The king of search already revolutionized the Web with pay-per-click. Now it's reselling ad space in print magazines. Are we entering a brave new world for print advertising?Google Inc., widely considered to be the most powerful search engine and ubiquitous brand on the Internet, is quietly testing a new advertising strategy on an unexpected medium: paper.
The search powerhouse makes 99 percent of its revenue from selling Internet ads. But according to Google and executives at companies that buy advertising from them, the search engine company recently bought full-page ads in at least two technology magazines and resold parts of those pages to small advertisers that belong to its online ad program, known as AdWords.
The full-page ads appear in tech-centric publications PC Magazine and Maximum PC magazine. The pages are divided among several companies, each of which has one-quarter or one-fifth of the page in which to advertise. (Full disclosure: Publish.com is owned by Ziff Davis Media, which also owns PC Magazine.)
"Google is testing a program to place ads from our advertising network into U.S. print publications," read a statement from the company. "This limited test is part of Google's continuing effort to develop new ways to provide effective and useful advertising to advertisers, publishers and users."
The company declined to say whether its foray into print ads will include general circulation magazines or newspapers.
According to executives at the companies who bought the ads, the print campaign is simply an extension of Google's successful AdWords program.
"We're an advertiser in their online program, and we've had a lot of success with that," said Gino Joukar, CEO of iDigitals, one of the advertising companies. "So we decided to go in with them on this endeavor as well. It was a no-brainer. A quarter-page ad in PC Magazine costs four times the amount we paid through Google."
The first ads will appear in PC Magazine in the Sept. 6 issue. The ads in Maximum PC magazine will appear in the Oct. 5 issue.
"This is about classified advertising, this is about Google's connection to hundreds of thousands of small businesses through their existing ad network and giving them access to a market they couldn't get into before," said Jason Young, president of Internet and consumer technology at Ziff Davis Media, which owns PC Magazine. "Think about the validation this gives the print media, that the biggest search engine and largest online marketing solution provider is saying print should be a part of what they offer their customers."
The publisher of Maximum PC magazine, Bernie Lanigan, denied that Google was reselling ads. "I don't think Google is selling ads or reselling ads," he said.
Neither company would comment on Google's long-term ad strategy with their print publications.
Google searches for a foothold in the IM market. Click here to read more.
With this new advertising, Google is one step closer to being a multimodal middleman for ad sales, whether online or off. The print ads allow them to take advantage of their large network of small businesses that already advertise with the company.
"In the end, they're developing contacts among advertisers," said Danny Sullivan, editor of searchenginewatch.com. "And, they already have advertisers who have worked with them before and trust them. They've got the small advertisers and I think they see the dollars there."
Sullivan was one of the first media watchers last year to tentatively predict that Google would make some kind of leap into print ads.
Next Page: Will Google's low ad rates change the advertising market?
The print ad campaign also marks the first time Google has made a significant product push offline.
"In the past, they've sometimes come under fire for being a kind of one-trick pony for only having ads online," Sullivan said. "This lets them move beyond that and become something more."
AHS Systems Inc., which sells a content management system called Rip CMS, purchased a one-quarter page ad in the Sept. 6 issue of PC Magazine for about $2,000. Jeff Witkowski, CEO of AHS, said that comparable exposure through the AdWords program would be much more expensive.
PC Magazine reviews the Google Talk beta. Click here to read more.
According to their general advertising rates, PC Magazine does not sell ads of a similar size and cost. PC Magazine's lowest four-color ad rate is $23,090 for a one-third-page ad appearing in 22 issues.
The PC Magazine issue has one full page of ads. The Google brand does not appear anywhere on the page, but a line of fine print at the top says "Visit adsbygoogle.com/pcmag" and a line at the bottom says "Ads by Google."
Each individual ad contains one photograph or graphic and about 100 words of text. Each ad also carries the advertiser's URL. Five of the six ads also carry phone numbers, some of which are routed through Google for tracking purposes.
"They gave us the option to put our own 1-800 number up, but asked us if we'd mind if they tracked via their own 1-800 number," said Witkowski. "I'm sure if we called and asked them what kind of traffic we were getting they'd let us know, but we don't really need to do that. We track everything ourselves."
Over the last three years, Google has established itself as the king of online advertising. In 2002, it began selling keyword ads via a "cost by click" method, wherein advertisers pay Google when readers click on a contextual keyword ad that appears on Google's search pages.
Google later started syndicating those ads to third-party Web sites, and the success of that initiative earned the company over $3 billion in revenue last year. In 2004, Google began selling display ads.
Google sells $4 billion in stock. Click here to read more.
Google, which used to be purely a search engine, has diversified its products in recent years as it finds itself competing with Yahoo and others in the instant messaging, e-mail and portal business.
Google currently offers an e-mail service, online maps, a social networking service, news, groups, a desktop search toolbar, and an instant messaging client, among other services. The company is said to be developing an online payment service as well.
Some industry analysts expect Google to continue growing. Google expects to raise an additional $4 billion when it sells 14.2 million shares of stock later this year. That stock offering will add to the $2.9 billion in cash that Google has already raised.
