Google Leading The Way In Advertising, Microsoft Playing Catch Up?

Google is the most popular search engine on the internet today. It's simple functional design is a pleasing and comforting introduction to the internet, from where many millions of people are conducting their search queries this very second. Google has grown enormously since its conception, and eventual launch in the late nineties.

It seems that Google's domination of the internet search engine market has fueled a fearsome drive, one that periodically introduces new services and ways for us to use the internet, undeterred by the prospect of going head to head against such giants as Microsoft. Due to their massive reach and the trust they have instilled amongst internet users, its unsurprising that their services have gained such following and credibility. Such services inculde Google Mail, a free email service with generous disk space, in direct competition with MSN's Hotmail, or Google Local and Google Earth, invaluable geographical resources that appeal to children, conspiracy theorists or scientists alike; Google Answers - have specialists answer your questions; Google Video, Google Scholar, Google Maps, Google Video.. The list goes on, find out their latest experiments at Google Labs, http://labs.google.com/ - and see for yourself what innovations they have lined up for us next.

And eventually we get to the point. In the past few years, we have heard of Google reporting record revenues, sevenfold increases in revenue which they attribute to the success of its contextual advertising system, Adsense, and the continuing growth of online advertising.

Advertising a product on the internet is cheap and economic. Google's approach to advertising adopted its clean, efficient approach to online solutions, and proved immensely successful. Utilising their search engine algorithms they serve adverts contextually, where adverts are based upon the content of a webpage. This system not only automates the process of finding the right people to display your advert, but also increases the clickthrough rate, or the number of clicks generated by the adverts.

Therefore the success of the program has not been a big secret; many case studies into how we perceive the internet recognise that we have adopted such traits as "banner blindness", where traditional garish advertising schemes prove ineffective. Pop-ups naturally deter visitors, and flashing banners are ignored. Google's simple text based adverts prove to be a valuable resource, rather than a detraction from ones online experience, and it still remains a mystery to me why Microsoft have been so slow to react, and take its share of the contextual advertising market.

Two years late, Microsoft eventually took on Google at their own game, launching adCenter. Yes that is the same prefix, have they no shame? Microsoft were the last of the big three (Google, Yahoo!, Microsoft) to develop its own advertisment delivery system, previously adopting Yahoo!'s adverts on their networks, taking a cut of the profits. In early 2006, microsoft's contract with Yahoo! expired and subsequently only their adverts were displayed. Microsoft's networks reach nearly two out of every three online users today, creating great potential adCenter. Microsoft refuse to be behind the game, introducing new features allowing advertisers to target their adverts based on demographics, and even to increase their bids to target users of a certain demographic more aggressively. AdCenter also allows advertisers to run their ads on specific days of the week, and even on certain times of day, a feature Google Adsense only adopted recently.

Should Google be worried? Advertising is big business, and its growth on the internet is relentless. There's room enough even for the three giants to jostle, but it will be interesting to see which direction advertising takes next.

The new Buzzword in town is "Behavioural Advertising", a system that targets adverts based on an users surfing habits, rather than the content of the website they are surfing. Recent studies have shown that behavioural advertising generates lower click through rates, and higher conversion rates - where a click converts into a sale of a product or service. This means that an advertiser needs less clicks on his advert, to generate a greater number of sales!

There are a few problems associated with behavioural targeting however, most notably our right to privacy. No one wants their surfing habits recorded and analyzed, and how will the advertisements distinguish between different users on the same computer? Google have had a few disputes with privacy advocates, most notably over their Gmail service that scans emails to serve content related advertisements. Will our goodwill and trust in Google, Microsoft or Yahoo! allow for behavioural advertising? It will be interesting to see who eventually takes on the idea, and the inevitable ensuing retaliation by the privacy advocates.

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