GOOGLE is facing the greatest challenge yet to its might in Australia as two of its largest media customers threaten to pull their business over the internet company’s decision to enter the real estate listings market.
This is the opening paragraph of a story from the Sydney Morning Herald yesterday. The opening paragraph could easily have been: News Ltd and Fairfax face a tough challenge from the move by Google into real-estate advertising.
The SMH article raises the prospect of the publishers boycotting Google. Hmm, newsagents have suffered poor treatment at the hands of publishers many times over the years. I wonder how they would have reacted had newsagents boycotted them in an effort to resolve a dispute.
The Inquisitor also has a good report about this story.
Google, or the Internet more widely, has won the battle of advertising platform of choice for real-estate, motor vehicles and employment. This was won several years ago. Any action by newspapers today to block or slow the migration will be futile.
The AIM Group in the US, has recently published a report on the state of classified advertising there. The report includes the results of a poll claiming that nearly 6 out of every 10 real estate agents polled think newspaper advertising is useless. I’d note, however, that the US situation is quite different because of the entrenched position of craigslist, the (mainly) free online classified site. While craigslist is here, it is yet to gain the same traction it has in the US.
This is why newspapers and newsagents need to find traffic and revenue from non classified advertising sources. It is why I invested $750,000 in Find It a free online ad portal designed to drive traffic to newsagencies. I pulled the plug on Find It mid 2008 due to lack of engagement from newsagents and their associations.
Google is not facing a challenge. Newspapers face the challenge. By association, newsagents face the challenge. Newspaper publishers and newsagents show no sign of understanding this yet.