People have started noticing banner ads on Google's search results page for certain search queries. This is unconventional for Google, so why are they testing these banner ads out? Right now, they have a few advertising partners for which these banner ads are displaying, and they're only showing up in a very small percentage of searches, so it's not clear how they're going to impact internet marketing, but it does make more clear where Google is heading. Watch today's Daily Brown Bag to learn about Google's new banner ads, what they are saying about where Google is spending their attention, and if they really are a big deal.


Hello, and welcome to the Daily Brown Bag. Today we’re going to be talking about some recent news from Google that they’re now going to be selectively allowing some banner ads in search results, which is something we thought would never happen. I’m Chad Hill and I’m joined by Adam Stetzer.

Yeah, good morning, Chad. Welcome to the Brown Bag. We’re exploring this change from Google and trying to understand what’s going on. Here’s a little bit of the backdrop. We’ve been reporting on Google revenue and numbers, and while they’re still a dominant player in internet advertising, their cost per click has been decreasing now eight straight quarters in a row. So, while they’re seeing nice growth as a company and they enjoy dominance with their brand and near monopoly with some of the ad revenue on the internet, they do see some signs, and I’m sure their shareholders are really pushing them, for new and exciting ways to increase revenue.

We’ve seen mobile creeping into their strategy as more and more ads are being shown on mobile, but as Chad and I have discussed in previous Brown Bags, the cost per click is a whole lot lower on mobile, the conversion is a whole lot lower, there are a lot more impressions without conversions. So, I think Google is experimenting with new ways to try to push more ads out there. So, let’s talk about what’s happening today.

For the first time, they’re actually testing banner ads that would show on, so that’s a brand new thing. It’s being done in a very limited way, though. They would only do this for branded search results, and they’re really starting small. They’ve got a very small group of about 30 advertisers. These includes brands such as Virgin America, Nike, and Crate & Barrel, and they’re saying they’re only showing up for about 5% of the searches. So, in typical fashion, Chad, they’re dipping their toe into what might be a new avenue for them in terms of advertising. There’s a different medium to show it-- it’s on, but it’s something they did say would never happen. So, is there controversy here? What do people need to know?

As you said, Adam, this is starting small. This is a very select group of people, and some of the brands were things like Virgin America, Crate & Barrel. The idea is that when you search for one of those on the Google Search Results page, the SERP, there would be a banner ad that shows on that page. So, a lot of this is that you’ve already expressed intent and interest in that brand, so Google probably says, “Hey, we’re not going too far off the ranch here by having a nice banner ad that allows that advertiser to have a little bit more control over what that person’s seeing in the search results.”

For one thing, from back when people used to buy out the AOL welcome page and the Yahoo! home page. These placements are huge money-makers for these advertising companies like Yahoo! and AOL in the day and Google now. So, if Google is looking for ways to grow revenue, this is one thing. But, one thing that’s interesting here, Adam, is that everything Google does always starts with a measured test. So, yes it’s currently limited to big brands and only on their branded search queries, but it’s interesting because this might be the beginnings of other things.

That was one of the points we wanted to make here, was that if you go back five years and you look at what a Google search results page looked like then and you compare it to now, it’s a radically different place. We’ve got, in the current search results, product listing ads, integration with Google Plus, there’s images that are showing up. So, they’re more and more making that page surface content that’s compelling and interesting and that doesn’t require someone to click on the blue links to leave Google. They actually want you to spend a little bit more time on Google, and I think they’ll continue to move that needle in terms of more time on each page. That’s where this is going to go. So again, it’s a big deal, but today it’s not a big deal. I think they’re conditioning us to start expecting these changes over time.

Right, so several important points here. One is that they test a lot of ideas that don’t actually make it out to the big time, so this might be a flash in the pan that gets backed out. But, I actually don’t think so. I think this is, to your point, Chad, kind of the evolution we’ve been seeing. So, what does this mean for small business players and the internet marketers we work with? For the resellers and distributors and small businesses it may actually be positive, because now you actually can get a little more brand control on when people actually search for your name, which is most likely the number one place people are looking for you. So, that might be a positive.

I think the last point, as you outlined in the evolution of the changes with their search output, to me this is inevitable, and I like seeing these changes, because the consumer’s perception that Google is a free product built for them with a motto of “do no evil” I think is really wrong. They are a for-profit company. They are an advertising company, and the more that these things come along, it helps consumers see them for what they are, which is not bad. It just is. But, it helps correct the perception of what they used to think of them, which was the verb meaning “to search for free,” which really isn’t what they are. So, I think it’s inevitable, probably a little positive for the small business market, and maybe it helps the world kind of see that these guys are an advertising company and that’s what they need to do.

We’d be interested in your perception. Did they violate something they said they would never do by putting branded banners on Do you see this as a positive or negative? We’d like to know if your small business customers would find this a good enhancement to their advertising program. We’re here every day doing the Brown Bag. We hope you’ll subscribe to our YouTube channel, and we’ll see you tomorrow!