Insider Chatter by Donna Bogatin

I underscored Friday that Google’s mulit-billion dollar online AdWords machine is NOT inherently transferable to all media platforms, analyzing Google’s failure to sell radio advertising profitably. I also predicted that Google would pin its offline advertising hopes on television.

Google has confirmed my hypotheses today, in announcing its deal with Nielsen Company to add a “layer” of demographic data to set-top box activity tracked by Google: In heralding how a Nielsen product “improves Google’s measurement capabilities,” CEO Eric Schmidt acknowledges Google TV ads are NOT Google AdWords.

What’s more though, despite the new “enhanced by Nielsen” twist, Google TV ads remain a poor, distant cousin of their rich AdWords family.

Contrary to Google’s PR spin, and popular perception, an overlay of Nielsen data will not yield a seemingly magic “maximization of advertiser return” from Google TV ads.

The data that Nielsen will be giving Google is “representative television ratings panels.” In other words, extrapolations about national viewing habits created by using self-reported consumer usage information from a small sample of U.S. homes, out of the tens of millions of television viewing households.

Google is well aware of the persistent short-comings of its TV ads product. Mike Steib, product manager:

We want to help make TV advertising more effective and more relevant for advertisers…(BUT) When you talk about AdWords, there’s a person sitting there with a mouse and a computer that can go right to a Web site and give youi instant accountability. That doesn’t exist in television.

Nevertheless, the Google worldwide advertising domination fantasy is hard to repress: Google “expects” its TV ads to eventually boast the same type of “immediacy” as the Internet “backchannel.”

The Google offline advertising diversification track record does not support such a rosy forecast, however. 

Unfortunately for Google, a Googley long two years out of the Google-DMarc Broadcasting gate, Google has NOT succeeded in bringing its touted AdWords ”accountability” to “old-school” radio advertising. SEE: Radio Ads Stall: Google Pins Offline Advertising Hopes On TV

ALSO: Interop: Citrix XenSource Flys as Google Crashes and Google Confirms: Enterprise Apps is NO Microsoft Office Killer

CONTACT DONNA BOGATIN

No, Robert X. Cringely hasn’t “been asleep” while Nicholas Carr spins his “big switch” tales in preview of his next big book, waxing poetic about a sweet Apple and Google “rewiring of the world” in their images.

While Carr asserts he knows “precisely what the future of personal computing looks like,” Cringley undercuts Carr’s “simple” soliloquy on how and why Google and Apple are seemingly destined to change the world.

Cringley plays off of a quote of chief Googler Eric Schmidt to ’splain why Google and Apple are “strange bedfellows.”

I will play off of a quote by the same Google chief to explain why Google is also not destined to change the advertising world in its complete image.

In The Real Madison Ave: Before (and after) Google I discuss how, despite the current infatuation for all things Google SEARCH, Eric Schmidt and team will NOT be taking over Madison Avenue any time soon.

The Schmidt money quote, circa December 2006:

The long-term fantasy is we walk up to you and you give us, say $10 million and we’ll completely allocate it for you across different media and ad types.

The ad agency world was deemed to have been shaking in their boots at the time, Dave Morgan, Tacoda chairman, suggested, headlining “Agencies: Google has put a target on your back” and confirming, “there is clearly magic in Google’s business model.”

Three quarters later, however, the Googley financial magic continues to be 99% AdWords pure, and Tacoda is waving the AOL banner!

I have long underscored that Schimdt’s worldwide, online-offline advertising domination musings were indeed fantasy. WHY? Because despite Google’s oft stated claims, the AdWords “targeted, measurable” Google-centric, blind auction, advertisers bid-up-their-own-rates, multi-billion dollar money making self-serve Google machine is NOT inherently transferable to every single offline media platform.

NOW, Google itself is finally finessing its diversification tune and subtly acknowledging just how diffiicult it is to replicate the Google advertising magic offline.

Schmidt to Wall Street yesterday on how Google intends to keep GOOG fueled going forward:

We are working on expanding our breadth of ads offering with all sorts of new types of ads — gadget ads, video ads, others coming — and each of these initiatives gives advertisers new and interesting ways to build relationships with their customers.

So by building these deeper ad solutions, we really can deliver more value, especially in markets and industries where they’ve not really had these kinds of tools before. These are highly measurable and ROI driven campaigns and Sergey is going to talk a little bit more about this in terms of the steps we are taking in ads.

“Measurable” is the operative Google “value proposition,” the online competitive differentiator Mountain View was counting on to replicate its Web advertising domination offline.

Tim Armstrong, VP Ad Sales, on the rationale behind the Google buyout of dMarc Broadasting in January 2006:

Google is committed to exploring new ways to extend targeted, measurable advertising to other forms of media. We anticipate that this acquisition will bring new ad dollars and accountability to radio.

