The Disintermediation in Advertising Brought about by Search Engine: Based on an Analysis of Google Advertising System

Electronic commerce causes disintermediation, which is displacement or elimination of market intermediaries, in many traditional industries. Will internet bring about disintermediation in Advertising industry, when internet is applied to advertise? Analyze the components and mechanisms of Google´s advertising system, this research finds that advertising by search engine is more targeting with lower cost than traditional advertising that makes some functions of traditional advertising to be displaced or even eliminated. By giving users more control and pro-activity on content, the internet is fundamentally changing the traditional advertising mechanisms, which based on mass communication model, and bringing about a deep revolution on advertising industry.