After ‘toe in the water’ trials with print advertising Google may have found their niche in yet another market – selling newspaper print ads. Google tells Editors Weblog that not only does this project bring new advertisers to the print market but it also provides significant benefits to editorial departments. It looks good but some question the dominance this would give Google.
In April 2006 Google started working on a project known as PrintAds. - a sales bidding system for newspapers based on Google’s successful AdWords system. Newspapers provide details on their standard ad inventory including elements such as size, mono/colour, placement in paper etc. Advertisers then make bids on the system for any of these ads they want to purchase. Newspapers are able to accept or reject the bid for any reason. Tom Phillips, Director of Google PrintAds explains quite simply that Google provides a “system for booking ads and a universe of advertisers”.
The Alpha ran on a three-month trial with 50 large advertisers and 66 metropolitan newspapers. This trial showed that advertisers tend to bid one to six weeks in advance of publication and that newspapers accept or reject the offers almost immediately. About 50% are accepted - the reasons for rejection are mainly price based. Google was keen to emphasize that the system is not an auction so newspapers are under no obligation to commit actual space to this project unless the price is high enough. Some bids were frequently denied such as the New York Times travel section on a Sunday, which is almost always sold out well in advance. Throughout the process the newspaper keeps control of every aspect of the ad including approval of content and payment.
The Beta version will be released late spring. It will pretty much be the final product - Google refers to Beta as a full working product that just needs a little ‘fine tuning’.
Google believes that the front end of the system is simple to use and saves hours of time for a campaign. If an advertiser is planning a campaign, it’s much easier to use one interface than to contact 50 or more different newspaper sales teams and negotiate accordingly. This means that Google is bringing advertisers to the table that weren’t previously using print. A plus for any newspaper.
Advertisers can target by section (motors, jobs, travel etc), day of week and/or circulation. The sections will eventually be drilled right down into niche topics such as ‘wine, ‘tea/coffee’, ‘sports equipment’ and ‘ipod’, enabling even more targeted advertising and potentially opening up the market to niche companies that usually wouldn’t consider this advertising platform. Smaller companies in these niches could also group together to places ads targeting the niche audiences.
Later this year, advertisers will also be able to target users by demographic data as provided by Scarborough research. All this is likely then to drive up the price as the ads will be more targeted towards their markets; but only if Google PrintAds really take off.
Owen Youngman, VP of Development Chicago Tribune explained that whilst the revenues weren’t even a percentage of bottom line revenue, it has been a “little more than expected”. He was enthusiastic about the pros of the system but did not suggest that they would be expecting significant revenues any time soon.
Perhaps though, the learning from the trial will help their own business decisions and develop their advertising products accordingly. Youngman noted that they learnt a lot about what factors advertisers analyzed when making decisions. Lessons which Google seems happy to share telling Editors Weblog that “We see ourselves as natural allies to newspapers”.
So, Google can help boost advertising revenues for what appears to be very little effort for the newspaper…great. Other than potentially boosting revenues, which could in turn be spent on editorial ventures, how can it help editors?
As an editor, new ideas for columns and sections often spring to mind. Some are thrown out almost immediately, some are deemed unviable and some are fought for internally but never realized. The fact is that most new ideas are turned down due to financial reasons. Google PrintAds could be used to prove financial feasibility.
For example, an editor could decide to print a new wine section. He or she would look at Google PrintAds to find how much they could get for advertising space around that specific topic. The price the newspaper would get for the ads would quickly tell them whether or not the financial benefit would outweigh the cost. That’s to say nothing of a potential gain in circulation from a new product.
The system has the potential to give editors more knowledge and power in a world where editorial and commercial decisions are becoming more unified.
For this system to work properly a critical mass of newspapers and advertisers is needed. There are currently no competitors of this middleman system and Google says they are ‘well placed’ to provide this service over others.
It sounds reminiscent of other Google products in the making – a very good system for which they deserve credit but a little scary as to the hold it would have over the market. Besides plans for Google AdPrint to move into at least two markets in Europe later this year, they are already running similar experiments in the US with other advertising mediums such as radio and TV. Once all the individual fully functional systems are up and running (with measurement techniques), they will be merged to provide a super one-stop-shop sales platform for advertisers and marketers.
Despite Google’s insistence that everyone has signed up for the next round, Youngman tells Editors Weblog that there is still some negotiating to do before they sign on the dotted line. The real test will be to see if Google can build the critical mass it needs for this service to survive.
Source: Phone interviews with Tom Phillips, Director of Google PrintAds and Owen Youngman, VP of Development Chicago Tribune