Despite Google’s “old college try,” however, almost two years later, Google has brought neither accountability NOR new ad dollars to radio.

Does Google “offer conversion tracking” for Audio Ads? Google asks and answers:

We don’t offer built-in tracking services for AudioAds.

Google nevertheless offers up handy ideas for markterers to do their own radio ad tracking, no matter who they buy their ads from! Unfortunately, for Google’s world ad domination ambitions, though, Google is only able to cite well-known, “old-school” proxy measures for direct ad tracking: Suvey customers, Provide coupons, Get a toll-free number…

The Google Audo Ads “value proposition” is so NON-COMPELLING, that the Googleplex has to give away radio advertising, big time, soliciting takers for its radio ad product by promising “sign-up and earn $2000 on your Google Audio Ads campaigns.” Coupled with its reimbursement of ad creation costs, Google is subsidizing advertiser radio ad “buys” to the tune of $2300.

Obviously, Google doesn’t like to talk about its radio advertising foray when it reports to Wall Street. Google is now pinning its diversification hopes on its TV ad trials:

The remarkable thing about television is, it’s surprising, but in fact of the offline advertising, it’s the one that’s closest to Internet level accountability and we feel we can bring much greater ROI type accountability to television advertising, much as we’ve done online…

I think TV ads could actually really be underappreciated in terms of our offline efforts. This is really one of the few places where you can bring the same type of Internet level accountability to offline advertising, so with search advertising, obviously our customers see real-time how their ads performed. The same thing is really true with the feedback mechanism that we get with set-top boxes. We are bringing the same level of granularity to the offline TV format.

Will Eric Schmidt soon ammend his media sales fantasy to read: The long-term fantasy is we walk up to you and you give us say $10 million and we’ll completely allocate it for you, online and on TV.

MORE: Microsoft Office Thunder to Blast Google Apps Cloud and Google Chokes with Postini: Billion Dollar Office Apps Giveaway

PLUS: Powerset vs. Google? NO! Amazon EC2 vs. the Googleplex and Click Forensics CEO: Click Fraud Hits 28% for Google AdSense, Yahoo Publisher Network

CONTACT DONNA BOGATIN

Mike Orren began the New Year at his Pegasus News blog by proudly declaring “we aren’t hyperlocal” and laying claim to a “panlocal” moniker instead. 

Orren even posted a New Year’s resolution for Pegasus, the online “local news and information service” he founded and leads: “In theory, panlocal should be a big business. We’ll be doing our damnedest to prove that in practice in the New Year.”

Orren did prove panlocal’s “big business” potential this year, to Fisher Communications; One week ago, the Seattle-based, NASDAQ traded, tradtional media company–owner/operator of 19 television stations and eight radio stations in the Pacific Northwest–announced it acquired Pegasus to “expand its online local news strategy.”

Why is Fisher embarking on a new online media trajectory? Why did Fisher choose Dallas-based Pegasus to help fuel its new local news focus?

I spoke today with Rob Dunlop, SVP Emerging Media, Fisher Communications, to find out.

Dunlop leads the Fisher Interactive Network, of which Pegasus News is currently the key component.

Collen Brown, Fisher CEO, announced the company’s online AND local intentions to shareholders earlier in the year:

Launching new Internet businesses, repositioning and realigning our company for success and growth in the new media world. As consumers and advertisers shift their behavior in this digitally driven enviornment, it is expected that we become more innovative, responsive and competively daring, to better serve our customers’ needs and drive our future as a local media company.

Dunlop told me that the panlocal focus of Pegasus supports Fisher’s goal of reaching the local consumer that typically wants a view of “the marketplace as a whole” and not simply information on “my neighborhood only.”

The hyperlocal, user-focused approach employed by Backfence is too narrow to drive sustainable community involvement and of limited appeal to local advertisers, Dunlop indicated.

The broader interest of the Pegasus local media model is multi-faceted, Dunlop told me:

1) User Generated Content friendly, but not just User Generated Content,

2) Aggregation of news from Professional Content Partners,

3) Original editorial contributions, wth a point of view,

4) “The Daily You” customization of content presentation for readers…

What is the Pegasus News “secret sauce” then? The pooling and personalized filtering of a myriad of local, national and world information data sources that speak to the affinities of individual users within a broader, more universal context, Dunlop indicated.

Does Fisher have a “secret sauce” to monetize the Pegasus local news strategy? I asked Dunlop just that. After all, in announcing the sale of his company to Fisher, Orren acknowledged Pegasus “ran out of cash” months ago.

