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Google Set to Launch Advertising Partnership with Major US Newspapers and Magazines.

Google's plan to work closely with the largest US newspaper companies is the search giant's most intense effort to make partnerships with traditional media companies.

Previous attempts to add print advertising to Google's online platform have failed to impress advertisers, most of whom did not believe the system offered any advantage over the current method of buying ads direct from Tribune, Gannett, or the New York Times newspapers.

However, Google will try to improve the system, which aims to use its technology to place print advertising in its partner newspapers in the same way that search can be targeted.

According to plans published late last week, Google will work closely with the major newspapers in a three month trial period to extend its online advertising technology to all sectors of mass media.

Online advertising is the fastest-growing ad category, but the value of online advertising is still relatively small to the amounts spent in radio, newspapers, magazines and television.

After Google's acquisition last month of internet video site YouTube, the internet group is involved in high-level discussions with big media companies to try to strike deals to be allowed to use their video content online and to sell ads against it.

Some analysts said the newspaper industry's decision to work with Google could make it harder to impose rate rises. But others said the decision was unlikely to affect prices of premium content.

Peter Herschberg at Reprise media, said: "By introducing targeting criteria so successful in search to radio, print and television, Google may raise the floor on something that has not yet been valuable in newspaper advertising."

Google is expanding its lucrative Internet advertising network into the print world as a bold attempt to capture more traditional advertising dollars. The search king, which makes 99 percent of its revenue from Internet ads, is quietly testing the waters of print advertising sales, according to executives at several companies that have bought the ads. Google recently began buying ad pages in technology magazines, including PC Magazine and Maximum PC, and reselling those pages--cut into quarters or fifths--to small advertisers that already belong to its online ad network: Google AdWords.

The move is another significant step for Google toward becoming a one-stop shop for ad sales--whether online or offline. The trial also marks the first time the company has ventured offline with any advertising product.

"We were approached by Google two and a half months ago, telling us that they were starting this print advertising campaign," Michael Keen, president of Inksite, one of the five advertisers in PC Magazine, said Monday. "Because we had been one of their AdWords advertisers, they thought we would be a good candidate to try their new print advertising vehicle".

The print ads expand Google's efforts to become a middleman or media broker between advertisers and publishers. "Google has shown that big media companies don't have to be part of the mix at all," Hanlon said. "People can just get the content and ads directly from an uber-intermediary. That's caught a lot of traditional ad types off guard."

Inksite, which sells printer ink and toner, paid about $1,000 for a one-quarter page ad in the Sept. 6 issue of PC Magazine, Keen said. By comparison, a text ad in search results for "printer toner" might cost as much as $2.25 per click. The issue has a full page of Google-facilitated ads with the URL of an online version of the page at the top. Fine text also appears at the top saying "Ads by Google," and "Google advertisers offer these products and services" at the bottom. However, there is no Google logo.

Over the last four years, Google has established itself as the kingpin of online advertising, largely through its sales of tiny Pay Per Click advertisiements that appear alongside keyword search results. Google's "cost per click" system was built on selling keyword ads to the highest bidder and letting marketers pay only when Web surfers click on tiny text links. It was introduced in early 2002.

By also syndicating those ads to third-party Web sites and publishers, Google struck gold, and its revenue climbed to more than $3 billion last year. Concurrently click fraud and fraudulent click activity also skyrocketed and rather than reduce click fraud ratios, improve the integrity of the AdWords PPC system, and deliver more value to their online advertising base, Google has instead decided to reach out and deliver advertising in more mediums.

Google's latest move toward the print advertising business has some financial analysts frowning. "I would be surprised and somewhat disappointed if they were to spend a lot of money and resources on a print advertising unit," said Safa Rashtchy, senior Internet analyst at Piper Jaffray. "My guess is it is just an experiment."

"Google has shown that big media companies don't have to be part of the media mix at all."

Some internet marketing watchers see an upside in this latest move by Google, given that search ad sales could eventually peak.

"All the big talk today is how the inventory available for PPC (pay per click) ads is shrinking each day," Barry Schwartz, editor of Search Engine Roundtable, wrote in an e-mail. "So it does make sense for Google to look for ways to increase that inventory." Also as click fraud goes unresolved many Google advertisers are reining in PPC advertising efforts seeking more discovery and investigation as to increasing PPC expenditures and falling AdWords conversion rates.

Gartner analyst Allen Weiner noted that Google and Yahoo had approached shopper magazines in Europe about similar ads. "Hey, if these companies want to evolve to become full-service ad agencies, I think they'll be looking at print opportunities," Weiner said.

Despite mixed reactions from Google watchers, some online marketers said they are excited about the potential.

Bill Adler, chief executive of security software company CyberScrub, another of the Google advertisers in PC Magazine, said print ads are a welcome alternative to pay-for-click, which "tends to be somewhat up and down as far as effectiveness, for any number of reasons."

"I think this will give us an opportunity to showcase our products to a different audience and reinforce our branding," Adler said.

AHS Systems, a maker of Web-based content management software, paid $4,000 to $5,000 for its ad to appear in PC Magazine for two months, compared with the $3,000 that a typical ad that size would likely cost in the magazine for one month, said AHS Systems President Jeff Witkowski.

"It's a lot of exposure for cheap," he said, adding that Google is "doing a ton of tracking on this. They're using their own 1-800 numbers on this, and it forwards to our line." The Internet addresses of the online versions of the ads also redirect traffic through Google servers (*more redirects and cookies to track users are always a welcome obtrusion!).

Maximum PC's Oct. 5 edition also has a full page of Google ads. In addition, Inksite's Keen said Google ads were running in Mac Addict, but none could easily be found in the edition that went on sale last week. Keen suggested that Google may be experimenting with the idea of being an online advertising broker like Adauction.com. "Google might be able to bring some benefits and additioanl exposure to small advertisers where it is too cost-prohibitive for them to get into major print" Keen said.

"Google Print Advertising is certainly a departure from AdWords and Pay Per Click models, but it might turn out as a good thing for the newspaper industry."