Parks Associates Blog

Monday, November 06, 2006

Google's Print Ads Program Unveiled

Google today announced the alpha test of its Print Ads program that allows advertisers to bid against each other to place their ads on newspapers and magazines. More than 50 major newspapers are currently on the trial.

This is another splash Google made in bolstering its role as an innovator in the advertising space. The impact is both near-term and long-term: first, the Print Ads program is essentially a B2B transaction platform that connects the buyers and sellers of the ad space on printed media and eliminates the middlemen played traditionally by media buying agencies. Presumably, Google will generate some broker fees from facilitating these transactions, although it admits the initial cash outlay will be more than the cash generated.

But Google stands to benefit not just from an “eBay-like” service. The more long-term benefits are from advertisers’ trust of and reliance on Google as ad optimization engine, whether it’s search, display or offline traditional media ads. By entering this traditional media space, Google reveals its ambition to provide a holistic solution to advertisers and tries to alleviate advertisers’ long-time agony of unable to optimize ad buying across multiple media formats. This weakness is correctly spotted by Google, and this Print Ads program and Google’s purchase of DMarc earlier this year are clear steps toward that goal. Google sweetens the deal by providing access to its measurement metrics database. Even though the value-added here appears to only provide print ads’ impact on online traffic patterns, this offline and online “linkage” is the tip of an iceberg of how advertisers can understand their ad placement’s impact on their top-line. If you continue to probe and speculate Google’s future moves (if I may), the outcome could be more than just cage-rattling, but groundbreaking. Imagine, Google can invent better algorithms to measure TV ad viewing than Nielson does, and imagine it can get its hands on scanner data that capture consumers buying habits, then all of a sudden, Google’s tentacles will reach all corners of the advertising space. With its powerful computing power and impressive collective brain cells, Google might be able to tell advertisers that maximization of sales or customer retention can be achieved by placing x% of ad dollars on search marketing, x% on radio ads in certain markets, x% in TV ads, and so on. It is the Holy Grail advertisers are searching for and once they have it from Google, Google will be the single most influential force in maneuvering ad spending.

Of course, such a solution is not come by easily and Google might fail in the process. But the company is constantly experimenting and righting itself back on track. During Google’s searching process, the increasingly endangered species are media buyers. Commenting on this Google news, Peter Gardiner, chief media officer for New York media agency Deutsch downplayed the impact on his industry by saying “It might start changing the way we do certain things.” Come on guys, let’s be realistic. It is not “might” but “have to” for you.

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