Google has been testing newspaper ads since 2006. In early 2007, Google called this service a success and soon expanded it in July of 2007.

This news is not all that surprising, being that Google has recently cut video uploads, notebook, catalog search, dodgeball and Jaiku, plus jobs and offices due to the economic slow down.

Postscript from Greg: I exchanged emails with Google about the closure. Specifically I asked whether the shuttering of PrintAds reflected bearish thinking about traditional media in general and whether Radio Ads or TV Ads were implicated in any way.

Google said “no” — those two programs will continue and are not affected by the demise of Print Ads.

Armstrong, who is President, Advertising and Commerce for Google in North America, was speaking at the American Association of Advertising Agencies Media Conference in Orlando, Florida. Here’s the description of Armstrong’s session: Why Google Is Not Out to Disintermediate Agencies Google has the fifth highest market capitalization, after only nine years of existence. Tim Armstrong, Google’s North American president for advertising and commerce, will talk about the company’s plans for getting everywhere as soon as possible, and will try to convince a skeptical audience that Google will not disintermediate agencies.

What Armstrong outlined in the talk was a Google media buying and planning “dashboard.” According to MediaPost:

“It basically takes a mix of different media types and puts them together,” he said, adding that the system, which is still being developed, was part of a suite of new tools Google is building to make the lives of media buyers “easier.” The new dashboard, he said, would enable buyers to manage mixes of offline media like TV, radio and print campaigns, with their online display and search advertising, and to harness their data streams to show how one platform influences traffic to the others.

The deep level of ad-agency integration that this implies would presumably enable Google to capture a larger slice of the brand advertising pie. However, several factors might conspire against Google in this scenario:

• Agency fear and/or resistance

• Agency development of a competing system that accomplishes the same objectives
• The possibility that media buying cannot be automated to the degree Google assumes

Silicon Alley Insider also captures another level of potential resistance: “Google wants to be your media planner. And your research department. All functions that make up a big part of the giant ad conglomerates already.” In other words, these are bread and butter agency functions that bring in revenue.

Regardless, there’s a kind of “inexorable” logic to the Google cross-media dashboard. For the past several years, Google has envisioned itself as a more efficient way to buy media across the full range of advertising platforms and has very self-consciously been moving toward this goal.

PPC advertising has been trouncing traditional media due largely to the fact that efficiency and accountability are “built in.” The auction model (almost) guarantees that ad spending will be no higher than necessary to remain competitive. But it’s the built-in accountability – the ability to monitor and adjust for optimal ROI or ROAS – that makes PPC advertising the ad medium of choice for profit-hungry advertisers.

Recently I took a closer look at Google’s print, radio and TV advertising capabilities – and son of a gun – they’ve got auction and ROI-tracking built in, too! Here’s what I found:

Let’s start with the easiest one: print. Google’s Print Ads system lets you place display ads in thousands of newspapers nationwide. It isn’t, strictly speaking, auction-based. Here’s what Google says:

“Print Ads advertisers extend bids to newspapers, essentially naming a price for the insertions they want. The publisher then has the opportunity to accept or decline that price. Unlike an auction system, a publisher is able to accept multiple bids as desired.”

So while it’s not an auction, advertisers can set a maximum price they’re willing to pay. In the nicely-designed AdWords interface for managing Print campaigns, advertisers see the newspaper’s “listed rate,” and can choose to bid below that rate.

Reporting is primitive, but accountability is as easy as tracking print ad performance has always been: advertisers can include a custom url in each ad, or a custom toll-free number, for example.

Good documentation of the Google Print Ads system is available here.

Let’s move on to a trickier realm: Radio advertising (well-documented here). Google calls this Audio Ads, taking into consideration that ads will eventually be delivered via a variety of channels in addition to Radio – in podcasts, for example.

With Audio Ads, advertisers have the option to either reserve or bid on available radio air time. Bidding is risky, since audio ads will only be run if/when there are available open time slots, but this allows advertisers to buy bargain air time and control their costs.

Here’s where it gets interesting: Accountability is not only built into Audio Ads—it’s even better and more valuable than Google’s search and content advertising.

First, there’s an option for free call tracking. That’s right: the service that others offer at high prices is free and built into Audio Ads. Here’s Google’s description:

“With call reporting, we’ll assign you a tracking phone number and redirect all calls it receives to the phone number of your choosing (we recommend your main business line). Call reporting lets you track the total number, the cities of origin, and the date and time, of calls that are made to your assigned call reporting number.”

Once you’ve set up call reporting in your AdWords account, create an audio ad that references your assigned number. When a user phones the call reporting number mentioned in your audio ad, Google passes the call on to your regular business number and records the basic details of the call. Then, you can sign in to your account to view a full report of all the calls.”

This, my friends, is huge. It lets advertisers assess their ads’ ROI right down to the city, date and time. (Google: will you be offering this to AdWords Search and Content advertisers soon?)

