Surely the biggest news of the day will be Google's trial deal to sell ads in some of the largest metro dallies in the United States:
For Google, the test is an important step to the company’s audacious long-term goal: to build a single computer system through which advertisers can promote their products in any medium. For the newspaper industry, reeling from the loss of both readers and advertisers, this new system offers a curious bargain: the publishers can get much-needed revenue but in doing so they may well make Google — which is already the biggest seller of online advertising — even stronger.
Newspapers have long tried ways to develop standby advertisers willing to fill unused space at a discount. But the Google program is meant to appeal to small businesses and those in far-flung locations that cannot be easily serviced by local papers.
The list of tree-killers reads like the biggest of the big: Gannett, Hearst, The Washington Post Company, Tribune, and The New York Times Company.
While conventional wisdom says that newsprint's share of marketing dollars is inevitably declining, it's still large. From Google's standpoint, this product will give them an opportunity to expand the spend coming from their very large base of search-only and online-only advertisers; the companies for whom Google represents the point of control for marketing. We're talking about online retailers, small regional advertisers…organizations for whom the newspapers' only product offering has been in the classifieds.
This is where the newspapers see some upside: the ability to fill remnant inventory with relevant advertising without the additional work or headcount required to serve the advertiser. Right now, that space is going to house ads.
Should this be viewed as a sign of weakness on the part of the newspapers? The inevitable fallout of past strategic mistakes? Jeff "BuzzMachine" Jarvis thinks so:
[T]urning over ad sales to Google — strengthening Google over their own brands, as Hansell’s story points out — only reveals the bankruptcy of their own strategies and soon businesses. Oh, if I were running a newspaper (fat chance), I’d probably sign on, too, because there’s little time and less choice. But it is only an indication of what Google can do and newspapers can’t.
A harsh read, perhaps, but I think it takes into account the future conflict this deal might portend. Right now, Google's selling this as a way for them to reach advertisers newspapers can't. But what happens when Google has all the pieces in place for a major brand advertiser? When they can offer, say, Ford, the ability to launch, track, and manage targeted text, audio, and video, both online and in their more traditional settings (print, radio, broadcast and cable)? That's precisely the kind of advertiser today's media companies (let's call them "Big Content") have grown fat and happy serving. What will these same newspaper companies do when Google (and/or Yahoo!, and/or Microsoft, etc) turns them into just another self-serve channel to be flipped on and off in a national or global advertiser's campaign management console?
The major newspapers have put themselves in a no-man's land of 21st century media: too big to serve local businesses, too small the be national or global marketing partners, and too slow to adapt to the way advertisers want to work.
Tags: Google, newspapers, advertising