3 key questions for Google CEO Eric Schmidt

I therefore have questions for Google CEO Eric Schmidt aiming at clarifying the status of their publicized initiatives.

Schmidt encapsulated the company’s multi-billion dollar non-search advertising diversification strategy in a few broad statements. Below are Schimdt’s remarks to the press, as reported by Forbes.com:

Schmidt said that more than 1,000 people will ultimately work on Google’s efforts in radio advertising, which will someday sell radio ads over a modified version of its current AdWords placement service.

‘We’re trying to get a simplified AdWords interface where the advertiser gets multiple channels,’ Schmidt said. The idea: Let a marketer allocate an ad budget across multiple platforms, either in an automated manner or by targeting times and regions.

The initiative to put ads in newspapers, ongoing since January, now has almost 100 newspapers, Schmidt said.

Google is also quoted as saying it will have an “easy to use tool for advertisers to easily place ads on radio, newspapers, magazines, online video and Web pages.”

QUESTIONS FOR GOOGLE CEO ERIC SCHMIDT

Advertiser Friendly Ad-Placement Tool

1) Will you be simplifying the current AdWords self-serve auction-based ad placement tool?

Just this week I corresponded by blog with Google’s Matt Cutts on the complexity of the Google AdBuying system. Here is an excerpt from my post, “The Google riddle: “useful,” “organized” and impossible to comprehend”:

While Google puts forth that it strives to “organize the world’s information” so that it is “useful” and “accessible,” even Cutts becomes exasperated by the Pandora’s box that his company embodies. 

His post, predictably, brought on a deluge of comments seeking more clarification, more knowledge on the black box that is Google…

Google’s paying AdWords customers are also left in the Google black box dark.

Google’s cheery “Welcome to AdWords” marketing speak FAQ “Concerned about costs? Don't worry—AdWords puts you in complete control of your spending” does not put forth a realistic portrayal of the uncertain nature of the Google dynamic, competitive auction pricing system…

Can I see what my competitors are bidding?

No. We don't reveal individual data for any of our users. Remember that your bid alone doesn't dictate whether or not your ads will perform. We also take into account the quality of your keyword-targeted ads. If your keyword requires a higher maximum cost-per-click (CPC) in order to trigger ads, we'll let you know by moving your keyword to an 'inactive for search' state. We'll then list the minimum bid needed to activate your keyword…

Google Print Ads in Newspapers

2) Did you abandon Google Print tests last Spring?

The information available through Google Search on the Google newspaper advertising tests is a January 2006 “Chicago Business” article about its underwhelming stab at the market:

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.

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…

A Google spokesman declines to comment on Google's satisfaction with the test; the ads debuted on Dec. 9, and only 15 boxes 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 says.

In “Will Google ever build another billion dollar business” I discuss the lackluster results of its offline print ad diversification efforts:

In”Google’s print auction fizzles” last March, Business Week describes how Google’s attempt to bring the “accountability” of Google’s “targeted advertising” to print media failed to meet Google’s lofty expectations; “The search giant’s auction of magazine ad space didn’t generate much enthusiasm — or business, in the case of one successful bidder”:

Google’s effort to roll its advertising juggernaut beyond digital and into the world of print publications is struggling…

In February, Google auctioned off ad space it had purchased in about two dozen magazines, from Martha Stewart Living to Road & Track. The auction — the latest twist in a six-month experiment with buying and reselling print ads — was open to thousands of advertisers. However, Google was forced to extend the auction by several days to lure more buyers.

The tepid demand became evident in some of the winning bids, which were recognized earlier this month. Nicholas Longo, CEO of CoffeeCup Software, which makes tools for creating Web sites, wound up paying just $4,000 for each of three half-page ads in Martha Stewart Living. It was a long shot: The magazine’s rate card pegs the price of a half-page ad at more than $59,000. Neither Google nor Martha Stewart Living would say what Google originally paid for the space, but it didn’t get a similar discount…

Investors, who have bid up Google’s stock valuation to more than $100 billion, are expecting the company to successfully diversify its business. Google executives have often stated that they are seeking to expand Google’s online advertising stronghold into various offline media, including radio, print, and television ads. In addition to its efforts to broker the sale of print ads, Google in January, 2006, acquired dMarc Broadcasting, which facilitates the sale of radio advertising.

The lackluster appetite for its February auction is just the latest challenge for Google’s six-month foray into print ads. Late last year, Google conducted its first trial by purchasing and reselling ad space in a handful of magazines. Although the Internet giant lauded the trial’s outcome, a BusinessWeek analysis found that 8 of 10 participating advertisers were disappointed with the results and probably wouldn’t buy print ads through Google again.

Google has apparently abandoned its print diversification efforts which had been aimed at determining "where and how we might best bring value to print advertising”; its “AdSense for Paper” homepage has not been updated since April, following its failed initiative.

Google Radio Ads

3) How will you revolutionize the decades old radio industry via a  legacy radio advertising company ?

Google AdSense for Radio is no typical Google “test.” Google has a lot riding on its radio bet; $1.13 billion to be exact. Google owns dMarc Broadcasting, for better or worse. In “Google AdSense for Radio: Google diversification win?” I question “How disruptive will Google’s work with dMarc Broadcasting actually be”:

Google acquired dMarc because of its existing track record in the broadcast space. According to Google:

dMarc connects advertisers and agencies directly to radio stations with a robust advertising platform that automates everything from sales to scheduling, delivery and reports. This enables advertisers to, among others things, purchase and track their campaigns effectively — and significantly reduce the costs associated with processing broadcast ads.

According to dMarc, through its Scott Studios and Maestro automation systems, it is already working with "thousands of radio stations in the US and abroad."

Eric Schmidt, Google CEO, describes AdSense for Radio as “essentially the integration of the dMarc Console and management tools into our advertising network.”

Schmidt discussed the status of its dMarc acquisition during last week’s Q2 earnings conference call:

The dMarc team itself is fully integrated. We’re expanding it both in engineering and sales..They’re on an integration schedule of about three months from now, so every week there are more milestones, and they’re working very hard. It’s very exciting.

Google CEO Eric Schmidt will have another chance at bat in the coming weeks at the Q3 earnings conference call.