Google eyes new ad venues: Old media

On a recent conference call, Schmidt told Wall Street analysts that Google's focus this year is on applying its advertising skills to "different mediums."

He addressed such innovations as the new video store, the dMarc acquisition and new tools to bring Google search to mobile phones. He said 2006 offers a "unique and historic opportunity" to expand.

If Google can get its "fingers in the pot for every transaction," effectively becoming a broker between advertisers and media outlets, it can "really win," says Jeff Lanctot, general manager of Seattle-based interactive ad agency Avenue A/Razorfish, which represents clients such as Microsoft and Coors Beer. Advertisers are eager to bring the same targeted ads that work so well online to other media, Lanctot says. Then, they would not have to show an ad "to 100 people to reach the 10 who will find it compelling."

"TV stations can charge extra," he says, and advertisers would be willing to pay.

Competition won't roll over

Google didn't invent search-related advertising. Overture (now Yahoo Search Marketing) launched the technique. But Google's dominance as an Internet search engine enabled it to popularize the form.

Now, though, it is embarking on a battle with seasoned competitors. In old-line media such as radio and television, "There's no lack of people who are much more experienced," says Danny Sullivan, editor of the SearchEngineWatch online site. "They will fight Google hard."

Google is increasingly perceived as an 800-pound gorilla. Book publishers are suing Google over its plans to digitize out-of-print books. Many companies have sued Google citing trademark infringement relating to its online advertising practices.

As a companion to its corporate manifesto "to organize the world's information," Google now seems set on creating the biggest advertising platform in the world, says longtime media analyst Paul Kagan, of PK Worldmedia.

"For all of Google's tech talk, it is one big ad company," Kagan says.

Twenty-six publishers sold space to Google for its magazine advertising auction, which Google will re-sell, presumably at a profit.

Jeff Edman, president of PC World, says the format works well for the magazine because "some of those advertisers might come back and advertise again."

Magazine ads generally are sold either through agency relationships or directly to big clients based on a rate card, or a negotiated rate. Through the auction process, anyone can bid on placing a full-page ad in Martha Stewart Living with the ease of trying to score a deal on a used camera on eBay.

Interested advertisers fill out a simple form at Google's website. According to the online instructions, "You choose the ad size, set your price, and decide how you'd like to use the space. There's no risk to you - you pay only if you win the auction." Google promises to work with successful bidders "to fill your ad space effectively."

Google views it as a way to invigorate old media with thousands of new customers placing radio, print and TV campaigns at the click of a mouse.

Google's online advertising network initially was supported primarily by small businesses that hadn't advertised much. With Google's pay-as-you go method, they found an affordable medium.

That Google's search advertising AdWords program also works in an auction-style format. Advertisers bid on keyword terms - "Las Vegas lawyer" or "Boston bakery," for instance - and pay Google only when a Web surfer clicks on an ad. Rates have gone way up since Google's AdWords first started, but many campaigns can still be had for under 50 cents a click.

Google's online advertisers can create a campaign and see it on Google in minutes. Schmidt sees offering similar tools for radio spots to his customer base.

Instead of going to Google and crafting a 10-word ad, a budding entrepreneur would attach a cheap microphone to a PC, click a button, record a spot and upload it instantly to Google.

Schmidt muses about bringing radio advertising to the common man: "Wouldn't it be great if you could advertise your brand-new invention on the radio, for not much money, just to see if it works?"

Via Yahoo News