Google Print Error? Second Round of Offline Ad Auctions Dishearten
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Written By Reprise Media | March 27, 2006 | Share This
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Friday, Business Week ran a post-mortem analyzing the outcome of Google’s second foray last month into the world of magazine ad sales. Business Week calls the experiment, like last fall’s much more limited first test, a “fizzle,” but seems to think that it says more about the state of the print industry than about any shortcoming on Google’s part.
To summarize, Google’s network of advertisers was invited to bid, AdWords style, on ads of various size appearing in 30 different periodicals. The demand on the part of online advertisers was muted - possibly because of the comparatively unproven return on investment offered by print ads - and Google responded by extending the auction deadline. The thin field, in turn, at least partly contributed to what turned out to be low winning bids; as an example, Business Week cites CoffeeCup Software’s three $4,000 half-page ads in Martha Stewart Living - the usual going rate is just over $59,000. The undisclosed amount Google initially paid for the ad might have been lower than that, but it almost certainly wasn’t $55,000 lower.
For its part, Google claimed success in its stated goal of testing their print auction mechanism. And Google is more than rich enough to soak up many losses in the magnitude of 50,000 clams, but that isn’t the point. The advertisers drastically undercut the magazines’ standard ad prices, and most still felt that they didn’t get their money’s worth. As Business Week says, “…the weak performance may indicate that the true value of a page of print lags its list price - at least in the eyes of Google’s advertisers, who are used to high-return search engine campaigns.” It may soon dawn on traditional magazine advertisers that they’re vastly overpaying for their spaces, and that could spell bad news for many periodical publishers. Observes CoffeeCup CEO Nicholas Longo, “If at these rates it doesn’t work, it never will.”
Topics: Advertising: Offline |