Editorial: An opportunity for publishers

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Google last year spent a piddling $997,300 on magazine ads, according to TNS Media Intelligence. How come so many publishers are petrified by Google's new "test" of magazine ad brokering? Because they should be.

A good scare is exactly what's needed in the hidebound publishing world, which hasn't much changed since the Magazine Publishers of America opened for business (1919) and Michael's opened for lunch (roughly the same year, it seems).

Google's plan is simple: Strike deals to buy pages in titles such as Ziff Davis' PC Magazine and effectively resell space as fractional-page ads to Google's online ad customers. Clients pay a flat fee; each ad has a call to action with a Web address and toll-free telephone number. Clients may choose a special toll-free number so Google can track responses.

The challenge is clear: Google upended online advertising by selling keywords directly to advertisers in an efficient auction system. Advertisers pay per click; Google gets paid for performance. That made Google the No. 2 media company in market cap and No. 23 in U.S. media revenue-bigger than U.S. media revenue of Meredith, Reader's Digest and McGraw-Hill.

Now Google is brimming with new ideas for an old medium. In the short term, magazines could go along, banking easy incremental money. In the long term, publishers risk disintermediation-the dis of death if Google gets scale, goes directly to advertisers and offers the pay for play that marketers crave.

The old magazine model is busted. Since the so-called recovery began three years ago, publishers have whacked 9% of employees; the business is shrinking. Lost cause? No way. Magazines have valuable assets-brands, content, readership. Here's a clue: Google ogles magazines because it spots an opportunity.

Publishers have three choices: 1. Join with Google to figure out a model that works for magazines and advertisers (Google can take care of itself). 2. Fight back by out-innovating Google on print-advertising efficiency and accountability. 3. Ignore this and go to Michael's-while Google eats your lunch.

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