Over the past year Google has made a concerted effort to extend the overwhelming success of its Adwords online advertising program to traditional media. Their highest profile test was with print magazines, although they have made moves into both television and radio (video integration for television and the acquisition of dMarc for radio). As we outlined earlier in this publication, the magazine test for print advertising received a very poor reception. Still, word came out this week that Google has moved into a more comprehensive print test and will integrate its Adwords program into the print editions of 50 major newspapers.There is little to lose for the newspaper companies (including Gannett, Hearst, and the Tribune Company), which see Google’s immense base of smaller advertisers as new and untapped sources of revenue. For Google, it is the biggest test for what they see as their ultimate goal: To be a one stop shop for advertisers, allowing them to advertise in any medium via a central computer interface.
It will be interesting to see how the test goes. Google’s magazine test failed for some very fundamental reasons, one of the biggest being that the companies that advertised in print had a hard time grappling with the lack of response that they received with click-throughs and measurable impressions. Google’s newspaper test will start with 100 advertisers, and you can be sure that these will be advertisers without any previous newspaper advertising experience. How they handle their expectations and the process will be a big indicator as to whether this print experiment will go better than the magazine one.
There is a significant upside for Google, however, if they are successful. Newspaper companies struggle with unsold small inventory, just as other traditional media do. Newspapers have no mechanism in place, however, to find smaller clients to sell the space to. Owen Youngman, VP/Development for the Chicago Tribune, told the New York Times, “Google says they can bring us thousands of small advertisers for space we would otherwise fill with house ads, and we say ‘Great.’”
Google is carving out a complementary strategy with traditional media, focusing on unsold and small-space inventory and selling it to their stable of smaller advertisers. Filling this inventory is an area where traditional media has not focused its efforts, creating a win-win situation for both Google and the print and broadcast industries.
While the overall strategy of connecting Google’s advertisers with underutilized traditional media inventory appears strong, ultimately the key to its success will come down to the advertisers themselves. The magazine experiment was a major red flag: Smaller Internet-savvy Google advertisers found the experience of advertising in glossy magazines disappointing and ineffective. There is no saying that these opinions won’t repeated with the newspaper experiment.
One of the key issues will be managing the expectations of advertisers. The New York Times mentioned online retailer Ebags as a company interested in trying Google’s newspaper advertising. The company has no ad agency and has never done print advertising, however, Peter Cobb, the company’s marketing director, is interested in doing print via Google because of its parallel to the online contextual advertising they receive via Adwords: “You can target professional males in business and sports sections and women in living and style,” Cobb stated.
The trouble is that print advertising is not contextual online advertising, and the immediacy and comprehensiveness of measuring online advertising results simply doesn’t exist in traditional media. While the process of placing the ad may be similar, the response couldn’t be more different.
Google appears to understand this. Also getting headlines this week was the news that Google was hiring a large number of radio sales people. While some are speculating that Google was prepping to buy a broadcaster like Clear Channel, it is more likely that Google learned its lesson from its failed magazine experiment (where unsophisticated advertisers ended up dissatisfied with their experience, despite the fact they received spectacular ad placement for pennies on the dollar) and is building up a sales force to teach novice radio advertisers about both execution and expectations.
If Google can overcome the difficulties in connecting its Internet-focused advertising base with non-Internet media advertising, it will have a commanding position in advertising across all of media. For an advertiser that doesn’t have the resources to hire a Madison Avenue agency, the possibility of an overall print-television-radio-Internet campaign may still be a possibility if Google achieves its goals.
