Analysts - Google Just a Media Company But New Ads Helping

Google took a big hit on Wall Street this week as analysts effectively gave Google a downgrade from being a tech company to a media company.  The change in categorization resulted a drop in valuation estimates by many analysts. 

Stock analysts are looking at the financial performance of Google that gets the majority of its revenue from AdSense advertising, the little boxes you often see tucked away on many sites including this one.  This advertising works in several ways:

  • Google gets paid by advertisers when people click on the links for an ad
  • Google sometimes gets paid on the ads for every 1,000 people that view the ad
  • Starting last Fall Google also offered a new type of ad, Gadget Ads, that feature advertisers like Office Depot or Ebay and specific products with information. 

While Google's ads were down by 7% for the month of January the latest ad type, seems to be picking up steam for Google even though publishers do not have the ability to measure the success or failure of this ad type as Google is not yet breaking out the specifics of these ads in their metrics.

The new ads add a new level of depth to Google's advertising offerings and could increase the quality and effectiveness of Google advertising moving them away from some irrelevant types of advertising such that if you go to a DIY site looking at Kitchen remodelling, you get served up with an add to buy Kohler sinks along with product information and store details as opposed to a 2 line text teaser trying to offer you a free estimate through a lead generation landing page.

Below is a Quick graphic that highlights some of the details of the Google Gadget Ad program from the perspective of publishers (it may text a couple seconds to load into the frame)

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