Most of Google's business comes from search advertising (also called Pay per Click - PPC).  This is the little adverts that appear at the top and to the right hand sid of the the search results. However, they are also, to a very small extent, in the display advertising business. To prove a point, Google paid $3.1 billion for DoubleClick in 2008, one of the leading players in the display advertising business.

Yesterday, Google announced that it was acquiring a company called Teracent, a dynamic ad serving and optimization startup company.

Teracent's technology displays ads in real-time. Ad elements go in and Teracent's technology figures out how they can be combined to produce the best results:

Teracent's technology can pick and choose from literally thousands of creative elements of a display ad in real-time — tweaking images, products, messages or colors. These elements can be optimized depending on factors like geographic location, language, the content of the website, the time of day or the past performance of different ads.

This technology can help advertisers get better results from their display ad campaigns. In turn, this enables publishers to make more money from their ad space and delivers web users better ads and more ad-funded web content.

Google's announcement shows the product of a Teracent optimization:

The ad on the bottom is the product of Teracent picking and choosing ad elements using machine learning, and ostensibly converts better than the ad on the top.

Google believes that Teracent's technology "has great potential to improve display advertising on the web" and once Teracent is in the Google fold, plans to make its technology available to DoubleClick and Google Content Network advertisers.

Click for more information from Google on the purchase

Read more about Teracent

Anthony Quigley