20 July 2007

Google lays hands on the newspaper ads market with Google Print Ads

With 41.6% market growth in 2006 and a total market share of 11.4%, internet advertising has been the fastest growing advertising sector in the UK for some time. In fact, with the exception of Outdoor advertising, the advertising market (including Press, TV and radio advertising) has actually declined.

UK internet users spend a quarter of their media day online, which makes the internet the second most consumed medium after TV. However, people still read newspapers. In fact, Scarborough Research USA outlines that nearly three out of four adults in the top fifty markets read either a daily or Sunday newspaper in a typical week. Newspapers have been found to be the number one providers of local news and are therefore still a very powerful information and communication tool. Display and classified print advertising is yet a popular way of reaching local audiences in particular.

Google followed this train of thought and recently announced that Google AdWords, Google's flagship advertising product, would extend to newspapers for US advertisers. Google has been experimenting with its Google Print Ads platform for a while and failure had been prophesied by various critics. However, with a healthy number of newspapers available and procedures well worked out, the project now seems to have reached a turning point.

The platform was launched for a test in late 2006; and now that an official release is under way, it includes more than 200 national and local newspapers, with a combined circulation of 30 million (50% of the US daily circulation).

Google AdWords-subscribed advertisers can select newspapers, plan their campaigns and make online bids on offline newspaper ad inventory. However, Google Print Ads is not based on an auction system, but rather, an offer-based marketplace: advertisers propose the price they would be willing to pay for a particular ad, and newspaper publishers have the right to veto the offer. Big advertisers with traditional newspaper sales representatives will therefore not able to achieve better rates via Google online. A feedback option is available for rejected ads and the market equilibrium can be kept.

Agencies and advertisers are able to access a new universe of publishers using a single web interface to browse through ad inventory. On the other hand, publishers can reach a large range of new customers (particularly small or medium sized companies) via the Google AdWords network.

After rejecting this new way of sourcing press advertisers, publishers are now welcoming Google's platform. Google Print Ads has the potential to impress marketers with its simplicity, efficiency and accountability. However, will Google Print Ads be able to revive the newspaper ad market? Is Google going to redefine traditional media planning and buying processes? And when will Google make this service available in the UK? With a keen eye on these pioneering developments, we should have an answer soon enough.

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