Google Newspaper Advertising

Google is going after the newspaper advertising market, and seems to be gaining traction according to a story by the Washington Post. Google is all about making the advertising process efficient for advertisers and content providers. Search was just the first implementation. Why not do the same thing for all forms of advertising?

Note to tech readers: Burn this into your brain...it is not about the technology. It is not about search. I have been a technology guy for more than 20 years. Sorry to say, this is about an efficient advertising system that satisfies advertisers, content providers, and consumers.

In a previous post "Will Google dominate ALL advertising?" I talked about Google's approach to advertising services for web, radio, video, and the possibilities for newspaper, TV, and magazines. Google acquired dMark Broadcasting to enable advertisers to efficiently place and track ads on lots of different radio stations, all from one console. The radio stations may be able to auction their unsold ad space to the highest bidder, rather than use ad sales people to sell off a rate card.

This is exactly the approach with the newspaper advertising beta test, according to the Washington Post.

"Todd Haskell, vice president of business development at the New York Times Co., which is participating, said that the product has the potential to drum up new business from small advertisers but that the Times does not foresee letting go of its direct relationships with its largest advertisers."

"We think it's a wonderful way to introduce advertisers to the New York Times and print overall," Haskell said. Once the program gets going, he added, "we'd look to up-sell and migrate those [smaller advertisers] to bigger programs and better positions [in the paper] and move them out of the Google system. And we've been very upfront with Google about that."

"Google's newspaper project is part of its larger effort to transform advertising in traditional media. The company has launched a similar test selling ads on dozens of radio stations across the country. It also has experimented with ad sales for magazines, though after a couple of unsuccessful tries, the company indicated that the program was on the back burner. Google is also interested in selling TV ads."

What they don't seem to understand is that Google is all about the "Long Tail" of advertising...the thousands of small businesses that don't traditionally advertise in the newspapers. The New York Times says smugly, "we will up-sell them and move them out of the Google system." Clearly, this guy from the NYT doesn't get it.

Google makes its billions from hundreds of thousands of small advertisers, not the big guys that newspapers covet. It is analogous to eBay making a market for the hundreds of thousands of small businesses while Macy's turns up its nose. eBay is worth billions...how much is Macy's worth?

Madison Avenue advertising execs should try to adapt quickly...but they won't. They will hang on to their model, move up market to their 20 or 30 biggest customers, and watch Google dominate the thousands of low end advertisers. It is The Innovators Dilemma all over again.

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Comments

[Vijay]

Don,
I think you hit it right on the head...stats show that Ad revenue in newspapers is on the decline with the main competition coming from the online space... Newspapers need to look at the long tail... as you mention the "little guy" today cannot afford to hire an agency..

Will they is another question..

[Dimitar Vesselinov]

Why Madison Avenue is in crisis
"The real problem exists in evolving appropriate processes. It is here that even companies with the best intentions fail. While Madison Avenue's agency professionals are fond of touting the strengths of their unique culture, pointing repeatedly to 'thought leaders' and 'creative geniuses' with 'big ideas' capable of 'changing the culture,' these qualities are not the same as those required to build a system which actually drives inefficiencies out of tradition-bound, archaic systems. As one commentator neatly put it, 'if Madison Avenue can't build it, then Silicon Valley will.' "
http://www.dmnews.com/cms/dm-news/search-marketing/39422.html

[Dick Deluxe]

Don,

I think an additional hairball not included in the discussion is the effect of Craigslist on the other low end of advertising-classified ads, etc.

The top to bottom model of advertising is under attack and not only ad agencies are under pressure but also content providers at all levels. Hopefully the small town newspapers and alt rags won't all be swept under the rug-some of us still like to wander into nowhereville and pick up the local rag at the coffee shop and get a feel for the community.

DD