Google's Next Challenge: Display Ads


Can Google, the master of online search advertising, harness another form of advertising—display ads—and pull in more millions?

No one can answer that question yet. But Google’s impressive young history has its many fans learning toward the affirmative.

“What I’m hearing from the advertising side is that Google is working the hardest, and the advertisers love their new tools,” Michael Learmonth, senior editor of Advertising Age told CNBC. “Google is gaining these capabilities quickly.”

In April alone, Google powered more than 10 billion US searches, dominating two-thirds of search market share.

Google revolutionized every step of the advertising process, creating options that streamlined the process of selling ads, allowing any company, no matter how small, to place ads through its Adsense, using its Adwords for narrow targeting and delivering clear metrics on how ads work. Through Google, marketers were able to instantaneously adjust their strategy.

The company’s reach in technology is sending aftershocks through Madison Avenue. Its auction model that sets rates for advertising models is now an option for radio, print and TV. Google is challenging agencies like Hill Holiday to step up accountability and measurability.

“They absolutely made the whole notion of connecting, supply and demand so much more friction-free than it’s ever been before,” said Hill Holidaychief media officer Baba Shetty.

“The whole ROI threshold for advertising has increased because of the performance of the advertising that Google has put into place.”

What threatens Google’s latest quest, though, is competition.

Microsoft’s search engine Bing grew to 11.8 percent, up from 8.2 percent last year. Appleis launching iAd for its iPhone and iPad apps, and Facebook, a force in banner ads, has delivered more in the first quarter than any other site.

Watch "Inside the Mind of Google", hosted by Maria Bartiromo, Friday May 14 at 10pm ET on CNBC.