Google breaks down and decides to advertise

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The fierce battle for the $32 billion local-classified market has forced Google to brandish the one marketing weapon it has so carefully avoided: advertising.

The search giant, which has built its brand through word-of-mouth and a powerful product rather than paid media, has begun testing radio and print ads for Google Local, a year-old engine for neighborhood listings that's been suffering from low awareness.

If successful, the test ads, created by Miami hotshop Crispin Porter & Bogusky and now running in Kansas City, Mo., could be expanded into a broader campaign designed to beat down its competition for the vast trove of online ad dollars that include its online nemesis Yahoo and more traditional mainstays like the local Yellow Pages and newspapers.

The change in marketing tack is yet another sign of how hot the struggle for local search has become. The stakes are high too, given the Internet's potential to win share from traditional local print classifieds, a $16 billion business, and the Yellow Pages, a $14 billion business. The online-classified market is already worth $1.7 billion, according to IAB estimates.

For Google, which just reported record ad revenue for the first quarter of 2005, local search is a huge potential growth market. "Amazing results don't continue unless you expand your markets," said David Hallerman, senior analyst at online market-research firm eMarketer. "Local is going to be big-how long it's going to be big is still up in the air. But when the biggest player starts advertising and hasn't advertised anything yet, that's a wake-up call."

While it's unclear how much of its massive marketing budget it spends in support of local search, Yahoo last October launched a national campaign for Yahoo Local that included integration into an episode of "The Apprentice." Both are trying to hack away at consumers' tendency to favor the Yellow Pages, despite technologically superior search-engine offerings like maps. A recent study by ComScore showed that online Yellow Page consumers spent between 5% and 17% more at local online vendors than consumers from search-engines.


Aimed at Internet users in the Kansas City area, the wry ads depict Google's local search product as being able to turn a little information into a lot. "You can put in a tiny piece of information and Google will take that and make the most of it. It's very smart and that's a lot of the essence of the Google brand." said Bill Wright, creative director at Crispin, the MDC Partners-backed shop that's quickly becoming a troubleshooter for Google. Last year, the agency was hired to create billboards near the marketer's California headquarters to support recruiting efforts.

Radio spots broke last week as small-space ads began appearing in the weekend section of The Kansas City Star. Also, full-page ads based on found photos debuted in the alternative weekly The Pitch. Google is also hiring street teams to hand out Google Local T-shirts, the first wave of an ongoing guerrilla marketing campaign that will blanket the city with the brand.

Whether the campaign is taken to other markets depends on how successful it is in driving traffic. Mr. Wright couldn't describe the traffic goals but he did say where Google Local is coming up short. "It has an awareness problem," he said. "[Web users] get to Google and they don't get any deeper."

Google’s test local ads could become part of a larger campaign

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