'Ads by Google': A Billion-Dollar Brainstorm Turns 10

Google's Susan Wojcicki on AdSense, the program changing web advertising for good
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On June 18, 2003, Google made an announcement. Following the successful launch of AdWords, the firm was going to extend its search-based ad program with a new service that would allow web publishers to serve ads themselves -- ads that would be precisely targeted to the specific content of their individual web pages. "With Google AdSense," Google announced, "publishers serve text-based Google AdWords ads on their site and Google pays them for clicks on these ads." This, Google reasoned, was a win-win: "users benefit from more relevant ads and publishers can maximize the revenue potential of their websites."

Over the past ten years, that core idea -- giving advertisers the ability to reach across different web pages, dynamically -- has grown into a service that, in some very real senses, helps to fuel the economic ecosystem of the web. If you see an ad on a random website, there's a good chance that the ad is being served with the help of AdSense. In June 2004, AdSense launched display ads. In 2005, it teamed up with Blogger to help blog publishers earn money from their content. In 2007, it added ads for video and mobile content. In 2009, it added expandable ad formats and interest-based ads. Come 2011, more transactions were made through AdSense every day than on all the world's major stock exchanges.

AdSense "basically turned the Web into a giant Google billboard," Danny Sullivan, editor of Search Engine Land, told USA Today in 2007. "It effectively meant that Google could turn everyone's content into a place for Google ads." And that, in turn, helped to transform Google into ... Google. AdSense, after Google's 2007 acquisition of DoubleClick, is now the largest player in the display ad business, and it has provided Google with a secondary revenue stream that complements the company's income from basic search ads.

Google is quick to point out that the windfall benefits more people than Google alone. Last year, AdSense shared $7 billion with more than 2 million publishers, Google notes. There is now such a thing as an "AdSense millionaire."

AdSense, in other words, is a classic Silicon Valley thing: a simple insight with wide implications. And the woman behind it, in this case, is Susan Wojcicki, who helped to build the program from an idea into a technology back in 2003. (You might also know Wojcicki as Google's new SVP of Advertising and Commerce, or as the renter of the garage that served as Google's first makeshift headquarters.)

I spoke with Wojcicki about AdSense's growth over the past ten years -- and about what we might expect from the service over the years to come. The conversation below is lightly edited for length.

Reading that first AdSense press release, I'm struck by how closely the service of 2013 resembles the service as introduced in 2003. How do you think of it, 10 years later? What do you think are the most significant aspects of its evolution?

AdSense was really revolutionary at the time, because advertisers before that were advertising, say, on a sports section. And we could actually dynamically serve them on the exact sport that they wanted. So if they were interested in hockey, we could serve them on all the stories about hockey that were running dynamically across the Internet.

And pretty much from the first day we released AdSense, we could tell it was going to be successful with publishers. We had so many publishers signing up, and it fueled a lot of innovation for publishers in enabling them to generate revenue in all kinds of ways that they might not have imagined -- and that we didn't necessarily imagine, ourselves.

So we started with this relatively straightforward concept, which was taking amazing technology that lots of people at Google had worked hard on, and then putting it on publishers' websites. And then one thing led to another. So we developed this technology, and then we realized that publishers wanted to have all these different tools, and different controls. And advertisers wanted to have all these tools and controls.

It's amazing for me, because it started as this relatively straightforward product. But the amount of investment we've made over the past 10 years has grown it into a really sophisticated suite of products for both publishers and advertisers -- something that enables publishers to monetize their sites, and advertisers to be able to get the reach that they want.

What does that product look like going forward? How do you see it changing? 

The interesting thing about advertising is that it's business-to-business - but it needs to move as fast as consumers move, because advertisers need to be where consumers are. So if all consumers are suddenly consuming all their media online, then advertisers need to move as fast as the users just moved.

That puts a lot of interesting pressure on us, and on the industry, to innovate as fast as consumers innovate. And advertising is a huge industry. So being able to try to move that all online, and make that really effective for publishers and advertisers, is a really big opportunity for everybody - for Google, for advertisers, and for publishers.

So looking forward, we're really focused on trying to think about how to solve that: how to continue to grow the ecosystem, and how to continue to enable online advertising to be more effective for advertisers. And we're looking at the brand opportunities as more and more users are moving online.

Although we've invested really heavily in this business for the last ten years, it's an area that we plan to continue to invest in equally heavily going forward. I think the next ten years will be as exciting as the last ten years were.

Has your sense of what "relevance" means, in the advertising context, changed at all over the past 10 years?

What we pioneered 10 years ago was contextual targeting: the idea that if you have an article about cooking, or making a craft, or travel, then we would serve an ad that's relevant to that. So if you have an article about cooking, you have, say, an ad for the ingredients that go in the recipe.

What's evolved since then is the recognition that there are some types of sites where the context isn't really relevant for advertisers. And probably the most significant area in that regard has been news. You read about what's happening in the Senate, or you read about a bill being passed, or you read about a controversy that's happening at the moment - and that's not necessarily a commercial type of content. It's very important, but it's not commercial.

So what we've really invested in has been audience targeting, and really trying to understand who the users are, and to understand what they want to see.

So if you have a person who is reading a lot of articles and headline news, what are the things that are relevant for them? It's trying to understand your user base a little bit better. The more you know about the users, the more you can serve something that's useful for them. So audience targeting, and serving ads to the right audience, is something that we've invested a lot in.

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Megan Garber is a staff writer at The Atlantic. She was formerly an assistant editor at the Nieman Journalism Lab, where she wrote about innovations in the media.

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