) flagship advertising products. It’s how Google makes its billion of dollars. Highly targeted text ads appear on Google search and third party websites that are part of the AdSense program. Advertisers buy ads based on keywords, with more popular keywords costing more per click than less popular terms. This has only applied to text ads though, not banner or display ads. But speculation was rampant that Google would apply its unique and lucrative ad model to display ads after its $3.1 Billion DoubleClick acquisition.
Now that speculation has become reality. Google has just launched the DoubleClick Ad Exchange, and it is just like AdWords and AdSense, except that it is a marketplace for display ads.
First, here is what Google said in its announcement:
“We’ve been working hard to put these principles into practice, and today we’re excited to announce the new DoubleClick Ad Exchange, a step towards creating a more open display advertising ecosystem for everyone. The Ad Exchange is a real-time marketplace that helps large online publishers on one side; and ad networks and agency networks on the other, buy and sell display advertising space.
These publishers and ad networks manage and represent large volumes of ads and ad space from lots of advertisers and websites. By bringing them together in an open marketplace in which prices are set in a real-time auction, the Ad Exchange enables display ads and ad space to be allocated much more efficiently. This improves returns for advertisers and enables publishers to get the most value out of their online content.”
Essentially, the small-time advertiser or business can now buy targeted display ads on thousands of DoubleClick ad-serving websites. This could have some major repercussions on the entire web. Some possibilities:
- It could significantly increase revenue for Google, as a highly targeted ad marketplace means people are paying more for the ads they want to serve.
- It increases Google’s competition with Yahoo, the current leader in display advertising.
- Highly targeted ad campaigns could effectively reach everywhere. This could be a major boon to marketers.
If you want to learn more, Google has a PDF explaining the Ad Exchange, as well as a video overview: