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Tribune, Google team to micro-target online advertising
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Taking the first step to gain a share in the rebounding online advertising market,
Los Angeles Times parent Tribune Co. has rolled out a cooperative deal with Google
Inc. to sell targeted messages keyed to specific stories on the paper's Web site.
The sponsored links, in which businesses pay to have their URLs appear when specific
search terms are typed in, are administered, sorted and maintained by Google.
Terms of the deal were not disclosed, but Tribune spokeswoman Christine Hennessey
said it included a "revenue sharing component."
The cost of the ads is based on the traffic sent to the ad by the link; advertisers
pay Google each time a user clicks on their link. Depending on demand, advertisers
can choose cost-per clicks ranging from 5 cents to $50 each, capping daily expenditures
at a predetermined number.
A percentage of the fees collected are passed along to Tribune.
The deal was put in place in December, and neither Hennessey nor Google spokesman
Mike Mayzel would assess the partnership's early successes. Hennessy said the sponsored
links are sold and managed by Google, not the Times.
Tribune's Interactive & Classifieds unit entered an agreement with Google for
Web search services and sponsored advertising links on 10 of Tribune's newspaper
Web sites, including Latimes.com.
One of the first to take advantage of the targeted advertising was Ray Boucher,
a partner at Kiesel Boucher & Larson LLP, whose ad popped up when L.A. Times
readers queried stories on the body parts scandal at the University of California,
Los Angeles.
Boucher wouldn't comment on how much he paid for his ads, which described his firm
as the "lead law firm representing families against the UCLA willed body program."
The Internet advertising market tanked in 2000 after a rapid run-up, and has recently
started to show signs of improvement.
A survey from the Interactive Advertising Bureau and PricewaterhouseCoopers found
the highest-ever quarterly revenue figure for online ad revenue in the 2003 fourth
quarter. They have tracked online ad data since 1996.
Online advertising revenue in the fourth quarter totaled $2.2 billion, with revenues
for all of 2003 estimated at $7.2 billion.
Revenue opportunities from local paid search advertising such as that being offered
by Google is considered the next big growth area, said Stu Ginsburg, a spokesman
with the Interactive Ad Bureau.
"Newspaper companies are trying different things with their Web sites in order to
make them profitable," said John Morton, president of media consulting firm Morton
Research Inc. of Silver Spring, Md.
"The best way to get them profitable is find advertising to pay for them, and a
lot have succeeded at this," said Morton, pointing to Knight Ridder Inc.'s digital
business unit.
It's difficult to gauge how many takers the Los Angeles Times has received since
it inked out its partnership with Google, and whether it might be catching on with
mom-and-pop advertisers that often find the cost of space in a newspaper's print
editions prohibitive.
"They become priced out of the regular newspaper, so ad rates are set in such a
way that they can get on the Interact," Morton said. "It's sort of analogous to
zoned editions where advertisers are offered lower prices for certain areas, and
applying the same principle to Web operations."
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