Google lends hand to retailer advertising

NEW YORK —In an effort to more effectively engage media, the public and business, Google held its first ever press day on Sept. 20 in New York at its Chelsea offices, to detail its vision of advertising’s future and the relationship of new media to business, including retail. Among its current projects, Google is working on methods of supplementing traditional retail promotional circulars in a manner that promotes the true breadth of assortment as it exists in stores and, frequently in an expanded version, online.

In the rapidly approaching future, traditional advertising will act as an index or conduit to more narrowly focused and precisely targeted messages, said Tim Armstrong, president of advertising and commerce for Google North America, in response to a Retailing Today question. Already, a primitive form of what is to come is evident as the inclusion of Web addresses—frequently developed to correspond to a campaign—are placed in advertising of both the traditional and online sorts. Search engines are playing a role, too, bringing marketing messages and motivated consumers together more readily. Eventually, the whole process will be refined so that advertising campaigns designed to gain broad attention will be essentially built of customized messages and action links that will move consumers to a purchase decision point faster and more efficiently than ever before.

Viewed from an opposite perspective, advertisers will design campaigns to connect with motivated consumers through links and search engines that fit messages to specific preferences and demands, both in product and packaging terms. “You will look for targets and microtargets,” Armstrong said.

Over time, new media, including cell phones and Blackberrys, will be woven ever more firmly into the process.

At the same time it was holding its press day, Google introduced a new marketing vehicle, Google Gadget Ads, as an updated, interactive format that functions as a conduit in its own right. Gadget Ads is being expanded to a select group of Google’s AdWords advertisers to enable them to target audiences in a flexible and timely manner via regular updates within the ad unit and to permit users to engage with ad content in a more interactive manner.

Gadget Ads can incorporate real-time data feeds, images, videos and other kinds of content within the context of a single, overarching creative unit. Indeed, because the ads are designed along the same kinds of content lines as today’s online media, they are broadly appropriate and can work anywhere from traditional e-commerce sites to online communities such as MySpace.

While online advertising is an increasingly dynamic sector, its relationship with traditional advertising is something that is still being worked out. For example, Google has developed programs it once thought might replace old-fashioned, declining retail circulars. Yet, Google discovered that even if it could build a better mousetrap, retailers had seen better mousetraps before that didn’t quite work as well as the pitch that sold them.

Brett Goffin, vertical manager of retail, said Google came to realize that it needed vehicles that would complement existing sales structures and tap into existing support structures to extend the reach of online promotions. Next year, Goffin said, he intends to work on getting retailer vendors more involved in the retail advertising programs he is developing, demonstrating recognition of their critical role.

Yet, vendor or not, Google has been making progress toward developing those vehicles. An effort with traditional ROP newspaper advertiser Rooms to Go worked, said Goffin, because Google was able to talk some of the substance of the retailer’s established advertising and amend it effectively. “We didn’t want to recreate the wheel, but take it to our network,” he said.

In the campaign, Rooms to Go offered $100 off of a $1,000 purchase and Google helped the retailer target local inquiries regarding furniture based on IP addresses that helped get its message to the most likely purchasers. The result was a 7.5 to 1 return on investment. Additionally, 86% of the sales were executed in store, demonstrating that the promotion wasn’t effective just with delivery shoppers.

John McAteer, head of retail for Google, noted that studies come up with varied results, but indicate that consumers are spending anywhere from half as much to slightly more time online than they do watching television. While that’s a wide variance, what’s in less dispute is how advertising spending works out, with about 6% going to Internet advertising and 22% to television. He said both advertisers and media players such as Google have to work to update that, exploring how they can develop vehicles that reach consumers who are migrating to the Web for entertainment and information.