After circling each other as rivals, Google Inc. and more than 50 newspapers nationwide are set this week to launch a test program in which Google will find a home for its advertising overflow in newspapers.
Google, so successful that it doesn’t have room on the Internet to accommodate all of its advertising clients, has proposed redirecting those ads to the printed page.
Google will not take a cut of any revenue in the initial test phase of the program but will split revenue with newspapers if the program continues after its test run concludes in February.
The test program is emblematic of Google’s strength and represents a potential new, though modest, revenue stream for newspapers at a time when they are struggling to counter the broad-based migration of advertising to the Web. The program also would give newspapers access to a new community of advertisers.
The program, which Google is expected to announce today, will mark Google’s first wide-scale venture into the sale and placement of display advertising in newspapers.
“This is money that our advertisers would spend with us if we had the online inventory for them to spend it on,” said Tom Phillips, Google’s director of print advertising.
Publications including the Chicago Tribune, the New York Times and the Washington Post were among more than a dozen that participated in a small-scale test this fall.
The phase that begins this week will involve the sale of small ads that might take up as much as a quarter of a page in a large metropolitan newspaper. Newspapers participating include the Tribune, the New York Times, the Post, the Boston Globe, the Seattle Times and the Philadelphia Inquirer. The Los Angeles Times has also had discussions with Google about the project, said Dave Murphy, Times executive vice president and general manager.
The system will work similarly to Google’s AdSense, through which it sells advertising space on thousands of websites via online auctions. Typically, small businesses pay for these ads with credit cards.
Unlike AdSense, in which advertisers rarely exercise control over the placement of their ads, the newspaper program would enable advertisers to pick specific newspapers and even specific sections of papers. The publications may reject ads that don’t fit or do not meet standards of taste and can set prices on which advertisers may bid.
Even so, major elements of the Google system will persist. “This is a system in which advertisers will be bidding for space in the newspapers the way they bid for ads on the Web,” said Owen Youngman, the Chicago Tribune’s vice president of development.
Google Chief Executive Eric Schmidt has said the company is accelerating efforts to sell advertising in newspapers and magazines. Google already is moving into radio advertising. Early this year it purchased DMarc Broadcasting, which has an automated system for selling and placing advertisements on the radio.
Success in the newspaper effort is by no means guaranteed. An early Google effort to sell magazine advertising has faltered, but Schmidt said last month that Google was addressing the problems and was marketing its advertising services to nearly 100 magazines.
The program brings potential revenue to newspapers but also a certain risk. The publications hope to attract new advertisers that would not previously have touted their wares in print. But the new program might prompt established newspaper ad buyers -- big retailers, car companies and the like -- to request an online auction system that might undercut the industry’s current pricing.
Google’s ad clients, which sometimes have not spent their entire online budgets because Google lacked enough advertising opportunities, might forge their first ties with newspapers. It is believed that many of the advertisers that might use the program were too small for newspapers to handle efficiently.
“For the small ads that we expect, newspapers aren’t going to put advertising salespeople against that,” Youngman said. “You could go to every advertiser using AdSense and try to get them to buy advertising with your newspaper, but it would take too much manpower.”
For Google, a robust advertiser response would bring in new revenue. But such success also might highlight the power of print advertising when Google is doing its best to lure money away from “old media” and onto the Internet.
But Google’s Phillips is not worried about the competition. “I don’t think we have much to fear. We hope our advertisers become big newspaper advertisers. That would be a big success. We don’t think they’ll abandon online advertising, though,” he said.