The test program will last three months and is designed to simplify the way print advertisers purchase advertising space in US newspapers: advertisers will be able to locate publications of interest, research ad rates and purchase advertising space simply by accessing Google's website.
Some believe it's an unlikely partnership, as newspapers have long been viewed by the internet as a threat to their advertising. However, both sides are expected to benefit from the collaboration; Google, which made an unsuccessful attempt at magazine advertising last year, will get another chance to dabble in offline advertising. But while the search engine company expects to gain from this game, newspapers will undoubtedly claim a heftier share of the benefits.
The collaboration is taking place just in time to revive wilting newspaper revenues and a dispersing readership. In fact, the latest figures from the Audit Bureau of Circulation report that national daily circulation has declined by 2.8% for the six months ending on the 30th of September. What's more, the plan has potential to draw a wave of new advertisers to newspapers. Newspapers will essentially gain a boost from an industry which has a bit of power to spare; they are, therefore, inviting web advertisers with open arms.
So how will this collaboration differ from the previously unsuccessful venture between Google and magazine advertising? For starters, control will largely rest in the hands of newspapers; in addition, the method by which ad space is sold will shift. Google had previously sold ad space in magazine publications through an auction system. This time around, however, there will be no auction; instead, interested advertisers will submit their bids through Google's AdWords site, which will list available inventories categorised by various newspapers. Any offers will then be relayed to publishers, who will decide whether to accept or reject them. If accepted, advertisers will then be able to upload their artwork directly through the site. Companies expected to bid on advert space include Netflix Inc., EHealth Inc. and Avis Budget Groups Inc.
Google will not receive any commission from the programme during the three-month test; however, if the collaboration advances beyond 'test mode' by next year, cash will undoubtedly roll in for the search engine giant who, it is believed, charge a 20% commission on the web ads which it places.
Google are also set to launch a radio advertising system by the end of the year, and are hoping to try their hand at television advertising as well. But why is there such an eagerness to dip into offline advertising? There could be several reasons, but diversification is likely to be the main one. With an industry as 'impulsive' and unpredictable as the web, it's probably wise business practice to set down roots in a variety of mediums. But this particular venture demonstrates that Google can set its roots and spread its wings concurrently - and by all accounts, this is no pair of small wings.
