Major Internet sites are showing a strong and growing interest in the advertising business, and traditional ad firms are starting to get worried.
Google has been leading the way, building on its online ad strength by striking deals to sell advertising in traditional media like newspapers and radio. Meanwhile, eBay is developing an ad-buying system for TV spots for a group of large advertisers like Wal-Mart. And recently, Yahoo announced a deal with 176 newspapers that did not include offline ad sales, although newspaper executives say it is hard to know.
Ad executives say it is hard to know where Google and the other Internet giants will stop. “The fox is in the henhouse and it’s going to gobble a good part of this business up before anybody realize they’re history,” said Gene DeWitt, president of DeWitt Media Solutions.
Traditional media companies are increasingly linking up with the online giants that have been stealing their customers and advertisers. The traditional companies—like newspapers, magazines and television and radio networks – are hoping they can reverse their fortunes and share in some of the Internet success. Meanwhile, the offline ad market provides the kind of growth opportunity that Internet companies like Google are looking for, stock analysts said.
Googel executives have make no secret of their ambitions in traditional ad sales, saying they can save marketers money on print, radio and TV spots, while taking a commission. Google is testing ad sales for more than 50 newspapers and plans to make newspaper ad sales a permanent offering sometime next year. Google plans to sell radio ads through the online auction system it uses to sell Internet ads. And it has indicated to analysts that it is considering moving into TV and direct-mail ads.
Customer brand companies have turned to advertising agencies for decade to design their ads and negotiate where and when those ads run. Media buyers at ad firms plan and negotiate ad placement with publication, TV, and radio stations and more recently, Web sites. Placing ads is big business for the media buyers at agencies.