Is Google Vulnerable in Advertising?

Steve Rubel just twittered an article from today's International Herald Tribune entitled "Google shows vulnerability in Advertising." It's almost a completely ridiculous article, but for the small weaknesses that Google does have in its ad platform. Of course, because the Time Magazine, Digg and Facebook havedecided to go with other ad partners other than Google, it isn't necessarily spelling the beginning of the end for the giant.

In June, Vivek Shah of Time magazine awarded a three-year, $100 million contract to Quigo Technologies, a venture capital-backed New York company that will handle ad space on more than 15 sites, including CNNMoney.com and People.com after spending six months assessing whether Google, Yahoo or Microsoft could most effectively attract advertisers to the publisher's Web sites.

The article in the IHT focuses on an alleged weakness that the Google AdSense system supposedly possesses - the inability to target your ad towards a single site. Granted, the system is set up on a bidding system, but there is the capability built in to not only put text advertisements on a preferred site (albeit at a CPD, elevated rate), but also video ads, one of the hot new areas of advertisement that is supposedly (at least according to IHT) being ignored by Google.

What is the big problem with Google then? Why are big sites like Digg and Facebook going with Microsoft right now? Essentially, it comes down to two things, in my analysis: targeting and subsidy.

I doubt that in any of their cases, Google is offering publishers big lucrative deals to switch the entire site's ad platform to Google. Microsoft clearly is, in a way that most likely doesn't make sense for Microsoft long term. This can be interpreted as a strength or a weakness for Google, depending on perspective and preferred business strategy.

The other thing: targeting. I know from my own personal experience that while Google's targeted ads on search are generally spot on, the targeted ads for content are usually so far off the mark (although in recent months they've gotten better), that I ended up removing Google AdSense from my site completely. My entire ad inventory for the site is now handled by the ad agency Project Wonderful. So far, they've pleased me far more than Google. When traffic spikes occur, of course, my income doesn't similarly spike, but they're good for a predictable and reliable income stream above what AdSense was able to provide for my level of traffic at the blog.

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