Paid Search

Google, in their never ending mission to expand their sphere of influence and develop new revenue streams, has launched an innovative new spin on video content embedding they’re calling Video Units.

The new program takes the limitless content from YouTube and offers it to AdSense publishers, who can embed it in their site with a lean code snippet. The content of the videos can be hand-picked by the publisher, chosen from a variety of categories, or determined by Google with its complicated relevancy algorithms. The videos display in a very customizable players and feature contextual ads at the top of the video and as text overlays in the video content (similar to the contentious ad overlays YouTube added to their website a few months ago). Not only do publishers get free, easily customizable video content for their site, but they get a cut of the ad revenue, which is also split between Google and the video’s creator.

The program is an absolutely brilliant move by Google, as it has the potential of expanding the YouTube brand massively, as well pushes forward embedded video content on sites internet-wide and will be a great testing ground for how these kinds of ads are accepted by users. And while I’m sure the content providers are carefully screened at this point for quality control (as well they should be!), it may end up becoming a great method for independent filmmakers to get additional revenue for their work.

Things have been hot for online advertising companies. Google bought DoubleClick for $3.1 billion, followed by Yahoo’s $650 million purchase of Right Media. Now Microsoft jumps to prove they’re not out of the online advertising game with a whopping $6 billion purchase of aQuantive in a move to expand their breadth of paid opportunities on web sites, Internet television, video on demand, and other places online.

While Google, Yahoo and MSN all run their own competing search engines with paid opportunities on these engines, the acquisition of these networks shows their vision of a future dominated by new forms of advertising. While paid search is now paid on a per-click basis, the ability to leverage banner ads and ads within rich media offers advertisers the ability to say a whole lot more to their desired audience. To be seen is how much search engines use data about user searches to correspond ads to likely targets — the ability to hone in on target markets is extremely alluring to advertisers, and feared by privacy advocates (Google, at least, says they do not intend to use their search data to improve ad targeting).

Whether the aQuantive purchase will solidify a rather rocky position for Microsoft’s online advertising portals waits to be seen, but the commitment of the Redmond giant to not be outpaced in the industry is clear. And with billions of advertising dollars on the tables, the stakes have never been higher.

Well, it’s no news that Yahoo, among others, is fighting for its life against the megalithic efforts of Google. The ink just dried on Google’s $3 billion buy of the Doubleclick ad network and they’ve officially announced a Powerpoint-clone program to join their already beefy hosted office software suite. They’re being innovative and aggressive enough that Microsoft has accused Google of becoming a monopoly. Which is not necessarily incorrect, just funny.

In a desperate fight for life, Yahoo has taken several aggressive initiatives of their own — notably, the so-far-successful new Panama ad-platform — and most recently, a push to extend their ad network into a variety of newspapers’ web sites and now a partnership with PayPal to add branded buttons to their sponsored search listings.

The water’s definitely starting to get hot, due in no small part to projections that spending on paid search is projected to increase by 17% this year. With more traditional advertisers catching on to the power (and impressive ROI) of paid search, the market is growing at an incredible rate and everyone wants part of Google’s enormous pie. Whether or not Google is becoming a monopoly, they are very steering the way of the web and have the technology, innovative people, and singular vision to do it. And for the moment, it’s forcing everyone else to try some interesting tricks to catch up.

First take a look at Jason’s post to get the scoop on “Cost Per Action” advertising, the paid advertising model that is causing ripples in the search industry (thanks, Google), then check out this site, where they have screen shots of a beta version of the product. Of course, it doesn’t do much more than tease us with what the possibilities of the new software will be, but it certainly stands to increase the data we use to measure success, puts more tools in the hands of advertisers, and probably will serve to increase Google’s pocket book.