Google Upbeat Over Newspaper Ads Service

28 December 2006

MOUNTAIN VIEW, California: Web search giant Google says its foray into US newspaper advertising has proved a bigger-than-expected success and will be rolled out during the next few months.

The company began a trial of the service early last month [WARC News: 07-Nov-06], selling space in more than 60 top titles via online auctions. Up to 100 advertisers have been able bid for excess ad inventory, giving the participating daily papers a welcome revenue boost.

The system allows advertisers to choose the newspaper and the section, where they want the ad to run, and then place a bid for that space for one or more days. The newspaper decides which offers, if any, to accept.

Enthuses Tom Phillips, director of print ads at Google: "The volume [of ads sold] is tripling where we thought it would be. I think we'll have real impact next year. We open the medium to a whole new class of advertisers."

Publishers are less effusive in their praise for the service, although they acknowledge it has brought in new advertisers.

Todd Haskell, vp of business development at the New York Times Company, sees the system as a stepping stone to building bigger and better direct relationships with the new clients.

He says: "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."

The test finishes at the end of next month, at which point the newspapers and Google will decide the way forward, not least how the search company plans to make money from the venture.

Once it is open to all-comers, Google intends take a cut of the advertising revenue. Whether it is the same 20% it takes for placing web ads remains to be negotiated.

Data sourced from Washington Post Online; additional information by WARC staff