Google looks to sell advertising to newspapers
By Leah McBride Mensching, Wednesday 2 January 2008 at 23:36 :: Advertising :: #1040 :: rss
Google has been in talks with several European newspaper publishers to sell ad space in their newspapers to the online giant's clients, a move that worries newspaper executives around the globe.
The service, called Google Print Ads, would use an almost bartering type of method, in which customers would be able to choose a newspaper online by using Google, and then place a bid for advertising space, The Times of London reported Sunday. The bids would be on a daily and page-by-page basis.
Instead of paying a list price for placing an ad, those bidding on ads through Google would offer a price they would be willing to pay for the advertisement, and the newspaper publisher would then decide whether to accept or decline the offer. Google would get a cut of the advertising revenue from each deal between advertisers and publishers, and also designs the ad if the advertiser is not able to do it alone, The Times reported.
The programme is an extension of Google's AdWords product.
In the United Kingdom, Google owns about 75 percent of the search advertising market. Due to high broadband take-up, the country is one of four in which online advertising is more than 15 percent of total media spend, pressuring publishers and broadcasters, according to The Times.
Google's advertising revenues in the United Kingdom rise about 40 percent to about £1.25 billion in 2007, overtaking publisher Trinity Mirror's income, which includes advertising and newspaper sales. Google had already overtaken Channel 4 and ITV1 in the third quarter.
ITV Chairman Michael Grade is calling for tighter regulation of the quickly expanding Google, according to The Times.
“We believe that online and offline are part of the same melting pot,” Google said, according to The Times. “It is not an ‘either/or’.”
One British newspaper executive told The Times that Print Ads “is an interesting development with the prospect of bringing new advertisers into our newspapers ... If advertisers find it to be an effective channel, then there is the prospect to form direct relationships on a more normal basis.”
Those expected to use Print Ads are smaller business owners who have never advertised in a newspaper, and would not have been able to afford it otherwise, as well as companies that have been spending more online to stretch their advertising budgets further.
“We can foresee newspaper groups participating in online exchanges for print advertising in the near future, but consider it unlikely that the larger players will automatically gravitate towards a large specialist third-party online provider without looking for other solutions first,” Phil Stokes, head of entertainment and media practice at PricewaterhouseCoopers, told The Times.
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