Tribune, Google Team to Micro-Target Online Advertising
By PAT MAIO
Staff Reporter
Taking the first step to gain a share in the rebounding online advertising market, Los Angeles Times parent Tribune Co. has rolled out a cooperative deal with Google Inc. to sell targeted messages keyed to specific stories on the paper’s Web site.
The sponsored links, in which businesses pay to have their URLs appear when specific search terms are typed in, are administered, sorted and maintained by Google.
Terms of the deal were not disclosed, but Tribune spokeswoman Christine Hennessey said it included a “revenue sharing component.”
The cost of the ads is based on the traffic sent to the ad by the link; advertisers pay Google each time a user clicks on their link. Depending on demand, advertisers can choose cost-per-clicks ranging from 5 cents to $50 each, capping daily expenditures at a predetermined number.
A percentage of the fees collected are passed along to Tribune.
The deal was put in place in December, and neither Hennessey nor Google spokesman Mike Mayzel would assess the partnership’s early successes. Hennessy said the sponsored links are sold and managed by Google, not the Times.
Tribune’s Interactive & Classifieds unit entered an agreement with Google for Web search services and sponsored advertising links on 10 of Tribune’s newspaper Web sites, including Latimes.com.
One of the first to take advantage of the targeted advertising was Ray Boucher, a partner at Kiesel Boucher & Larson LLP, whose ad popped up when L.A. Times readers queried stories on the body parts scandal at the University of California, Los Angeles.
Boucher wouldn’t comment on how much he paid for his ads, which described his firm as the “lead law firm representing families against the UCLA willed body program.”
The Internet advertising market tanked in 2000 after a rapid run-up, and has recently started to show signs of improvement.
A survey from the Interactive Advertising Bureau and PricewaterhouseCoopers found the highest-ever quarterly revenue figure for online ad revenue in the 2003 fourth quarter. They have tracked online ad data since 1996.
Online advertising revenue in the fourth quarter totaled $2.2 billion, with revenues for all of 2003 estimated at $7.2 billion.
Revenue opportunities from local paid search advertising such as that being offered by Google is considered the next big growth area, said Stu Ginsburg, a spokesman with the Interactive Ad Bureau.
“Newspaper companies are trying different things with their Web sites in order to make them profitable,” said John Morton, president of media consulting firm Morton Research Inc. of Silver Spring, Md.
“The best way to get them profitable is find advertising to pay for them, and a lot have succeeded at this,” said Morton, pointing to Knight Ridder Inc.’s digital business unit.
It’s difficult to gauge how many takers the Los Angeles Times has received since it inked out its partnership with Google, and whether it might be catching on with mom-and-pop advertisers that often find the cost of space in a newspaper’s print editions prohibitive.
“They become priced out of the regular newspaper, so ad rates are set in such a way that they can get on the Internet,” Morton said. “It’s sort of analogous to zoned editions where advertisers are offered lower prices for certain areas, and applying the same principle to Web operations.”
