Google Sees Brand Advertising Progress

NEW YORK Google said it is having success convincing advertisers to adopt its platform for brand building, as it seeks to expand beyond its roots as the world’s most successful search engine.

The moves into brand advertising online, and further initiatives to expand into offline media like radio and print, still represent a tiny part of Google’s booming business, company executives said. Text listings, mostly on search results pages, are still driving Google to dominate the online ad market.

In the fourth quarter, the company said it took in $3.2 billion in gross revenue, $976 million of which it paid to publishing network partners. Google’s net profit rose to $1 billion, triple the fourth quarter of 2005.

“We’re talking to advertisers about using Google for all of our advertising incentives, not just text search,” Google CEO Eric Schmidt said in a conference call to announce the company’s earnings.

Advertisers like Office Max, Volvo and Procter & Gamble are using Google’s far-flung AdSense network for graphical and video brand ads, according to Omid Kordestani, Google’s svp of global sales and operations.

Volvo, for instance, used the network to create its own mini ad network of auto enthusiast sites. Google provides advertisers the ability to pick and choose a list of sites to show their ads based on the subject matter of the destination and audience demographics.

Schmidt said Google expects mobile search to take off in 2007, yet does not anticipate it becoming a substantial business for Google until next year.

He said Google would tread carefully in introducing advertising to YouTube, which is still operating as an independent company in the aftermath of Google’s $1.65 billion acquisition.

Last week YouTube CEO Chad Hurley suggested to the BBC that the site would consider putting short ad clips before some user videos, the most common form of online video advertising, known as pre-roll video. Schmidt said Google would experiment with a variety of advertising options, but cast some doubt on the effectiveness of pre-roll ads, which Google and YouTube executives have in the past said provide a poor user experience.

“Pre-rolls have historically not made sense, and there’s some evidence that the traditional pre-rolls people have done have not worked,” Schmidt said. “But we are certainly looking at alternatives and variants on the pre-rolls as well as post-roll, and also in-context advertising.”