November 20, 2009, 12:00 AM

Google is cooking up new ways to run ads with images and on mobile devices

Google Inc. continues to search for new search marketing revenue streams.

Google Inc. continues to search for new search marketing revenue streams.

Several retailers are testing Google’s new Product Listing Ads program, which features product images in search ads that appear alongside search results on Google.com. Retailers are charged only when they make a sale, not on each click.

Until now, paid search ads appearing in the results from searches on Google.com were limited to ads based on keywords purchased through Google’s AdWords program, a spokeswoman says. And ads with images were only shown through Google Product Search at Google.com/products.

Showing image-enhanced products ads in a cost-per-acquisition model can make general search results pages on Google.com function more like an e-marketplace with offerings from multiple retailers. That could increase competition among shopping portals while offering consumers more ways to shop, says Colin Sebastian, a stock analyst who follows Google and several e-commerce companies at Lazard Capital Markets.

“We believe search engines are becoming more relevant for consumers shopping online-making it easier to discover, research and purchase products,” he says. “For online sellers, the spotlight on product listings and new cost-per-acquisition pricing could drive increasing traffic flow, help offset premium prices for paid search, and increase competition among existing online marketplaces.”

A recent search on Google.com for “bed in a bag” revealed alongside general information about bedding sets several sponsored Product Listing Ads with product images. Retailers whose ads have appeared with images next to those search results have included Target.com and Sears.com.

In another development, Google is planning to build on its technology and expertise in mobile advertising with its agreement to acquire AdMob, an ad marketplace and provider of mobile display ad technology, for $750 million in stock.

paul@verticalwebmedia.com

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