By Year
24 Aug 2006
When Google opened its new London headquarters last year, it tried to import some of the Silicon Valley magic that had transformed the company from a geeky internet search firm into one of the world's biggest media companies.
Google founders Larry Page and Sergey Brin invited the straitlaced Brits to help themselves to sweets, admire the lava lamps and, of course, lounge in the Google-branded bean bags that adorn the new office in Victoria.
But Googlers - as the company's employees call themselves - may not have too much time to wallow in the squashy seats.
Just a few minutes' stroll from their chic new British headquarters, Microsoft is fitting out new offices of its own. The five-storey building will be home to 850 staff working for Microsoft's fast-growing online division, which has Google firmly in its sights.
Facing what some believe is the biggest threat in its 30-year history, Microsoft, led by chief executive Steve Ballmer, is hitting back at Google by developing a new range of internet-based services under the Live banner.
The new services are vital if Microsoft is to win its share of the multi-billion-pound online advertising market, which has mushroomed as a new generation of young consumers shuns television, radio and newspapers in favour of the internet.
This week, Microsoft will fire a new salvo at Google with the launch in Britain of Adcenter - a software platform that will allow advertisers to target specific groups of consumers.
Internet advertising is now big business. In the UK advertisers spent £1.3 billion online last year, up 65% on the previous year. Based on current trends, the Internet Advertising Bureau expects revenue generated from internet advertising to exceed £2 billion this year - overtaking display advertising in Britain's national newspapers.
Most of the £1.3 billion spent by advertisers was directed at search-engine advertising, which allows companies to target consumers as they research a holiday or look for a plumber.
In Britain seven out of ten of us use Google, and when we trawl the internet for, say, a used car, the search engine delivers the results and alongside them displays about a dozen "sponsored links" from companies that have paid to appear on the page. Each time a consumer clicks on one of these links, Google gets a fee.
According to Sapna Satagopan, an analyst at Jupiter Research, the rate paid per click varies widely. In America, compensation lawyers are believed to have set the record for the highest fee - reportedly bidding up to $100 (£52) a click to list alongside information on mesothelioma, a lung cancer caused by exposure to asbestos.
Nikesh Arora, vice-president for Google Europe, said: "It is hard to target individuals in a cinema audience of 600 watching Spiderman. But on the internet you can not only target an individual looking to buy a Spiderman game, you can interact with him."
In Britain the cost per click is lower, said Jim Brigden, managing director of The Search Works, a specialist advertising agency that advises the likes of Lloyds TSB, Carphone Ware- house and Lastminute.com. "Typically, you will pay 30p a click," said Brigden, although advertisers have reportedly paid up to £10 per click for more popular search terms, such as unsecured loans and data-recovery services.
The Search Works is one of a number of British agencies that have road tested Microsoft's Adcenter, which allows advertisers to use the information Microsoft holds on its users to target specific groups.
With 10m registered users of MSN instant messaging and 8.8m registered users of MSN Hotmail, Microsoft knows an awful lot about many of those using MSN.co.uk or Live.co.uk to search the internet - including their age, sex, where they live and in some cases even how much they earn.
"A small business, for example, will be able to target a geographic area," said Sharon Bayley, general manager of online services in Britain.
Bayley said the evidence from America - where Adcenter was launched earlier this year - suggests that targeting produces better results for advertisers, with Adcenter delivering 75% better conversion rates. "You get much better quality click-throughs," she said.
And if advertisers and ad agencies want to understand what makes consumers tick, they can use more than a decade of MSN data to research exactly what specific consumers look for on the internet.
BRITAIN's media bosses and advertisers would love to know what makes Gerard McVeigh tick. An 18-year-old who plans to begin a university course in the autumn, McVeigh is the consumer of the future.
He rarely buys a newspaper and, like millions of other young Britons, spends almost as much time surfing the net and texting friends as he does watching television.
Charlie Makin, chief strategy officer at the media buyer BLM, believes that loyalty to media brands is disappearing.
"Historically media owners have been quite lazy and they are now paying the price. Today people are far more selective. They are still looking for entertainment but they are rejecting poor programming," said Makin.
Cilla Snowball, chairman of Abbott Mead Vickers BBDO, Britain's biggest ad agency, said: "The media landscape is changing. The challenge is to create compelling ideas."
This shift has forced even huge companies like Procter & Gamble - the consumer group whose brands include Pringles and Gillette - to change the way they advertise.
"The trend at P&G over the past 10 years has been to spend proportionately less on television advertising and more on other media," said Bernard Balderston, director of media at Procter & Gamble, a bellwether of advertising spending.
