Google’s Innovations in Web Marketing
http://www.forbes.com/sites/roberthof/2016/09/25/google-connects-display-ads-to-store-visits-and-tv-ads-to-brand-searches/#228a071277c3
In the article, “Google Connects Display Ads To Store Visits And TV Ads To Brand Searches,” published last month, Forbes contributor Robert Hof details how Google is innovating online ad marketing. The increase in advertising opportunities from physical stores to online and mobile platforms presents unique challenges for advertisers. Google has studied the patterns in the effectiveness of advertising across various platforms and offered several solutions for marketers. TV ads are generally acknowledged as less effective as they cannot be targeted to consumers. Researchers at Google have used search statistics to determine that Youtube ads tend to generate more online searches than TV ads do. These results are logical not only because it is more convenient to make online searches from Youtube ads than from TV ads, but also because of the ad’s relevance to potential customers. This is an example of remarketing, which is a method of showing the same website or ad to a media consumer based on what they recently browsed. Google’s new form of remarketing tracks browsing across devices for coherent remarketing for the same consumer.
This article relates to our class discussions of web searching and market clearing in the online ad market. Search engines like Google sell ad spaces on a user’s search results. Each advertiser has a value for whether they want to display their ad to a consumer. Related to our class discussion of auctions, online ads are auctioned to advertisers by search engines, who are the sellers in this case. Valuations follow the GSP model as described in class. Though closely related to second price auctions, this principle slightly differs from it. These concepts relate to the article’s discussion of how ads are valued based on a variety of sources.
Online ad markets are relevant not only to this course, but also to the internet in general and innovations in marketing. Though ad markets also raise the issue of privacy on the internet, the topic is an interesting application of class concepts on auctions and market clearing.