. Bruemmer
9:30 AM
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