Dunlop told me Fisher envisages a three-prong business model for the monetization of Pegasus:

1) Targeted, local merchant advertising leveraging the local media sales know-how and clientele of Fisher’s TV and radio stations,

2) Traditional database marketing leveraging Pegasus’ relationships with its registered users,

3) Licensing of the new Fisher-Pegasus panlocal Internet media model to offer prosepctive partners “speed to market” entry into the online local news business.

Orren welcomed Fisher by saying Pegasus looks forward to “reaching more cities, towns and neighborhoods over the coming year.”

Will Fisher’s home base of Seattle be the first Pegasus roll-out city? Not necesarily, Dunlop told me. For now, Dunlop plans on being a “commuter” to Pegasus’ home base, Dallas. What’s more, Fisher CEO Brown is a former Dallas resident.

Do all the Fisher Communications connections with Dallas mean a new Texas television or radio property is in the works for the heretofore Pacific Nortrhwest focused Fisher? I asked Dunlop if the Fisher geographical diversification via online local media would lead to future geographical expansion in its traditional media operations.

While not getting state specific, Dunlop concurred that geographic expansion via radio and/or tv properties would not be inconsistent with the Fisher 2006 Strategic Plan targeting a diversification of its “geographic and network portfolio.”

Dunlop did confirm to me that but one week out of the acquisition gate, Fisher is already fielding expressions of interest in the Pegasus local media model from prospective partners; In other words, the licensing component of the Fisher-Pegasus business model appears to be bearing prospective fruits.

ALSO: Backfence.com and Google: Money Can’t Buy Local Love and Local Matters: Backfence Farewell NO Real Back Story

CONTACT DONNA BOGATIN

The Google Print Ads guys are a tenacious lot! Never mind that “newspapers’ ad sales show accelerating drop,” Google to the rescue.

Don’t stop the presses though, Google has been trying to piggyback on “dead tree” media for years: First magazines, then newspapers. Despite Google’s determination to spread the Googley gospel to the offline world, however, success has not been forthcoming.

Google today proudly announces that any and every AdWords customer can avail themsleves of “newspaper advertising made easy,” thanks to Google assuming the role of broker in the resale of non-premium newspaper ad inventory. Last month, Google made the same offer re non-premium radio spots.

Google has made no meaningful traction in either of the offline media though. Why would it?

Google touts that its years long efforts to diversify into print and radio advertising are finally nearing market turning points. They are not, however, despite the willingness of high-powered old media partners to offer up not so glowing testimonials on Google’s behalf.

Google has floundered in all its offline diversification efforts to date: Radio, print, TV…because its new media online value proposition is NOT transferrable to offline old media. Advertising is shifting online from off, for just that reason.

Despite the great Google mystique and the power of the Google brand, even the mighty Google can not simply stamp a ”revolutionary” label on an old school ad product like radio advertising and hope to make it new again in the eyes of advertisers.

In a Q & A with USA Today in May, Schmidt himself was unable to show how the magic that is AdWords will be matched by Google on the radio:

Q: The beauty of the online advertising model is that advertisers know whether or not an ad has been effective. They only have to pay if someone clicks on the ad. How can you bring relevancy to radio?

A: Advertisers can target the listener by driving them to a toll-free number or website address, and that should produce an uptick in the product demands.

Where is the touted accountabiltiy? What about pay only for performance? How about reaching buyers that are actively looking for the product?

NO, NO, NO. Google Audio Ads are NOT Google AdWords! Ditto Google Print Ads.

The Google AdWords targeting and performance assurance; concise, accurate and new media effective:

• Advertise to people searching on Google and our advertising network
• Reach people actively looking for information about your products and services online
• Easily control costs - pay only when people click on your ad

The Google Radio & Newspaper advertising targeting and performance assurances? NONE.

“Differentiate between sales driven by your radio campaign and sales driven by your existing keyword campaigns,” Google suggests. HOW? Via very old media, old world “soft” tracking style:

• Track visits to your website: Use a vanity URL as part of your call-to-action (such as www.yoursite.com/uniqueword). Make sure you don’t publicize the address anywhere else — this way, you can be certain the traffic you receive to the site is from people who heard your ad on the radio.
• Track the number of calls to a toll-free or vanity number: Make sure you don’t publicize the phone number anywhere else — this way, you can be certain the calls you receive are from people who heard your ad on the radio. Many vendors who can provide this service.
• Track visits or foot traffic to your store: Monitor changes in traffic levels . Informal or formal surveys of shoppers can help determine if their visit was influenced by your radio ad campaign.
• Track conversions using a unique offer or coupon code: Implement a unique offer code for users to enter when visiting your site, and offer a small incentive in return. Coupons and special offers can motivate customers to notice your ad, and purchase your services or products.

Who needs Google on the radio or in print if it does NOT replicate the ease of Google AdWords and AdSense reliability and trackability that has fueled Google’s $172 billion market cap.

