Google takes the P.. rint with online model for offline advertising
via Gary Stein
I’ve been a bit slow on the uptake about this one and hadn’t realised the potential of Google’s move into offline activity in terms of revenue generation. As Stein says:
Satellite maps are cool and all, but this is where you should pay
attention, when thinking about Google. This is development around the
way they make all their money.
Google makes 99% of its revenue from online advertising – $3billion last year . So what’s the deal? Even though online ad revenue is growing at a phenomenal rate it still only accounts for around 10% of all advertising. So Google is moving into print, trying to eek some of the huge potential revenue open to it and in the process pushing out the media agencies/buyers that make a living from deciding on appropriate advertising and planning ad campaigns.
How is it moving into print? One experiment with PC World saw it buy a page of advertising and then cut this up and in effect sub-let it to others:
The issue has a full page of Google-facilitated ads with the URL of an online version of the page
at the top. Fine text also appears at the top saying "Ads by Google,"
and "Google advertisers offer these products and services" at the
bottom. However, there is no Google logo.
So Google is leveraging the fact that product search online is key to advertising. People want to check out a product, compare it and get the best price online, yet awareness is often gained offline through the myriad of niche [and mainstream] publications. Why is this so important? Because people using the URL in the print advert can be measured – the "offline" URLs are redirected through Google servers. This is important. It allows Google to take their online business model into the offline world of brand advertising a move which is upsetting traditional media buyers.
The result is that publishing partners such as PC World would only get paid according to how many people "clicked through" no matter what "brand value" the advert had in raising awareness. It’s a model which is high in risk especially for publishing partners who would lose some of the ability to plan around revenue streams – as spots are often booked up 3-6+ months in advance. It could also change the nature of creative work to more product focused rather than brand focused benefits and values.
It’s potentially a major shake-up for the ad industry and marketing in general.