Our approach to maximizing advertising revenue for online publishers

All website owners need to pay for the costs of creating content and making it available online. Whether delivering entertainment, products, news, services, social networking or opinions, they need to pay their way by selling advertising or charging their users.

Website owners, or "online publishers," span the range from individual bloggers to multinational companies. If they sell advertising, they can do this directly themselves, via their own sales force. Alternatively, they can use an ad network to place ads on the pages of their website. Many publishers use a combination of these methods if they can't sell all their ad space themselves (for example, a publisher may have an unpredicted surge in traffic — and therefore ad space — resulting from a popular post, or from a major website linking to them).

We have a long history of helping online publishers make money from their websites. We wanted to update you on our continuing work in this area, and how Google’s newer products can provide real and significant results for clients.

We currently have three main products that work together to help online publishers of all sizes and types maximize their revenue.

AdSense
AdSense, launched in 2003, places highly relevant ads on our partners' websites, who share in the ad revenue. In 2009, our AdSense partners, comprising over a million large and small publishers, earned over $5.2 billion through AdSense.

AdSense is designed to help online publishers get the most revenue possible for their ad space, without having to directly manage advertiser relationships. When a publisher enables AdSense on their site, Google automatically maximizes the publisher's revenues every time a page loads. It does this in real time, by selecting the most valuable ad from AdWords advertisers and a large pool of other competing ad networks and buyers.

Ad serving
Larger publishers with their own ad sales teams use our ad serving products (like DoubleClick's DFP or Google Ad Manager) to serve the most valuable ad that they've sold directly to advertisers or ad agencies. DFP is the industry's leading ad serving platform that powers the advertising businesses of the largest online publishers, while Google Ad Manager is designed to meet the needs of growing online publishers.

Our ad serving products are a key focus for us and we're continuing to make significant investments in this area. You can read about some of our DFP customers here and some of our Google Ad Manager customers here.

DoubleClick Ad Exchange
DoubleClick Ad Exchange is a real-time auction marketplace for display ad space — it includes ad networks on one side, and major online publishers on the other. Publishers are in complete control of which networks they allow to bid, what ads can appear on their sites and which ad space they make available.

Maximizing revenue across various ad networks is sometimes called "yield management." For major online publishers, the Ad Exchange offers an easy-to-use yield management solution — it selects the highest paying ad from across multiple, competing ad networks, in real time. However, the Ad Exchange goes further than simple "yield management" to provide a more complete revenue maximization solution.

Through a unique process called "dynamic allocation," it also compares — again, in real time — the value of the highest-paying ad in the Ad Exchange with any ads that the publisher has entered into their ad server (such as ad network deals) and chooses the highest paying one. By definition, the Ad Exchange only serves ads when it can offer a higher price for ad space. In fact, analysis shows that the average price a publisher receives for ad space sold through the Ad Exchange is over 130% higher than the average price of ad space sold directly to ad networks and other third parties. (Of course, while similar, the ad space being compared is not identical.)

A continuing effort
Today's online publishers, large and small, operate in a complicated and fragmented advertising environment. We're focused on developing a full suite of technology products — such as AdSense, ad serving products and DoubleClick Ad Exchange — that can maximize all publishers' advertising revenues. We're also working to bring new advertisers to online advertising and make the process easier for them, to grow the advertising pie for everyone.

By doing this, we hope to help all publishers fund their websites, which enables them to create a wide variety of online content for all Internet users.

If you're interested in the ins-and-outs of our approach to maximizing revenue for publishers, you can read more in this document.

Posted by Neal Mohan, Vice President of Product Management