Gmail: the Next Gator?

E-mail marketers may be surprised to learn what happens when recipients see their messages in Google’s soon-to-debut, ad-supported email application. Messages contain ads for competitors’ products, ClickZ News tests revealed.

Because the contextual ads are targeted based on email message content, as determined by Google’s technology, commercial messages are the ones most likely to trigger ads. That’s because they’re most likely to contain commercial product or brand names, for which Google’s AdWords advertisers frequently buy keywords.

A recent email newsletter from Neiman Marcus triggered ads with the headlines “Kate Spade Handbags,” “Ferragamo at Neoluxury” and “Prada Handbags.” Listings were for BizRate.com, Neoluxury.com and FinestDesigners.com, respectively. All this resulted from the Neiman Marcus email subject line: “Salvatore Ferragamo: Shop the spring collection of shoes, handbags, and more.” (The main message was in graphics files, none of which display by default in the Gmail client. In such situations, only the competitors’ ads appear, unless a user clicks to display external images.) Neiman Marcus declined to comment, as did other email marketers and email service bureaus ClickZ contacted.

Another example: a Travelocity mailing that triggered ads from Hotwire, Cheapfares.com and TravelFleaMarket.com. All are Travelocity competitors. Similar situations occur with publishers’ email newsletters, which are often ad-supported; and transactional email, such as online bill statements or order confirmations.

The combination of the email marketing and contextual ads effectively creates a competitive ad environment. It’s analogous to McDonald’s paying someone to wear a McDonald’s-branded sandwich board in front of a Burger King. In the interactive arena, it’s akin to the kind of competitive pop-up ads that have generated controversy (and legal action) for Claria.

“Google targets ads based on the text of a message,” said a Google spokesperson. “If a message contains information about a service or product, Gmail may display a competitor’s ad. This is a benefit to users because it provides additional relevant information that enables them to make informed decisions.”

If Gmail is released more widely in its current form, the competitive environment is certain to intensify. Google recently shifted its trademark policy to allow advertisers to bid on trademarked keywords. Hypothetically, a message from Banana Republic (for example) could, simply because of its subject line, trigger ads from J. Crew, Eddie Bauer and the like.