A New Advertising Engine

Unlike Yahoo, AOL or other Web sites that attract a big audience, Google doesn't sell ads on its home page, Google.com. Instead, it partners with thousands of other Web sites and places ads on them. Most of the ads today are small text items, titled "Ads by Google," but increasingly Google is helping companies place banner and video ads on these same partner sites.

By applying technology to measure their impact, Google plans to differentiate its banner and video ads from those of its competitors. Teaming with online research firm ComScore Networks Inc., Google is trying to correlate the effectiveness of each ad by tracking the number of people exposed to it who later perform searches about the product.

For example, people who visited the AutoTrader.com site this summer were shown an image of a Volvo sport-utility vehicle advertising the car for lease at $389 a month. ComScore placed "cookies," or tracing files, on the computers of visitors and tracked how many typed the word "Volvo" or "Volvo SUV" into a search box weeks or months later. During the Web campaign for the Volvo's XC90, Google said 39 percent of Internet users who were exposed to the ads later conducted online searches for Volvo cars.

While the online campaign was running, Google also measured a 183 percent increase in visits to the Volvo Car Corp. site, Volvocars.com, and a 164 percent increase in the number of people who clicked more deeply into Volvo's site, indicating greater interest.

Google did not try to correlate viewership of the online ads with car sales data. Nor could it say how much impact a TV campaign Volvo also was running might have had on Internet searches or site visits.

Anna Papadopoulos, interactive media director of Volvo's campaign with ad agency Euro RSCG 4D, said Google's data provided Volvo with confidence and made clear that Google wanted to be accountable for the results. "At the very least, we were able to know that the Google campaign was attributed to" those numbers, she said. Papadopoulos said Volvo also advertises with other major Internet networks, including Yahoo, Microsoft Corp.'s MSN and AOL, and that each has its strengths. Yahoo and MSN, for example, use technology that can show ads to potential customers who have indicated an interest in products based on past browsing. While Google doesn't offer that capability, Papadopoulos likes Google's hands-on customer service. She said she also was impressed with how Google matched the demographics of likely Volvo buyers with visitor demographics at dozens of small sites.

Google, which announced this month that it was buying online video site YouTube for $1.65 billion in stock, has big plans to expand into video advertising. The firm hasn't announced exactly what it plans to do with YouTube, but both properties are pushing a new kind of Internet advertising called "click to play." The ads are essentially online video commercials that don't play unless a visitor clicks on the image.

Google said it opposes "pre-roll" Web ads, which resemble TV commercials by interrupting site visitors and forcing them to watch a video before they can see the content they are seeking. With Google's click-to-play ad service, advertisers will be able to select specific Web sites where they want their video ad displayed or allow Google to select the sites, based on whether the audience of a Web site or its content matches that of the advertiser.

Google thinks the ads will do well with movie studios, which could use trailers as click-to-play ads, and with carmakers, who can use video to draw Internet users shopping for a car. But the format remains new and largely untested.

As one of the most-searched automakers on the Web, Volvo agreed to use Google's new video format to apply its recent "Who Would You Give a Volvo To?" TV ads to the Web. And it is thinking about using the format for its new car next year.

"As a small brand, we do have to take risks," said Volvo's Gangeri. "But at the same time, if you want to reach a target like [our new vehicle], you can't do that in the safe, secure world of Volvo as we know it."