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Google Launches Demographically Targeted Ads
Wed, 2008-01-23 22:50 — ChrisKennedy
Just got this email from Google's Inside-AdWords list:
Ever wish you could show your ads more often to a specific group like women aged 25-34? Want to see how your ads perform with certain demographic groups and then adjust your bids accordingly?
We're excited to introduce the new demographic bidding feature from AdWords. Demographic bidding helps you display your ads to specific gender and age group audiences on some sites in the Google content network, giving you more control over who your audience is and greater insight into how your ads perform with certain demographic groups.
Click here to sign up for the beta program. Note: the signup button seems to link to an internal hostname ("http://cfernando:8222/...") - not sure what the deal is here.
As someone who researches online advertising for youth voter registration... this could be amazing! The targeting data come from social networking sites, or other websites that collect demographic information from their users.
On the one hand this could be formidable competition for a Facebook-driven demographic advertising platform that was rumored to be in development, but on the other hand, it seems likely that Google sends a percentage of revenue from demographically-targeted ads to the site that provided the demographic data. If this is the case, Facebook could leverage its huge userbase for significant revenue potential. I suspected such a system was in the works back in mid-2007 when Facebook changed its login system to keep users permanently logged in, even across multiple sessions.
I will be interested to find out whether Facebook chooses to participate rather than reinvent Google's excellent AdWords system, or if Google is harnessing its OpenSocial API to compete on monetizing demographic data from social networks.
Personally I think it would be best for Facebook to participate in the Google demographic targeting auction. Then again, I'm no business strategist... it could make more long-term sense for Facebook to opt-out until it can launch its own external advertising system with demographic and profile targeting.
Thoughts?
Update: I looked at the list of participating sites and it includes: MySpace, Friendster, HotOrNot, and BlackPlanet, among others. So, apparently Facebook does intend to compete. Nevertheless, MySpace's large userbase and marketshare of social networking visits will be valuable, as will the demographic targeting offered by niche sites such as BlackPlanet. Time to figure out how to best test this for youth voter registration.
Comments
If you're targeting the
If you're targeting the young adult demographic I'd suspect advertising directly on Facebook/Myspace etc would be more effective than the "Google content network". Young people spend more time and rack up a lot more page views on social networking sites than, for example, about.com or newyorktimes.com.
It depends. Yes, young
It depends. Yes, young people spend quite a lot of time on Facebook, but that doesn't mean they are likely to click an ad on it (particularly with Facebook's tough message restrictions on advertising). If you want to pay per click it doesn't matter how many ad impressions a site can deliver - it's the clicks that you want, at the cheapest price possible. And at the end of the day clicks are normally only a proxy for other conversions - registrations in my case, but it could also be paid subscriptions, purchased items, newsletter sign ups, etc.
It's quite plausible that Facebook users are more likely to click ads on non-Facebook sites where they are less task-focused, and that if advertisers can use social networks' demographic data to target ads on external sites like nytimes.com it could be an effective advertising model. But in an efficient advertising market the CPAs on all sites will converge to an equilibrium for any given advertiser.
The whole innovation behind this system is that if you bid rationally for your target demographic via AdWords, the system can automatically run your ads on sites where your target demographic is most likely to view and click them. So advertisers won't even need to know if their demographic targets are more likely to visit x.com or y.com and bid appropriately... they can just bid based on their desired CPC or CPA and have Google optimize ad placement.
In Facebook's case it would theoretically get paid whenever its demographic targeting data is used OR when an ad is run on its site in order to market to its userbase. Win-win.
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