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Google Presentation


Derek Speranza

on 23 April 2010

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Transcript of Google Presentation

H How Google Has
Changed Advertising A Tale of Organization, Environments, and Organizational Environments

By Derek Speranza, Kirsten Johansson, Betsy Klein, and Jae Bae Advertising: A History Advertising as we know it has been possible since the printing press

There was no real need for it until mass production made the differentiation of products necessary

The concept of branding created a need for companies to develop images and attitude around their products

Advertising filled this need
In the later 1800s, the first advertising agencies emerged

Volney B. Palmer (1850) and J. Walter Thompson (1877) were among the first agencies

Gave rise to the Firm - Agency - Media
business model

Technological Innovations In the early 1900s, the radio marked the first time advertisements could be heard

Now advertisers had to come up with jingles, songs, and slogans

Radio was the first step towards market segmentation In the 1940s, advertisements featured movement and pictures and sound all together

Brands became more complex, now able to incorporate celebrities, music, and complex visual scenarios

Market segmentation became even more developed The Internet Google changed the business model

No longer Firm - Agency - Medium

People can communicate on large scale

Viral videos, blogs, paid search How The Google Program Works Pay-per-click advertisements Advertisers choose the words that trigger their ads and how much they will pay to Google per click

Buying keywords
What determines the price of these ads? - A Keyword's Quality Score

Click through rates

Relevance of the ad text/keywords

An advertiser's account history

Other relevant factors

- This quality score is used to determine the minimum bidding price of keywords for an advertiser

- Advertisers’ bids (how much pay-per-click they are will to submit)

What determines the ordering of these Ads? Generalized second-price auction
Almost half of Google’s AdWords revenue comes from 1% of total advertisers who spend 1 million or more
Whereas the Adwords program allows advertisers to advertise by paying Google, the AdSense program eventually makes Google pay the program enrollers who are hosting Google ads

It’s like providing Google with an ad space so that Google can sell what goes inside that space

So in a way, Google is acting like a mediator, creating a software that caters to advertisers

AdWords=revenue stream

AdSense= cost stream

Adsense for Feeds
for Search
Publisher is paid only if advertisements after the searches are clicked AdSense for Mobile
AdSense for Domains
The Differences In Google's Advertising Benefits the customer
Google’s ads are only text and no logo or images

With AdRank it filters through ads and only displays ads, which have the highest frequency of users clicking on it.

Google believed that “users see the most relevant ads first.”

Customers can turn off ads embedded in websites- Youtube.
Benefits the Advertisers
Pay-Per-Click system, advertisers only pay for their ad when someone has clicked on it. Improvement compared to Cost-per-Display.

They can provide important data of who is looking at their ad. Ex AdInsight on Youtube.

Anyone can advertise with Google due to the low cost. The bidding starts at a minimum price of 1 cent and the sign-up fee of $5, so this is accessible to any company. Local advertisers can get global access.

Google can provide the media space and tools to measure effective their ads are. They provide a solution to Return-on-Investment.
Changes in Advertising Google can essentially “cut out the middle man” of advertising agencies by providing media space directly to the companies.

Companies are forced to buy keywords in order to protect their trademark. With Google anyone can buy a keywords as long as they are the highest bidder. Ex Louis Vuitton court case against Google.

Google has become a leader in internet advertising which other companies follow- Microsoft, Yahoo, Apple. They created the trend of technology companies adapting advertising as a source of profit.
Competing Arguments Rise in creativity and integrated advertising

Global awareness

Increase in competition between brands
Getting Creative The TiVo Question: Why watch commercials when you can pause and fast-forward? …Because you could miss this:
Then: Obvious uses of product placement
Now: product placement discretely integrated into the story line of a television show or movie
Getting Creative TiVo Pause Ads
Global Branding Sprite ad

Coke ads- Mexico: http://muse.jhu.edu/journals/advertising_and_society_review/v009/media/9.4.o-barr_video03.mp4 and Japan: http://muse.jhu.edu/journals/advertising_and_society_review/v009/media/9.4.o-barr_video04.mp4

Michael J. Fox Pepsi ad http://www.youtube.com/watch?v=BFEQ7aH7JDQ in US versus China

Transition from direct translations to locally incorporated to reflect the culture
Rise of Competition: Ad Wars Rise of Competition: Ad Wars Competing Arguments These factors have all contributed to changes within the advertising industry, but information technology has played the most overarching role
Strengthens the reach of global brands
Provides a medium for competition outside of just television, billboards, newspaper, and radio
Integrates product placement within the Internet
Information technology restructured the industry and cemented ongoing changes to the advertising world.
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