BusinessWeeks’s Ben Elgin takes an in-depth look at what appears to be Google’s growing interest in the publication ad business in the new article: Can Google Go Glossy? It was just the other day that I blogged about numerous job openings in NYC to work selling, mananging, etc. with Google’s publication ad business that Sergey Brin says is an R&D experiment.
Elgin notes that it could be a tough “slog” for Google. Some new BusinessWeek research reports:
Sure, plenty of publishers are clamoring to snare ad dollars from Google. But a BusinessWeek analysis of Google’s pilot, including interviews with 10 advertisers and two publishers, indicates that advertisers haven’t warmed to the program so far. Only one of 10 advertisers interviewed by BusinessWeek said their print ad performed well enough to recoup the money it cost. And eight of the 10 were unhappy enough with the results that they say they’re unlikely to do further print advertising with Google. “The response was definitely less than we expected,” says Ken Chang, director of operations at Apex Security Solutions, a seller of networked security cameras, which purchased an ad through Google in PC Magazine’s Oct. 18 issue.
Elgin goes on to report that the poor results came even after “deep discounts in magazine ad rates.”
Some ad pages were sold by Google for as little as one-quarter of the listed ad rates at these magazines, according to information provided by participating advertisers.
Elgin also offers the story of TrimYourDebt.com, a company that had success with keyword ads who but after using Google’s print ads, “it found the approach far less profitable.”
Much more in the article including lots of numbers about what Google is paying for space.
Google is already getting some of the cheapest possible ad rates, according to two participating publishers. For instance, Google has purchased several one-page ads from PC Magazine for approximately $20,000 apiece, according to a source familiar with the transactions. That’s about one-quarter of the price listed on the magazine’s rate card — and below the level where PC Magazine makes a profit, says the source.
Even with such discounts, Google appears to be reselling ad spots without making money itself. For PC Magazine’s Oct. 18 issue, Google resold a one-page ad to seven advertisers. BusinessWeek reached four of those, who paid an average of $2,750. Assuming that average for all seven advertisers, Google generated $19,250 for the ad, leaving scant room for profits since its cost was about $20,000.