2008 Woodie Awards
Google's latest growth may be too much
Google ads to expand beyond the Internet
Peter Burke, Opinions Editor
Issue date: 11/14/06
Last Updated: 12/26/07
The latest two developments in Google's advertising strategy are what prompted me to write this article. Google is spending heavily to expand its radio and newspaper advertising capabilities, Reuters has reported. Clear Channel Communications, the biggest radio station operator in the country, is talking about selling and Google seems to be the prime candidate to buy. Google has been hiring sales people even before they own advertising capabilities in radio.
In the newspaper industry, Google will be using its Web-based advertising system to place print-advertisements in newspapers. Essentially, they will offer ad space in print newspapers to their online customer base. By using online databases, Google will allow an advertiser in New York to click on the name of a newspaper in California, see what ad space they have available and purchase that ad space.
These two new ventures seem like great innovation that can help two shrinking industries (newspaper and radio) until we look at the implications.
Google is effectively expanding from an online-only advertising service company to a service company that integrates online data into newspaper and radio. Google will be forced to change its "service first" ideal if it wants this latest expansion to be financially successful. There is a big difference between "pay-per-click" and "pay for a print ad or radio spot." The difference is quantifiable results. Online, advertisers only pay Google when customers click on an advertisement. In a newspaper or a radio ad, the advertiser has to pay for the space or time slot before they know if, and how many customers are approximately looking at or hearing the ads.
Without measurable results, Google has to sell the ad space without a safety net of guaranteed "clicks" for advertisers. Because of this, Google has to focus on the actual selling of ads rather than any services it is providing its customers. The stakes are higher because print and radio advertisers need to see results if they are to continue advertising and there is no guarantee that it will happen.
Google is not the "Evil Empire" yet, but as they expand into the business world, they are setting the groundwork to fall into the trap Microsoft fell in to. If what Google offers becomes too dependent on selling ad space before providing the actual result-based service, the company might become too profit-driven resulting in over-competitive practices of trying to crush the opposition, similar to what Microsoft did. If they are not careful, Google could easily become the next "Evil Empire."
In the newspaper industry, Google will be using its Web-based advertising system to place print-advertisements in newspapers. Essentially, they will offer ad space in print newspapers to their online customer base. By using online databases, Google will allow an advertiser in New York to click on the name of a newspaper in California, see what ad space they have available and purchase that ad space.
These two new ventures seem like great innovation that can help two shrinking industries (newspaper and radio) until we look at the implications.
Google is effectively expanding from an online-only advertising service company to a service company that integrates online data into newspaper and radio. Google will be forced to change its "service first" ideal if it wants this latest expansion to be financially successful. There is a big difference between "pay-per-click" and "pay for a print ad or radio spot." The difference is quantifiable results. Online, advertisers only pay Google when customers click on an advertisement. In a newspaper or a radio ad, the advertiser has to pay for the space or time slot before they know if, and how many customers are approximately looking at or hearing the ads.
Without measurable results, Google has to sell the ad space without a safety net of guaranteed "clicks" for advertisers. Because of this, Google has to focus on the actual selling of ads rather than any services it is providing its customers. The stakes are higher because print and radio advertisers need to see results if they are to continue advertising and there is no guarantee that it will happen.
Google is not the "Evil Empire" yet, but as they expand into the business world, they are setting the groundwork to fall into the trap Microsoft fell in to. If what Google offers becomes too dependent on selling ad space before providing the actual result-based service, the company might become too profit-driven resulting in over-competitive practices of trying to crush the opposition, similar to what Microsoft did. If they are not careful, Google could easily become the next "Evil Empire."
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