Web Behemoth Tests Newspaper Classifieds in Small-Scale Experiment

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CHICAGO (AdAge.com) -- Google, the new-media giant, now has a decidedly old-media partner: the Chicago Sun-Times.

In a quiet and small-scale experiment, Google is running classified-like ads in the pages of the Sun-Times, which so far is the only newspaper participating in the Web-search behemoth’s test.

Filling 'remnant space'
The deal, terms of which were not disclosed, allows Google to fill what’s known as “remnant space” in the Sun-Times -- unsold space where the paper would normally run in-house ads. Google fills those spots with its own ads. The Google connection is hardly trumpeted: “Ads by Google” appears at the top of each box of ads in very small type.

Google is best-known as an Internet search engine, of course, but nearly all of its revenue comes from ads. Through the first three quarters of 2005, the California-based company posted $4.2 billion in advertising revenue, up 96% from the year-earlier period. Most ads on Google’s site -- it began accepting advertising in 2000 -- are keyed to its users’ search terms.

Now, in the Sun-Times, Google is running ads in close proximity to relevant content. On Dec. 12, for instance, Google ads touting ticket brokers, White Sox apparel and Chicago Bears memorabilia ran in the Sports section.

A Google spokesman declined to comment on Google’s satisfaction with the test; the ads debuted on Dec. 9, and only 15 have run so far.

“This limited test is part of Google’s continuing effort to develop new ways to provide effective and useful advertising to advertisers, publishers and users,” the Google spokesman said.

Making money on unsold space
The benefits for the Sun-Times are obvious: making money on previously unsold ad space, even if that money comes from the biggest player in a business that’s undercutting old-line newspapers.

“We were eager to help them shut us down,” joked Sun-Times Publisher John Cruickshank. “They’re buying ads. We like that.”

Google won’t comment on its own motivations. But one observer speculates that if the experiment pans out, Google could seek newspaper partners in other cities to bolster sales of locally oriented classifieds.

Local reach
“Google doesn’t have the sort of local sales force that newspapers have,” said Jim Townsend, a principal at Classified Intelligence, a Florida-based classified ad industry consultancy. “Newspapers still have a more concentrated local reach.”

A spokeswoman for Orland Park-based MPI Home Video, whose Google ad for DVD copies of the Chicago Bears “Super Bowl Shuffle” video appeared in the Sun-Times, said Google invited the company to participate free in the test because its ad, which had been on Google for the previous 15 months, had drawn a high number of hits.

The spokeswoman said sales of the DVD increased about 50% after the print ad ran, although that figure may also have been boosted by the Bears’ successful season and a larger marketing push.

“We’re very happy with the response,” she said.

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Jeremy Mullman is a reporter for Crain’s Chicago Business.

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