Google is using its hugely successful online ad system to let its advertisers target ads to run in newspapers and over the radio in specific markets. Meanwhile, auction site eBay is building a pilot online exchange for the buying and selling of cable TV ad time.
The hopes are that more advertisers will have access to the traditional ad markets, media outlets will boost their ad profits, and Web-based technology will streamline a business where faxes, FedEx packages and phone calls still predominate.
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Most primetime ad space--known as inventory in industry parlance--is sold months in advance. However, television and radio stations are often left with unsold inventory that Google and other Web-based systems allow the stations to sell at the last minute.
"One thing they all have in common is they have figured out how to use the Internet to manage the supply chain of unsold inventory at the local level," said Mike Boggs, national sales director at Rainmakers International, an ad agency that serves national and local radio and television markets.
"Three years ago, a guy like me wouldn't have been able to sell unsold inventory at the local level because we would have had to call every station," he said. "Now, we can buy inventory at the last minute in specific cities and do it efficiently."
Enabling online ad buying for traditional advertising like print and radio over Web-based exchanges and networks will not only offer a way for media outlets to get rid of unsold inventory but also bring prices down to affordable levels for smaller companies that have been priced out of the market, experts said.
"Everything Google stands for is just monetizing inventory, whether it's online or the audio side," Boggs said. "My hope is they'll be able to do the same thing on the local TV side, particularly cable. It's a tough market for us to penetrate and it's overpriced. Buying CNN at the local level isn't affordable."
Google tests the waters
As usual, Google is making the biggest waves in the industry. The search giant has tested the waters with trial sales of and announced plans in November to run a test involving more than 100 advertisers and more than 60 newspapers.
The company last year, its automated advertising system for radio. Now working with 700 stations in 200 metro markets and an unspecified number of advertisers, the service integrates technology from .
Google is in talks with CBS on a deal that could see it selling ads to run on CBS-owned radio stations and distributing CBS content, asaid last week. Google has declined to comment on the report.
Google also is eyeballing outdoor display and billboard advertising, according to a research report Bear Stearns analyst Robert Peck issued on Tuesday that links to a recent patent filing by Google. Asked about that filing, a Google spokesman said: "We file patent applications on a variety of ideas that our employees come up with. Some of those ideas later mature into real products or services, some don't. Prospective product announcements should not necessarily be inferred from our patent applications."
Industry insiders expect Google to move into the television market. And why not?
"We've got an efficient marketplace, hundreds of thousands of advertisers who are all looking for additional reach that is cost-effective," said Richard Holden, a director of product management for Google's advertising business. "The philosophy in terms of our large marketplace of advertisers, the efficiency and our toolset can be extended to a lot of different ad markets."
Google provides a bridge for small and medium-size businesses that have never advertised beyond the Internet to reach publishers and broadcasters whose sales teams are typically devoted to the big ad budgets of the biggest brands.
Job ads in Utah
Domain name provider Register.com ran ads in Utah's The Deseret Morning News and The Salt Lake Tribune as part of Google's newspaper test, said Craig Cooperman, director of acquisition marketing at Register.com. The ads targeted job seekers and included phone numbers and Web addresses that enabled Register.com to track how well the ads performed, he said.
Google offers the flexibility for advertisers to shift ad campaigns to new markets and to move them within different sections of the newspapers, as well as manage the newspaper ad campaign in conjunction with its search ad campaigns, Cooperman said.
The Register.com newspaper ads were purchased with the help of search marketer Did-It, which also is helping customers buy radio ads through Google. "Google provided significant price discounts, which made it a no-brainer," Did-It Chief Executive Bill Wise said of his firm's participation in the Google Audio test. In addition to offering discounts to advertisers, Wise said he suspects Google is offering stations revenue guarantees as a way to grow its radio ad network, much like it did to create its online search ad network.