Suitability for large advertisers
At this point, Google has built the quintessential network for small and medium enterprises with small budgets. However, the current bidding system is not suitable for high spenders. Imagine a large company that wants to spend $20 million a quarter online. Marketing managers at this company do not want to stand in line every day bidding for keywords.
Secondly, Google’s inability to direct where its ads are placed is problematic for large advertisers. I provide below a screenshot of ads for Nextel and T-Mobile ringtones that appears on a page with racy content. Large advertisers, generally speaking, tend to not want to be associated with such content and ensuring this is going to be important in the future.
Finally, large advertisers tend to not want to share the stage with small players. At this point, Google does not guarantee this. As a result, big players might end up sharing the stage from a small company from Podunk, USA.
Grade: B-
AdSense performance
The click is a high-stake moment in the online advertising world right now. It is the moment when money gets transferred from the advertiser to the publisher. While Google provides both advertisers and publishers with some reports, it does not release network-level information.
We need new metrics to evaluate AdSense. At a minimum, it would be useful to have network-level clickthrough rate patterns and trends, network-level targeting efficiency data and network-level ad effectiveness data.
Grade: Incomplete
I believe Google has been able to create a business model and a marketplace by providing very little to the participants. We do not know a lot about the marketplace and at a minimum, the advertisers and publishers should demand that Google release more research on a regular basis. After this analysis, I believe that Google is vulnerable and there is probably a new business waiting to start up that will do much better.
Overall grade: B-
Sandeep Krishnamurthy is associate professor of e-commerce and marketing at University of Washington, Bothell. He blogs on search engine marketing, internet advertising and related topics. Read full bio.