The Wall Street Journal had a story yesterday about Google’s quiet shut-down of their efforts to automate radio advertising. This is unsurprising to me because Google, despite dominating the online ad market, is not really an advertising company.
Google search ads work really well because when you buy one, what you’re really buying is good placement in a popular search results page. This is a great deal for Google because all it needs to do in order to earn your money is have a lot of people searching on their engine.
But selling ads is a whole different animal. If I’m a publisher, and I’m selling ads, I need to convince someone that:
a) My audience is their audience
b) My audience is worth their money
And in addition to that, I need to make enough money with those ads that I can pay for the creation of my own content.
Google’s existing concept of advertising ignores all of this. It is based on a single concept: find out how to track when an ad leads to a sale or conversion, and charge only for the instances that lead to a sale or conversion.
It’s not an ad, it’s a link
Another big hurdle that Google has to overcome before it can move into other ad markets is this: a Google ad isn’t really an ad, it’s a link.
An advertisement is really a product in itself. It’s concepted, designed, illustrated, animated, branded…it’s an experience for the recipient. I know that Google is working on integrating different media into their search results (and therefore ads), but that’s still just step one in the process.
When you earn a click from a search ad, the only thing you’ve done is be in the right place. You have not convinced your audience of anything, you haven’t presented a story, you’re not sharing your vision. In short: you haven’t done anything to generate intent; that intent was there all along.
In short, Google peddles a different product. It understands links, not necessarily ads.
Google devalues ad property
Google is focused on the advertiser because that’s their customer. The advertiser gives Google money, and therefore Google strives to make them happy. And they should be very happy.
But the search-ad model doesn’t work for actual publishers, because it drives down the cost of advertising space unnecessarily. Want to know why it didn’t work in radio? Here’s the golden nugget, lifted form the WSJ piece:
Mr. Bender of Greater Media says he had been pushing Google for months to allow it to set minimum bids. Google’s auction system, he says, often sold ads for less than half the price that Greater Media could have gotten selling the spot on its own.
Mr. Bender says he complained to Google, which said it was sticking with its auction model and that prices would rise with demand. Mr. Bender says he cut back his dealings with Google, then ended the relationship when an advertiser tried to go around his station to buy cheaper spots through Google.
There’s only so much ad space on Greater Media. The right price is whatever Mr. Bender can get for it, not “the highest bid from an advertiser.” Those are vastly different numbers.
I think this works online, too. There’s only so much ad space on your web site. The right price is what you can get for it, not what some auction algorythm thinks it is.
Eat Sleep Publish is a Seattle-based blog that explores the difficulties and opportunities currently facing the publishing industry. 
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