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

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Our approach to maximizing advertising revenue for online publishers

Hundreds of thousands of advertisers use search advertising — short, highly relevant text ads alongside search results on Google and other search engines — to grow their businesses. Thanks to a decade of innovation, search advertising is an open platform that allows businesses to easily connect with customers. As you browse the web today, you’ll also see “display advertising,” such as videos, images and interactive ads. Like search ads, these connect users with products, services and ideas that interest them. For advertisers, display ads are vital in boosting awareness and sales. For websites and online publishers, they help fund investments in online content and the web services that we all use. But with a multitude of display ad formats, and thousands of websites, it often takes thousands of hours for advertisers to plan and manage their display ad campaigns. With this complexity, lots of advertisers today just don’t bother, or don’t invest as much as they would like. On the other side of the equation, some publishers are left with up to 80% of their ad space unsold. It’s like airlines flying with their planes mostly empty. And for the ad space that they do sell, publishers also have to deal with the complexity of managing thousands of advertisers and campaigns. We believe that a better system built on better technology can help grow the display advertising pie and benefit everyone. Three principles underpin our approach to the display advertising field: 1. Simplify the system for buying and selling display ads : For example, our DoubleClick ad serving products help advertisers and publishers manage campaigns and ad formats across thousands of websites and from thousands of advertisers. 2. Deliver better performance that advertisers and agencies can measure : We’re building a host of new features to help advertisers to run display ad campaigns across the Google Content Network (comprising hundreds of thousands of AdSense partner sites) and on YouTube. We’re also developing better measurement and reporting technology so they can figure out what’s working and what’s not. 3. Open up the ecosystem : We want to democratize access to display advertising and make it accessible and open, like search advertising. We recently launched the Display Ad Builder to help businesses easily set up and run display ad campaigns. 80% of advertisers who use that product have never run a display ad campaign before. We’ve been working hard to put these principles into practice, and today we’re excited to announce the new DoubleClick Ad Exchange, a step towards creating a more open display advertising ecosystem for everyone. The Ad Exchange is a real-time marketplace that helps large online publishers on one side; and ad networks and agency networks on the other, buy and sell display advertising space. These publishers and ad networks manage and represent large volumes of ads and ad space from lots of advertisers and websites. By bringing them together in an open marketplace in which prices are set in a real-time auction, the Ad Exchange enables display ads and ad space to be allocated much more efficiently. This improves returns for advertisers and enables publishers to get the most value out of their online content. An explanation of the Ad Exchange is here (PDF). You can read in more detail about the features of the new DoubleClick Ad Exchange on the DoubleClick blog . AdWords advertisers will be able to run ads on sites in the Ad Exchange, using their existing AdWords interface . This means more high quality sites for AdWords advertisers to run display ads on. Similarly, our AdSense publishers will benefit from more high-quality display advertisers coming through the Ad Exchange. You can read more about these benefits on the AdWords Blog and the AdSense Blog . To find out more about our overall display advertising vision and the many services and features we’ve been investing in across the Google Content Network, YouTube and DoubleClick, check out the video below: We believe that growing the display advertising pie for everyone will greatly enhance the web experience for advertisers, publishers, and ultimately users. The DoubleClick Ad Exchange will help create a more open marketplace and is a major step towards that vision. Posted by Neal Mohan, Vice President, Product Management

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The DoubleClick Ad Exchange: growing the display advertising pie for everyone