We can all admit Google is good at what it does and usually good at what it sets out to do. Google is currently trying to tackle selling traditional media ads by offering print & radio ads. The catch is that they are selling these ads using their traditional auction based bidding model. As a marketer that knows a lot about advertising agencies I see some problems with this plan. Google’s whole methodology is on the market system, supply and demand drives prices which is great. The problem is that the demand has gotten great for Google Adwords for just about every keyword in existence. This demand has shortened supply and drove the prices of keywords through the roof.
Taking this situation into account, think about traditional media. If Google were able to command a large market share in selling Print and Radio ads (which I’m sure they will because they are Google) the same thing could potentially happen. Demand goes up, causing supply to go down and the prices for a Radio or Print ad skyrocket. Here’s my question. Why would advertisers and advertising agencies do this to themselves. With Google Adwords you have no choice but to bid on keywords if you want premium positions in the paid areas of Google. With Radio and Print you have an option. Just go direct to the source and buy what you want without bidding on it. The obvious advantage of going with Google is that you will be able to spread your ads out over multiple sources with one buy and hopefully better targeting; but will this benefit outweigh the disadvantage of driving prices up? Knowing the past, will advertisers and agencies willingly subject themselves to inevitably higher pricing by doing their media buying through Google? Only time will tell.
hey so now 2 years later would you say your predictions were spot on?
I don’t think they’ve done a particularly good job at putting a dent in traditional media sales…