The Times: You are the target
Microsoft and Google are battling for dominance in the online ad market. The winner will be the one that knows the most about you. Report by Richard Fletcher and Mark Kleinman.When Google opened its new London headquarters last year, it tried to import some of the Silicon Valley magic that had transformed the company from a geeky internet search firm into one of the world's biggest media companies.
Google founders Larry Page and Sergey Brin invited the straitlaced Brits to help themselves to sweets, admire the lava lamps and, of course, lounge in the Google-branded bean bags that adorn the new office in Victoria.
But Googlers - as the company's employees call themselves - may not have too much time to wallow in the squashy seats.
Just a few minutes' stroll from their chic new British headquarters, Microsoft is fitting out new offices of its own. The five-storey building will be home to 850 staff working for Microsoft's fast-growing online division, which has Google firmly in its sights.
Facing what some believe is the biggest threat in its 30-year history, Microsoft, led by chief executive Steve Ballmer, is hitting back at Google by developing a new range of internet-based services under the Live banner.
The new services are vital if Microsoft is to win its share of the multi-billion-pound online advertising market, which has mushroomed as a new generation of young consumers shuns television, radio and newspapers in favour of the internet.
This week, Microsoft will fire a new salvo at Google with the launch in Britain of Adcenter - a software platform that will allow advertisers to target specific groups of consumers.
Internet advertising is now big business. In the UK advertisers spent £1.3 billion online last year, up 65% on the previous year. Based on current trends, the Internet Advertising Bureau expects revenue generated from internet advertising to exceed £2 billion this year - overtaking display advertising in Britain's national newspapers.
Most of the £1.3 billion spent by advertisers was directed at search-engine advertising, which allows companies to target consumers as they research a holiday or look for a plumber.
In Britain seven out of ten of us use Google, and when we trawl the internet for, say, a used car, the search engine delivers the results and alongside them displays about a dozen "sponsored links" from companies that have paid to appear on the page. Each time a consumer clicks on one of these links, Google gets a fee.
According to Sapna Satagopan, an analyst at Jupiter Research, the rate paid per click varies widely. In America, compensation lawyers are believed to have set the record for the highest fee - reportedly bidding up to $100 (£52) a click to list alongside information on mesothelioma, a lung cancer caused by exposure to asbestos.
Nikesh Arora, vice-president for Google Europe, said: "It is hard to target individuals in a cinema audience of 600 watching Spiderman. But on the internet you can not only target an individual looking to buy a Spiderman game, you can interact with him."
In Britain the cost per click is lower, said Jim Brigden, managing director of The Search Works, a specialist advertising agency that advises the likes of Lloyds TSB, Carphone Ware- house and Lastminute.com. "Typically, you will pay 30p a click," said Brigden, although advertisers have reportedly paid up to £10 per click for more popular search terms, such as unsecured loans and data-recovery services.
The Search Works is one of a number of British agencies that have road tested Microsoft's Adcenter, which allows advertisers to use the information Microsoft holds on its users to target specific groups.
With 10m registered users of MSN instant messaging and 8.8m registered users of MSN Hotmail, Microsoft knows an awful lot about many of those using MSN.co.uk or Live.co.uk to search the internet - including their age, sex, where they live and in some cases even how much they earn.
"A small business, for example, will be able to target a geographic area," said Sharon Bayley, general manager of online services in Britain.
Bayley said the evidence from America - where Adcenter was launched earlier this year - suggests that targeting produces better results for advertisers, with Adcenter delivering 75% better conversion rates. "You get much better quality click-throughs," she said.
And if advertisers and ad agencies want to understand what makes consumers tick, they can use more than a decade of MSN data to research exactly what specific consumers look for on the internet.
BRITAIN's media bosses and advertisers would love to know what makes Gerard McVeigh tick. An 18-year-old who plans to begin a university course in the autumn, McVeigh is the consumer of the future.
He rarely buys a newspaper and, like millions of other young Britons, spends almost as much time surfing the net and texting friends as he does watching television.
Charlie Makin, chief strategy officer at the media buyer BLM, believes that loyalty to media brands is disappearing.
"Historically media owners have been quite lazy and they are now paying the price. Today people are far more selective. They are still looking for entertainment but they are rejecting poor programming," said Makin.
Cilla Snowball, chairman of Abbott Mead Vickers BBDO, Britain's biggest ad agency, said: "The media landscape is changing. The challenge is to create compelling ideas."
This shift has forced even huge companies like Procter & Gamble - the consumer group whose brands include Pringles and Gillette - to change the way they advertise.
"The trend at P&G over the past 10 years has been to spend proportionately less on television advertising and more on other media," said Bernard Balderston, director of media at Procter & Gamble, a bellwether of advertising spending.