Even better—Google supplies a big set of reports that can be run within the AdWords interface. I won’t get into the details, but you can get a good idea from this screen shot of the report types available under the new Audio Ad Reports tab:

Let’s move on to even more interesting (and potentially more powerful) territory: TV advertising. Google announced their TV ad beta testing in April, and has recently posted details at http://www.google.com/adwords/tvads.

Details are still a bit sketchy, but it’s clear that the TV advertising system will feature an auction format (bidding based on CPM—cost-per-impression), and… wait for it… performance metrics:

“Once your ad has aired, use Google’s reporting metrics to immediately understand the effectiveness of your ads. Google is now plugged into millions of set top boxes and we are measuring second-by-second viewership data across all dayparts. This valuable data will enable you to find out which ads are engaging your viewers.”

Here’s a screen capture from Google’s online demo:

These early forays into traditional advertising media have huge implications:

• Google is determined to shift all advertising to an AdWords system that introduces auction and accountability to an industry that has never known such pinpoint efficiency and accuracy.
• Traditional ad agencies will succeed or fail depending on whether they can intelligently employ these new capabilities—which requires them to understand and embrace auction systems, analytics and accountability.
• “New media” agencies that bill themselves as “Full service” will need to broaden their skill sets to include radio, TV and print—or decide to stick to their search/content niches.

So ad industry brethren: you’ve received your heads-up. Get hip or get left behind.

They have expanded their newspaper base from 50 papers now to 225 newspapers representing 32 of the top 35 DMAs and a combined circulation of almost 30 million, according to Google. Plus, Google has expanded the number of advertisers who can use print ads within AdWords.

How To Set Up Google Print Ads, that I wrote this morning at Search Engine Roundtable, shows how many advertisers are now seeing that they can set up print ads within their campaigns.

From the press release:

“We are always looking to extend our editorial products to new advertisers while also driving additional revenue to our business,” said Todd Haskell, vice president of business development, advertising, The New York Times. “Google Print Ads has brought in new advertisers who were either too small to consider advertising in a national newspaper or who hadn’t tried print advertising because their business was largely online. And Google Print Ads gives us the flexibility and control to set our own pricing, so there is never a conflict.”

“Over the past months, we have worked closely with our newspaper partners to design our Print Ads program to meet their needs and the needs of marketers,” said Eric Schmidt, Google’s chief executive officer. “Newspapers are an important source of information and a powerful communication tool. With Google Print Ads we will bring more advertisers to newspapers which will ultimately benefit readers, publishers and advertisers.”

Postscript from Greg: There’s an enormously ironic aspect to Google and Yahoo promoting the value of print newspapers and competing to establish newspaper relationships. Their news sites have been argued by some within the newspaper industry as being partly responsible for the decline in print newspaper subscriptions and for hurting the value of newspaper brands more generally. I go into this in further detail in a post on my blog Screenwerk.

On the print side, the article shares quotes from the New York Times claiming Google Print ads have “worked” and that they have generated “incremental revenue from an advertiser base that we don’t usually get revenue from.” The Seattle Times has told Advertising Age that they have “produced six-figure incremental ad revenue” from this program. Also, we have quotes from small business that have claimed the print ad tests have worked for them. One advertiser said “we are very pleased with the results” and that they “going to bump up the spend.”

On the radio side, the article has small business claiming Google Audio ads give him a “reassuring and comforting feeling to have a system so efficient and easy.” This allows him to feel more willing to participate in radio ads. But on the publisher side, radio stations are “scared to death” of Google.

Overall, he said the test showed “potential” for the program. To view his ad, see this PDF and look at the lower right hand side of the Chicago Tribune page, the Chef ad.

The success of Google’s efforts to persuade Mr. Cohen and his counterparts [Google AdWords Advertisers] to shift more ad dollars to its new offerings are crucial to the company’s success in expanding beyond advertising linked to Web-search results. It’s not just big marketers who need to be persuaded — the company will be focusing a good part of its attention on the small- and medium-size businesses that represent the bulk of its ranks of current advertisers

And for some specific feedback from those the Wall Street Journal interviewed:

“If it’s complicated, I won’t be involved,” says Dennis Soltis, owner and CEO of grill parts supplier Barbecue Renew Inc. in Destin, Fla.

Some bigger advertisers especially like the idea that Google can help them track the effectiveness of not only ads on the Web but in traditional media.

Google’s efforts generally have “added a whole level of science to the marketing decisions you make as a CMO,” says Gemstar-TV Guide’s Mr. Cohen. But he views Google’s new offerings in radio as a way to fill out a brand’s overall radio-ad buying rather than a venue for the core ad purchase.

Here is a copy of the email Google sent him:

“Congratulations! Your ad has been selected to run in Google’s print advertising test.

Attached is a list of newspapers, sections, and scheduled run dates for your ad, as well as a sample tearsheet displaying your ad. We determined where your ad would be placed by including it in a content bundle specifically relevant to your products or services.

Please note that some of the placements listed have not yet been confirmed by the newspapers and that your ad may appear in other publications in the near future. You may receive other confirmation emails such as this one.”

I wonder what his ad looked like. Jeremy, can you post the PDF of your ad?