Online advertising - Haymarket and Google

‘Is there money out there? Then go and get it.’

The advertisement director at Haymarket Publishing was giving a typically blunt command to a classified advertisement sales person working on one of its consumer magazines.

Classified advertising, like marketing, is a backwater zone for most publishers – its potential is neither fully understood nor exploited. At Haymarket, however, the classified sales person well understands that his income and job depend on his performance – at Haymarket, all advertising is treated like classified.

Classified is a tough and exciting business – like direct marketing. If performance is lacking you go bust and get fired. How’s that for excitement? And that brings us to a company that has combined the two disciplines of direct marketing and classified advertising to become the greatest success story in publishing history: Google.

In issue number 72 of Subscriptions Strategy, we look at how Google exploits its advertisers – and how we publishers can exploit Google to create highly effective headlines, concepts and copy. Oh – and build hot lists too.

How publishers view Google
When publishers discuss Google, they are mostly concerned with search engine optimisation and copyright issues. They see Google as a way of distributing and publicising their web offerings, or as a competitor. Those publishers are missing the point.

Because Google’s operation is digital and originates outside mainstream publishing, many publishers don’t realise that Google is a publisher just like themselves, and has pulled off the greatest classified advertising success story in history.

Luckily, we publishers can exploit that success for our own ends.

How Google got rich
The founders of Google became absurdly rich not just by inventing a different kind of search engine (others have done that and remain struggling) but also by exploiting the effectiveness and earnings potential of classified advertising. Any of the other search engines could have done the same, but didn’t. Likewise, any publisher could have done the same, but didn’t.

So what does Google do that others don’t?

It is both fascinating and puzzling to discover how novel Google’s approach is. Fascinating (to me, anyway) because it’s clear there are mountains of money to be earned through classified advertising – and puzzling because the majority of publishers just don’t get it.

Classified advertising sales
For those who don’t know, classified advertising sales (generally lineage and smaller ads bundled into subject categories) are usually consigned by traditional publishers to junior and ‘hard-nosed’ sales staff and managers. Classified is treated either as a training ground or somewhere to put people who can sell but don’t quite belong in the world of major advertising agencies and clients. When a new launch of a consumer title is announced, you won’t hear much talk of classified revenue. It’s just not seen as an important or mainstream field to work in.

The exception to the rule among big consumer publishers is the Guardian newspaper, where the managing director is appointed from a classified advertising background. Perhaps that is because the newspaper began as a regional publication in Manchester where classified advertising was always a major source of revenue. Whatever the reason, it’s why the Guardian makes so much money while other big media owners don’t.

The equivalent in the world of traditional advertising would be if the Independent newspaper began to carry lineage and other classified ads in the borders of editorial pages and developed editorial to match demand. The newspaper would suddenly break into enormous profit and overtake the Guardian. Instead, the Independent loses an estimated £10m a year.

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