0 GOOG US38259P5089 I/ADV I/ISV I/MED I/XDJGI I/XGDW I/XGTI I/XISL I/XNQ1 I/XRUS I/XSP1 I/XSP5 I/XSTX N/DJEN N/DJIN N/DJN N/DJRT N/ANL N/BNEU N/CAC N/CNW N/DJPN N/DJS N/DJSS N/DJWI N/ERP N/FCTV N/MRK N/NET N/SNEW N/STK N/TNW N/TSY N/WEI M/CYC M/NND M/TEC P/NIB P/NIP P/WMAI P/WMMI R/CA R/NME R/PRM R/US R/USW New Google Ad Formats Seen Driving Revenue
 
   By Scott Morrison 
   Of DOW JONES NEWSWIRES 
 

SAN FRANCISCO (Dow Jones)--New ad formats introduced by Google Inc. (GOOG) will likely spur revenue at the search leader by bolstering consumer response rates even though many advertisers will struggle to figure out how use the features effectively.

Over the past few weeks, the Mountain View, Calif., company has quietly introduced a series of product-listing and comparison-shopping ads. The Internet giant is also stepping up the number of ads accompanied by images, video and maps on its search results page. Google hopes these new ads will improve its users' experiences and generate more revenue per search.

Search industry executives said the changes made sense but cautioned the new formats, some of which are still being tested by Google, will take time to catch on with the bulk of advertisers. Many of those are small and midsize businesses that lack the resources to keep up with changes in search advertising.

"There is not a lot of clamor out there for these new ads," said Max Kalehoff, vice president at search advertising group Clickable Inc. "Advertisers are sticking with the tried-and-tested: text ads."

Google's new formats come as it seeks to diversify its revenue, the vast majority of which comes from text-based search ads. Efforts to develop other revenue sources, such as selling software services accessed online, have yet to become significant businesses.

Still, text-based ads have performed relatively well in the downturn and Google's stock has jumped more than 89% so far this year, closing Monday up 0.6% at $583.

The new formats include comparison ads that list multiple offers and prices on a single page. Also new are ad site links, which let advertisers add up to four links to standard text ads, making it easier for consumers to find specific pages and content on a marketer's Web site.

Other new formats include so-called product extensions, which let advertisers show off specific products complete with images and prices that are relevant to a consumers' search query. Google also introduced product listings: standalone ads that aren't linked to text ads and which advertisers pay for only when a user clicks on them and completes a purchase.

"As an advertiser, I'd love all these formats because it makes it more likely people will click on my ad," said David Szetela, chief executive of search engine marketing firm Clix Marketing.

Still, some industry executives caution the new formats will require advertisers to do a fair amount of work to optimize their ads.

"Less sophisticated advertisers won't fully understand the features and know how to pull the levers they need to take advantage of the new formats," said Szetela.

Justin Merickel, vice president at search engine marketer Efficient Frontier Inc., also wondered whether ads with images, video, maps and links might overwhelm consumers accustomed to Google's clean results pages.

"Is there suddenly too much? Does the consumer start to get turned off by too much clutter on the page?" he asked.

 

-By Scott Morrison, Dow Jones Newswires; 415-765-6118; scott.morrison@dowjones.com

 

(END) Dow Jones Newswires

12-01-09 0750ET