Google, Fox Interactive, MTV and XM Radio

Every time someone searches for "mesothelioma", a form of asbestos cancer, Google Inc. receives $50 from law firms and other advertisers.

This is the highest "key word" auction price paid by advertisers to Google and it guarantees that their ads appear beside any "mesothelioma" search results.

Google's system of matching "key words" with content is transforming advertising. So is Google's pay-per-click advertising charges.

But Google announced three high-profile deals with media companies recently with Fox Interactive, MTV and XM Radio that notes a new advertising thrust.

"We are a real partner to the world's largest publishers [content providers] as well as ad agencies and advertisers," said Patrick Keane in a recent telephone interview with the Sun. He is head of Google's Advertising Sales Strategy.

The media companies have agreed to let Google provide search technology for their websites and to sell advertising on their sites in return for a share in the proceeds.

Google's partnerships with media companies and other content-providers allows it to place advertisements "inside" sites, not merely beside search results.

"You could be reading an article in the New York Times on Tiger Woods' recent victory and you might actually see Google ads around that article. We match our ads to the content on that page. We have many partners, About.com, AOL, the Times and now Fox, MySpace, MTV and XM," said Mr. Keane.

These partnerships also help Google do "site targeting" for its advertisers.

For example, a Hollywood studio promoting "An Inconvenient Truth" will provide Google with audience research such as their interest in energy, conservation, environmental, eco-tourism.

"We will help them identify a network of sites across the web to reach that psychographic audience to promote that movie," he said.

This move by Google into media partnerships is designed to expand its advertising revenues beyond search results which comprise only 10% of web usage, he said.

"Ninety percent of web use is reading and buying," he said.

Despite win-win partnerships, some content providers and ad agencies worry that Google will eventually enter their turf. Ad tycoon, Sir Martin Sorrell of WPP Group in Britain, has posed the question "is Google friend or foe?"

"We are a friend. We are a great mechanism for advertisers and their agencies by providing accountability, scale, relevancy, a great user experience," he said.

"We also work with small advertisers as well. Google means that the smallest advertiser has the ability to compete with the greatest. We have democratized advertising."

Google has also expanded from its original simple, text ads.

"We started with just 95 characters of text but that's broadened," said Mr. Keane. "We have click-to-play video, banner ads, but one thing we certainly have a strong aversion to is interruptive user experiences such as pop-up ads or continuing animated ads."

Google has video ads now but they must be clicked on by the users.

"With our videos, the user must initiate the experience. Interruptive advertising is not useful or relevant for a user," he said.

Google's mission is to provide search for free and make money by providing a tasteful electronic billboard aimed at pleasing, not jarring, viewers.

"Our advertising platform is much broader than the flat, two-dimensional content of print which is why we like to work with Fox, XM and others," he said. "We can bring the same relevancy to other forms of media like radio."

When asked whether Google will move into content like Yahoo, which employs journalists, he said that's not in the cards.
"We're pretty comfortable where we are. We are a great conduit for publishers [content providers] to syndicate [sell ads] through us. Our partners already have great content and we are a mechanism to tap that content," he said.

Google's advertising strategy continues to result in huge revenue jumps, but one cloud on the horizon is the issue known as "click fraud" which involves unscrupulous competitors clicking continuously on rivals' advertisements in order to run up their costs. Google recently settled a court case with an advertiser who had been over-charged due to this type of fraud and the company agreed to set aside $90 million in free advertising for future successful claimants.

"Invalid clicks is a problem in the industry," said Mr. Keane. "We want to build a system that's even more sophisticated to quickly see where some of the clicks are invalid and be able to filter those out. We have a lot of technology in place that finds that behavior before it hits our advertisers and publishers. We have the world's best engineers, scientists and mathematicians focused on this. And we will refund our advertisers and publisher partners who are victims of click fraud."