It really shouldn’t surprise anybody who thinks a few minutes about it that Google believes it needs to move into print ad sales.
For all of the Internets stunning growth and advantages, print is still relatively strong, and newspapers tend to dominate local markets.
On the flip side, the efficiencies of online marketing will always make it a lot cheaper to advertiser online than in print. This means, Google’s revenue growth will eventually slow and there will be fewer opportunities for new growth markets. Since Google is GOOG, then its executives have a fiduciary responsibility to start scouting now for other areas of growth.
Google has established relationships with advertisers. It understands how to make ad buying more efficient. It has great technology and great minds to make great technology. So why not leverage those advantages in other media? Google has the power and reach to turn ad buying into just another commodity.
The print ad buy as a commodity will drive prices down, which on a per-ad basis, decrease margins for print publications, but print should also gain in volume and, in theory, help with the bottom line.
Google entering print is less of a threat to newspapers than it is to traditional ad agencies — the middlemen of large ad buys. This New York Times piece talks about frayed nerves on Madison Avenue.
Of course, Google isn’t the only player in the bid to streamline ad buying. Read the whole thing, as they say.