Asymmetrical Information - Megan McArdle

04.25.13

Why is Google Running Ads for Its Own Product?

Social networks are supposed to sell themselves. Apparently not.

When web publications have more pages than advertisers, they often run "house ads"--ads for the publication itself.  It's an increasing problem for the industry, because offering a digital page is cheap.  This is one of the reasons that web advertising has so far utterly failed to make up for the print ad revenue that publications have lost as traffic has moved online.  

This morning, I saw something a little bit surprising on James Lilek's site: a house ad for . . . Google.

I've never seen a Google house ad before.  And I had not, prior to this, been googling for information about Google+, or otherwise intimating to the search cookies that I wanted to be fed this sort of ad.  Which suggests one of two things: either Google is so disappointed in the performance of Google+ that it's willing to forgo ad revenue in order to try to goose a failing brand, or Google is no longer getting enough ad buys to fill its ever-growing inventory.  Either one is pretty interesting.