Schmidt: Google’s social ad strategy is “trial and error”

Schmidt: Google’s social ad strategy is “trial and error”

Posted by Steve O'Hear 
Google’s strategy for monetizing the social web is one of “trial and error”, says CEO Eric Schmidt in a recent interview with German publication FAZ.net. “That’s the way we do it at Google”.

When asked specifically about Google’s arrangement with MySpace in which the search giant has guaranteed ad revenues of $900 million up until 2010 irrespective of how many ads are clicked on, Schmidt echoed earlier comments this year by Google co-founder Sergey Brin saying that the results have been dissapointing:

“MySpace did not monetize as well as we thought. We have a lot of traffic, a lot of page views, but it is harder than we thought to get our ad network to work with social networks. When you are in social network, it is not likely that you’ll buy a washing machine. It is not a long term problem but it is taking us longer than we thought. We are trying new ways, new approaches all the time”, says Schmidt.

The challenge is to find way of making ads more engaging but the solution hasn’t been invented yet, according to Schmidt: “The advertising has to be more entertaining, more interesting, more immersive compared to what we have today… We are not there yet but I am optimistic that it could work very well.”

Also see: Report: MySpace turning News Corp. stock toxic; advertisers shy of UGC

More revealing, Schmidt concedes that web 2.0 isn’t the revenue opportunity it’s often been made out to be. “This is not where the money is”, he says.

Instead, look to the next frontier — mobile...