Google search ads, feeling the pinch?

Josh Chandler · December 5, 2008 · Short URL:

How much can search subsidize other parts of Google, like YouTube?

 John Wanamaker, considered the father of modern advertising, once said, "Half the money I spend is wasted; the trouble is I don't know which half." 

These days, marketers can't afford to not know where their money is being spent, making search-engine marketing an ideal and preferred advertising channel. 

Yet, a look at how many sponsored ads Google is getting on each search query suggests even search advertising is seeing weakness. In November, Google had 4.38 ads per search, down from 5.02 and 5.08 ads in October and November of last year, respectively. 

On the upside, Google is expected to see a 55% in the fourth quarter, over the third quarter, according to a report released by this week. And, Google isn't holding back from plastering ads across its other properties. As Bambi Francisco, Founder and CEO of, said in a recent post: I'm going to start calling Google Stickers. She was referring to the popular Disney movie "Cars", which has a cartoon car adorned with sponsorships. In recent weeks, she said, Google has been monetizing just about just about everything, such as Google Finance, a two-year-old Google product that hadn't had any ads before.

Regardless, in my opinion, Google ads are very well placed, unobtrusive and should only complement rather then detract from the content on the page.

I do think primarily Google's focus will lie heavily on its video content platform

The video network's uniques for the month of October 2008 was reported to be 344 million.

My question is why haven't they found a way to truly monetize this audience? 

While I do sincerely believe that the company has done one better then, which forces users to watch an ad of up to 3 minutes before they can watch the program, the advertisers are still complaining about having ads next to user-generated content.

When Google's CEO Eric Schmidt was asked in April how Youtube could make money, his response suggested Google wasn't clear about the ad strategy as of yet. He said the team was still looking for innovative ways to monetize that was also a good experience to the end user. Many seem to agree that YouTube will make its money off "premium" content from its content partners, like BBC, CNN, ABC, CBS and Demand Media. (VatorNews also has a channel on YouTube.)

But it's unclear how big that's going to be, or is. To this end, despite the fact that it's a promising platform with significant revenue potential, with search advertising starting to look iffy, how long can YouTube be subsidized? 

That raises the question of where will Google aim its ad placements next, Google Talk? Heck, maybe Orkut or Knol could see some boost in ad placement.

While Google should maximize its traffic, users are definitely starting to see that the search engine is not staying true to its original plans.





It is toughdeclining advertising revenue from Google is going to continue to help subsidizing this rev-share concept.

But premium content is a very important thing for Youtube to promote to users, 

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