Will Search Engines One Day Be Overcome With Display Ads?

Last month, Google’s famously streamlined white homepage was plastered with something different: an animated banner ad.

Since Google has been credited as an ad-free (or, at least, display-ad-free) search engine, the animated banner ad for the Nexus 7 Android tablet came as a bit of a shock to both Google users and the wider industry. While this wasn’t the first time Google used its homepage to showcase products, was it a smart move by Google?

In today’s shareholder-value-centric paradigm, companies are principally run by profitability. Whenever a company says that it will never do something, that never ultimately restricts its ability to generate revenue and increase profits.

Google’s Change Of Heart

In Google’s case, its promise to put user experience above profitability was broken long ago. Good examples of Google’s change of heart include when the search engine included Google+ within search results, at the expense of other social networks, and when it decided to feature Zagat results at the expense of Yelp or other local search providers.

Search for the term [tablet] and there’s a chance Google will include a sponsored section at the top of each search page, which features its products alongside those of RIM but excludes Apple, presumably because Apple doesn’t pay to be included. As a result, when one searches on Google for [tablet,] results related to Apple’s iPad are barely visible at the very bottom of the screen. Given Apple’s huge market share in the tablet market, its products should really be showing up at the top of any search screen.

But this whole strategy isn’t entirely wrong. Despite its famous Don’t Be Evil slogan, Google is ultimately a major, publicly-traded company – albeit one that brings immense utility and pleasure to its users.

Return Of The Portal?

Like any other big company, Google is trying to make as much money as possible for its shareholders, and sometimes accomplishing this requires the application of a degree of strategy. Here, the strategy requires locking users within Google’s platform to as great a degree as possible.

Google is not alone in pursuing this strategy. Each of the big media players (Amazon, Apple, Facebook, Google and Microsoft) are doing everything within their power to keep consumers within their publisher network and away from their competitors’ sites.

The real trend here is that these companies are all attempting to win the war by monetizing eyeballs, clicks, shares and recommendations, creating a virtuous circle of user engagement and revenue generation.

So how will Google’s move to animated banner ads on search pages affect the industry? One thing to remember is that this isn’t the first time that Google has done something of this nature, and it certainly won’t be the last.

Less Is More

While Google is generally held to higher standards than other search engines, consumers and the industry should expect that the company will move forward with plans that promote its own products. However, Google’s strategy to use display ads rarely is key; pushing ads out on a regular basis would hurt both its reputation and its products. Google is tactical when placing ads on its prime white real estate and is aware that people wouldn’t use Google as often if it were bursting with ads.

Of course, from my point of view, there is a little bit of irony in this most recent example: the search giant reverting to display ads to push its products. Because that’s what search retargeting is: remembering what consumers search for and then serving display ads based on those searches as consumers move around the web. Now, whom should I call to buy inventory on the Google home page?