Google may garner a small amount of existing AdWords customers that want to try out radio or newspapers, but Google is NOT on track to become the master of radio or print advertising.

Google remains very much a one-trick (rich) pony. SEE Google: Newspaper Ads More Trustworthy Than AdWords

ALSO: Google Facebook Hookup: Social Graph Privacy Minefield

CONTACT DONNA BOGATIN

Who says Internet radio is in a shambles? NOT Jennifer Lane, an Internet radio veteran and president of Katz Net Radio Sales.

I heard her make the case yesterday in New York City for why online radio is poised to exploit the “exploding digital media world” despite the current uncertainties regarding imending changes in royalty payment requirements for the use of music over the Internet.

Participating in a NYMIEG panel on the “Future of Radio,’ Lane underscored Katz’ belief that the estimated 70 million strong monthly Internet radio audience offers unique advertising opportunities for marketers:

Millions of Americans listen to Internet radio every day. Because they are listening at their computers, they can instantly react to an advertising message and get more information or make a purchase online.

Katz Net Radio Sales Commercial Internet Radio Network represents the largest network of independent Internet radio stations available to advertisers today (1000 plus, both braodcast and Internet-only stations); Stations offered stream over 15 million hours of listening per month to about 5 million unique listeners. The Katz Net Radio Sales network is built on a digital platform that designed for a high degree of accountability: Inegrated audience tracking, order placement, reporting and invoicing.

Katz Net Radio Sales sells advertising across its digital network of Internet station affiliates and says it provides “exact audience data measurement and impression measurement for every campaign.” Lane indicated CPMs in the $4-$9 range.

Joel Smernoff, President of Paltalk, also is bullish on Intertnet radio. Paltalk claims to be “the world’s largest live video chat community,” boasting 4 million plus members.

Prior to Paltalk, Smernoff helped create one of AOL’s first brand extensions, AOL for Small Business. At Paltlalk, Smernoff is evangelizing for Internet radio to embrace “social casting” via two-way in-chat room dialogues.

More than 12% of American adults are estimated to listen to Internet radio. Joel Smernoff of Paltalk and Jennifer Lane of Latz Net radio Sales are but two of the industry’s innovators seeking to further develop radio online.

ALSO: Bid4Spots CEO on eBay Radio Ad Sales Deal PLUS: Why Google MUST Buy Facebook: Universal Search Envy

CONTACT DONNA BOGATIN

Yahoo ads are getting personal. How about Google? CEO Eric Schimdt has a personal advertising “fantasy.”

Personalized radio advertising, as imagined by Schmidt one year ago: While driving past a clothing store, a radio ad should remind Eric that he needs a pair of pants and instruct him to turn left at the upcoming clothing store.

Where does Google stand on realizing Schmidt’s personalized advertising fantasy? Google JUST released its Google Audio Ads product out of “beta,” eighteen months after acquiring dMarc Broadcasting radio advertising technology platform. GPS location-based, highly targeted and personalized advertising via in-car radios next? Not likely, Google has its hands full trying for a little traction in the tried and true old-school radio advertising market place.

Google arch rival Yahoo IS making advertising personalization inroads, with the introduction of “SmartAds,” billed as a patent-pending ad delivery platofrm allowing marketers to present highly targeted online display ads in real time to match a user’s distinctive, expressed interests: 

Yahoo’s behavioral, demographic and geographic targeting capabilities aim to connect users with what they are looking for based on their distinctive, expressed interests. For example, if a user is browsing for hybrid cars in Yahoo! Autos and has selected San Francisco as their default location in Yahoo Weather, Yahoo’s SmartAds platform can assemble and deliver a display ad in real time that showcases a hybrid vehicle from a major auto brand, as well as local dealer information and current lease rates.

Advertisers and agencies design a single set of individual creative components, provide Yahoo with that artwork and a feed to their entire database of offers, then allow Yahoo’s SmartAds technology to automatically unique ad combinations based on those components; Advertisers and agencies target at scale while maintaining control over how brands are presented.

The Yahoo “turn one ad into thousands” pitch:

• Leverage user demographics and interests
• Automatically generate uniquely relevant offer-driven advertising
• Carry the personalized advertising experience from the ad to the landing page  
• Easier to reach and effectively address niche markets with specific, relevant messages
• Improved customer engagement and response
• Simplify the execution of micro-targeted online advertising

Yahoo brings not only scalable one-to-one marketing to the online display advertising table, but the “largest, most engaged audience on the Web” (as Terry Semel was fond of intoning) for advertisers to market to.

If Yahoo continues to roll-out value added, differerentiated advertising products, it CAN take an online advertising lead, even against Google.

ALSO: Local.com Patents? Google STILL Rules

CONTACT DONNA BOGATIN