What’s Google’s (GOOG) next big growth driver? Its current business working better — better conversion, more traffic, more advertisers — Google CEO Eric Schmidt said Tuesday.
How about after that? A “set of display businesses and an exchange” that are being built from Google’s acquisition of DoubleClick, Schmidt says.
But that’s going to take some work.
The display ad business is “not uniform in any particular way,” Schmidt said at Morgan Stanley’s tech conference. “The systems are complicated. The way the display ads are managed is done in many cases by hand or by poor quality spreadsheets.”
So Google hopes to make the business a little more Googly.
“We see an opportunity to apply the Google magic and the measurement and the scaling in that business, and that’s probably the next big one,” Schmidt says.
What needs to change? Schmidt:
- “The first problem if you have a display property, it’s very difficult to figure out which ad to show. Because there are multiple vendors who show you these ads. We’re in the process of building the equivalent of an ad exchange which will allow you to do that automatically and do it with scientific measurements. So today what people do is they use heuristics, and the heuristics in that space are terrible.”
- “The second issue in display has to do with the standardization of ad formats. There’s not agreement at the level that it needs to be on the standardization of the delivery of the display, and especially around interactive and video ads. The future of display ads is not a static picture, but an ad that brings you in. That tells you a narrative.”
- “Third in our case is the construction of the business relationships with the large advertisers, which we’re still working on.”