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Guest Article: Looking back, and forward, at search ads

10-May-2011
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Guest Article:  Looking back, and forward, at search ads

While cricket fever continues to rock the country after the World Cup, there are a number of advertisers who are making the most of the opportunity that exists on the web. I bet my first statement clogs your brain with a number of annoying banner and pop up ads that you usually experience. But I am not talking about any of that – what I am talking about is search Ads that you see next to your search results. The simple three to four lines of text that appears next to your search results have evolved to become as good as the information that exists on the web.


Imagine a scenario when you go to your favourite search engine and look for cricket scores and you get a simple text ad that not only shows you the live score, but also gives you details of a special cricket promotion that you can avail of. All of a sudden the ad not only provides you the information, but also offers you an incentive to click on it. And this perhaps is just the beginning of things to come. But let’s step back for a moment and see how it all started.

A look back in time
There are a few big dates in Internet history that resonate with importance. To name a few: in October 1969, ARPAnet, the precursor of the modern Internet, connected Stanford University and the University of California, Los Angeles. In late 1971, Ray Tomlinson sent the first e-mail using the familiar “@” convention we know today – he didn’t save it, so we don’t know the exact date. December 1994 saw the release of Netscape Navigator, the first commercially popular web browser.

August 1995 is generally not considered part of this pantheon, but perhaps it should be. It marks the first time a well-trafficked search engine – Yahoo! – ran advertisements on search results, and created the industry of search engine marketing. Just as the web has changed drastically over the last 11 years in both form and content, search ads continue to evolve in parallel fashion.

In the early days of the Web, advertising, including search, was more distracting than useful; ads were flashy, interrupted what you were trying to accomplish, and often had nothing to do with a search or subject on a page. It’s a testament to the power of the web that users put up with such an experience.

Google’s founders, Larry and Sergey believed that advertising could be useful information, but it needed to be presented in a way that was relevant and non-intrusive. Their solution was to offer simple text ads that appeared next to relevant search results on their search engine. When Google launched AdWords in 2000, it managed to do something completely different. Instead of flashy images, it showed three lines of text and a domain name. Rather than show the ad of simply the highest bidder, Google required that the advertiser’s ad be relevant to the search. And, starting 2002, Google started charging advertisers only when someone actually clicked on their ad, a model pioneered by Overture a few years early, which was a radical departure from most popular advertising systems at the time that charged for the volume of times the ad appeared.

Fast-forward to 2010
What’s changed since 2000? For one, there are a lot more people on the web – just shy of two billion – and they’re communicating with one another, learning new information, and using search to solve questions or accomplish tasks, everything from finding out how to file e-tax returns to directions to the closest Barista.

As the web has grown, search advertising has helped grow the business of millions of advertisers, mostly small- and medium-sized businesses, who have found new clients or customers through search ads. For instance, Indian client iYogi, started in 2007, is one of the fastest growing remote tech support providers in the world with 4,500 tech experts because of the international reach they achieve through AdWords.

Meanwhile, Google’s approach of performance-based pricing has become a model for other successful search and social networking platforms. At the same time, those three-lines-of-text ads you see on Google and other search engines have been getting a lot smarter, going beyond simple text. Online information today is richer than it was in 2000, the web is now full of images, maps and videos. This means ads also now need to include richer information to make them more relevant.

Today, when users search Google for something in their local area – one out of every five searches we see worldwide is location-oriented – they can now see a clickable button with an interactive map of the business’ location below the ad text. If they’re searching for a product, they may see a photo of that product with prices supplied by advertisers, eschewing the usual three lines of text. For films in the US, searchers can see video trailers right in the ad. These kinds of experiences are on their way overseas for Indian advertisers and users too.

The smartphone push
The worldwide mobile device explosion is also shifting the form and function of search ads. India alone is expected to see between threefold and fivefold growth in smartphone sales in the next half decade. Smartphones mean you now have the whole web in the palm of your hand and a GPS inside your device. That means your search results can now be that much more relevant and ads can reflect not just what you’re looking for, but how close that thing is to you. Local businesses used to be the businesses that were around your house and office. Now local businesses can be any business within walking distance of your smartphone. This is a huge opportunity for Indian businesses of all sizes.

Ultimately, the best ad isn’t the one that a user clicks, but the one that creates value for both user and advertiser. These new approaches in search advertising are improvements from that primitive 1995 banner ad, but if there’s one thing the history of online advertising has shown, it’s that the only constant is rapid change.

(Sridhar Seshadri is Head Online sales at Google India. Previously, he has served as Business Head Financial Services Google, and has also worked with ICICI Bank in multiple roles.)

 

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