Posted October 12, 2010 8:27 am by with 1 comment

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According to an article from MediaPost, Google is set to start rolling out tools for display advertisers to help them automate and optimize their display ad campaigns. It’s like an AdWords approach to the display world which will likely cause a lot of excitement along with the requisite confusion as people find out when the system works and when it doesn’t.

MediaPost says

Google’s long-term plan to automate the advertising supply chain will lead the Mountain View, Calif. tech company on Tuesday to release two tools aimed at removing costs from serving up display ads across the Google Display Network.

The tools — Display Campaign Optimizer and Contextual Targeting Tool–are geared toward helping advertisers reach performance goals on the Google Display Network, simplify the entire system to buy and sell display ads, and open the entire ecosystem through innovation.

Sounds simple enough but as with all good things are limits (despite our innate desire to think that things like this will be a real silver bullet and literally solve all of our problems). The basic premise is very Google-esque in that this is a problem that was solved by engineers so the following makes sense.

Display Campaign Optimizer manages targeted bids to generate more conversions such as sales or leads by finding the correct sites that drive performance. It does this within milliseconds. The tool, based on machine learning technology, determines what works and what doesn’t in real time and adjusts accordingly.

Now for the gotchas from what sounds like the Borg for display advertising.

For campaigns with higher conversion rates the learning period is shorter, but if the company only sells one item per month it’s challenging for the system to learn, according to Brad Bender, product management director for the Google Display Network.

In other words, this system will be for the big boys which is both expected and disappointing all at once. Whenever there is a new option or technology one always holds out hope that it will be for the mass market but that is rarely ever the case so maybe a good idea would be to stop expecting it (cuts down on the disappointment for sure).

Of course Google offers up the early success story to show how efficient the tool is and make it appear as if it will be this effective for everyone

Looking across the Web to connect with consumers who care about the environment to offer discounts, Seventh Generation, which sells eco-friendly home and baby products, found that Google’s Display Campaign Optimizer delivered 60% of the coupon downloads with a cost per acquisition of 20% below their target quickly.

The product set will be rolled out over the coming months but the basic premise behind any automation is just like that which has created ever increasing automation in the manufacturing sector: cost-savings.

Administrative costs remain daunting for the overall ad industry as it continues to serve up more advertisements to reach the increase in consumers flocking online. For every dollar spent, it costs between 26 cents and 28 cents in overhead to support the delivery of an ad, according to Bender, quoting industry stats. “There are opportunities that can make the process more efficient,” he says.

For advertisers this is good news while for employees in the advertising industry maybe not so much. I suspect, though, that there will be a real need for skilled human oversight of this system because as we see with search marketing all the time, when we leave it up to the machines the ultimate winner is Google and not necessarily the advertiser. In other words, the stories of the display ad world’s equivalent of an AdWords broad match ‘service’ sucking marketing budgets dry without results are bound to happen. Who will be the first?

  • Google is a money machine. I can’t wait for the day when Microsoft wakes up and starts running their own text ad network. They currently have one but it is closed to those with websites under 1 mil uniques a month.