Will Ad Auctions Work Offline?

Some Chicago Sun-Times readers were surprised when they saw Google-like ads in their newspaper earlier this year. Those were Google-placed ads, displayed in the same format as AdWords ads are online. In a limited test with the Sun-Times and certain advertisers, Google made placements for its AdSense advertisers in the newspaper.

Then, Google said this month that advertisers could bid on ads in certain magazines, including Martha Stewart Living and Car and Driver, via an auction system just like its AdWords keywords bidding program.

One AdWords advertiser who worked with Google on the Sun-Times test said it paid off. MPI Home Video saw a 30 percent to 40 percent increase in response on its Web site during the week its ad for the video game Super Bowl Shuffle ran, said Mike Zuccato, director of consumer marketing at MPI Home Video, Orland Park, IL.

“I would look at any kind of program they would make available,” he said. “I would test it out. If the numbers worked, I would do anything.”

Though some media planners and agencies say buying offline ad inventory via Google is a great new tool, others are cautious and say it may not work as well for advertisers trying to target certain markets. Print advertising is less about selling inventory — as Google's AdWords program is — than other forms of media such as radio and TV, media buyers note.

“What Google has been good at is organizing inventory, like radio” with its purchase of radio ad network dMarc, said Greg Smith, executive vice president, media insights, planning & analysis, at interactive agency Carat Fusion, New York. “That works for some elements of the inventory but doesn't work for everything.”

The magazine ad market often includes targeting trade publications that advertisers need to get in, as well as package deals with trade shows, publishers and other inventory.

“A lot of those are relationship buys as part of a larger relationship,” Smith said.

Scott Brunjes, president of Media Associates, which is involved in both offline media and search ad buying, says targeting the right audience is essential to offline media buys.

“I think really sophisticated marketers know that price is really the last thing we look at,” he said.

Still, Brunjes and others said the Google ad auction model may translate well into offline ad markets.

“The auction model is innovative and, if applied correctly, could change the way ads are bought and sold, in a myriad of media,” said Fredrick Marckini, CEO of search and performance marketing firm iProspect, Watertown, MA. “While many old-line folks are concerned, I think the auction model will drive up their revenue.”

Advertisers seeking new audiences and those interested in buying across large inventories may respond well to the auction system.

“To do business with entirely new categories of advertisers is something that's exciting [for print publications],” said Robert Runett, director of electronic media communications for the Newspaper Association of America, Vienna, VA.

Small advertisers unable to get ads in certain publications in the past now may be able to, Runett said. For example, a technology company that buys mainly online advertising might reach a larger audience via print.

Publishers should welcome the chance to work with new advertisers and vice versa, said Jeff Hinz, senior vice president of client services at direct response media company ID Media, New York.

“The fact that I can now get into print and affect my clients' return on investment is a great opportunity,” he said. “In the past, publishers controlled all the inventory and were providing limited opportunity for clients to meet their objectives and show success.”

Another benefit to advertisers working with Google is the engine's ability to track campaign performance and return on investment.

“We know how many clicks, and what the conversion rate is,” Brunjes said. “With traditional media, even at the best possible price, you just don't have that kind of feedback.”

It is unclear whether other search engines will follow Google into the offline ad realm. Yahoo has not entered the market, but it's not out of the question.

“We are always evaluating new opportunities to connect our advertisers with interested consumers,” a Yahoo rep said.

Christine Blank covers online marketing and advertising, including e-mail marketing and paid search, for DM News and DMNews.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters

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