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Tuesday, March 25, 2008

Can Google Fix Its MySpace Problem With Demographic Targeting?

google-adwords.pngAfter years of telling advertisers that the way they place ads is totally wrong, Google is finally coming around to accommodate Madison Avenue on its own terms. By perfecting paid-search and contextual ads, Google has done a lot to reinvent advertising. But old habits die hard, and advertisers still like to target ads based on good old demographics. Google will be doing a lot more of that now that it owns DoubelClick. But it is also starting to incorporate demographic targeting into AdWords itself (in a very limited fashion).

As of last Friday, advertisers could target their ads by age or gender on 31 participating sites in Google’s ad network that provide such information. The most noteworthy ones are MySpace, Friendster, and YouTube. The rest, with a few exceptions, aren’t exactly the type of sites that big advertisers clamor for, so this isn’t going to have a big immediate impact. (Here is a list of the participating sites). AdWords already lets advertisers target demographically by site, taking generalized demographic data for entire sites from comScore. But this is different because it allows targeting by individual user.

You’ve got to wonder if this is how Google hopes to fix its MySpace problem Google watchers will recall that when the company missed its fourth quarter earnings, it partly blamed the poor performance of its ads on social networks (read: MySpace). By offering demographic targeting on MySpace and other social sites, perhaps Google is hoping to turn that around. It certainly needs to do something to make all of that social-network ad inventory pay off.

Marrying demographic targeting with keyword targeting should yield better results in theory. The issue, though, might not be the targeting. It might be the people. Or rather, it might be that the people you find on social networks are just better at tuning out ads. Perhaps they are less receptive to traditional advertising in what they consider to be a semi-private space. So it may not be so much the targeting as the ad units themselves that need fixing. They need to seem less like blaring come-ons and more like social invitations. And there is not much Google can do about that.

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