John Kelley and Helena Beem
Google Lands in Ann Arbor
Google's products and partnerships build a powerful network of advertisers and consumers.
ANN ARBOR, Mich.—Online advertising is increasing by 30 to 40 percent a year and is quickly eclipsing more expensive and less measurable forms of advertising such as television and print.
John Kelley, MBA '93, manager of Google AdWords online sales and operations and Helena Beem, associate manager of online sales and operations, spoke about "Search Engine Advertising: What It Is and How to Use It Effectively" as part of the 2006 Yaffe Center for Persuasive Communication speaker series at the Stephen M. Ross of School of Business.
Google, which opened an Ann Arbor office in 2006, expects to staff 1,000 positions over the next five years. Google was co-founded by Larry Page, a University of Michigan alum.
Google is known for its search engine but also offers other products such as Google Maps, Google Video, Google Calendar, Gmail and Google Earth, a virtual 3D global application. "Advertising is the economic engine that drives everything at Google," Kelley said.
Google's philosophy about online advertising is that it should be measurable, accountable and optimizable; companies should only pay for what they get; the online ad campaign should be flexible; and above all, the advertising should benefit all of the advertising company's assets, all the time.
The way Google ads work gives the company an advantage over other online advertising methods. Advertisers only pay when a Web user clicks on the ad, not every time the ad is displayed.
When a search is performed, results are framed with "sponsored links" (or paid ads) at the top or on the right side of the page. Google takes the userís search terms and retrieves matching Web pages as well as any ads that match the user's search terms.
Advertisers work with Google to define and select the best keywords for their online campaigns. Advertisers also determine how much they are willing to pay for their ad to be displayed on Google. The price range runs from a few cents to $50.
Every time a user searches on Google, an auction determines which ads are most relevant based on how much the advertiser is willing to pay and the relevancy of the ad. This real-time auction is seamless to the user.
Google's ads also show up on other search sites, including Ask and AOL. Google AdSense is an additional service that allows webmasters and bloggers to use Google search technology in return for posting Google's ads on their site. AdSense now offers the ability to run online video ads as well. According to Kelley, Google and its network of partner sites reach more than 80 percent of the U.S. Internet.
Google AdWords offers several fine-tuning options to advertisers. Geo-targeting sets an ad to run only in a specific geographic location, ad scheduling sets an ad to run only during a specific time period, and site selector determines the sites to include or exclude from the ad campaign.
Google Analytics allows advertisers to "make smarter decisions for free," Beem said, by measuring ROI for marketing efforts, evaluating user navigation to identify site improvements and tracking e-commerce metrics such as revenue, cost and conversion rates.
The power of Google's advertising is not limited to big corporations. Kelley presented a case study of a client named Cosmo Buono, a "self-described technology dinosaur" who wanted to publicize a piano competition. Within 15 minutes he had an online campaign up and running. Applicants even could submit an audio clip at Buono's Web site, allowing Buono to screen the applicants.
When asked how Google advertises its products, Kelley replied that the key is word of mouth. When Google launched Gmail, a free webmail service, users were personally invited to try the service before it was available to the public. "Think about the user first," he said, "then everything else will follow."
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