Silicon Valley Watcher - Former FT journalist Tom Foremski reporting from the intersection of technology and media

Scoop! Google to provide AdWords API to Advertisers

Posted by Candida Kutz - January 20, 2005

by Tom Foremski and Candida Kutz for SiliconValleyWatcher.com

Google is about to announce technology that will allow its advertisers unprecedented levels of control over when, where, and who can view their advertising on Google search pages and those of Google partner web sites.

For the first time, the search giant will provide its advertisers with an application programming interface (API), which will enable them to link their computer systems with Google and control parts of the mammoth Google ad delivery system. The API will allow advertisers to self-administer the delivery, the timing and the price they will pay for their text ads.

This raises the bar in the online advertising market as Google turns to technology to try and outwit and pull ahead of media savvy competitors such as Kanoodle and others. Kanoodle says its average click-through revenue is twice as much as that of Google's because it gives online publishers greater control over what types of advertising is displayed ---and at which times--- and is better matched to page content or search terms. (Silicon Valley Watcher meeting with Kanoodle this week: Geeks versus Media City Slickers...)

The release of the API marks a transition for Google, from an online services company towards that of an IT platform for global ad delivery. The types of sophisticated management tools that will be available from Google and third parties should also help tie advertisers into its ad network.

It is but a short step from the global delivery of simple text ads to carrying commercial transactions also. This would pitch it against companies such as eBay and other online retailers.

The Google API is only available to advertisers and not to online publishers carrying Google ads.

Silicon Valley Watcher also learned that Google assembled its global salesforce of about 1800 people in San Francisco this week to brief them on the new technology, and how it will be marketed. It represents a complete revamp of its Adwords/Adsense text ads program. More details are here.

Google and Overture pioneered the development of advertising networks that deliver simple text advertising with a commercial message linked to web page or search content. In Google's Adwords/Adsense advertising programs, the customers bid against each other for choice keywords related to their advertising message. Google collects fees only when someone clicks on a text ad link. The system is highly automated with a low cost of operation.

Access to the Adwords API will initially likely favor larger companies with the technical skills to optimize their advertising delivery. However, a large third-party services market will grow around the Google API and allow smaller companies to run sophisticated advertising campaigns.

However, many online publishers want to control which Google ads are shown on their sites. This has been a sticking point with many large media groups who have turned to Kanoodle and others.

Some media groups are beginning to view Google as a competitor. The large computer industry trade publisher, IDG, has become increasingly hostile to Google. IDG views Google not as a technology company but as a media company and a competitor to its online publishing business. It has urged other publishers not to give Google access to their web content. A lot of online publishers carry Google Adsense ads because Google splits the revenue with them.

Google has a fraction of the publishing costs compared with a company such as IDG. Google publishes pages of links produced by computers, yet IDG requires large, non-scalable editorial staffs to produce pages of content at a far higher cost.

cd2215

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