Advertising ROI: Google Changes the Game – “Pay-for-Listing” to a “Pay-for-Performance”

CEO Eric Schmidt: “I have this fantasy that goes like this. You are the C.E.O. of a large company, and I come to you and say, ‘Give me $1 million and give me your Web site, and we will guarantee you will get $100 million in sales.’ Which C.E.O. would turn that down?” from paidcontent
Google continues to push the advertising ROI envelope. This time it’s the classifieds:
Classified Intelligence Editorial Director Jim Townsend told internetnews.com that making classified ads available through an organic Google search would definitely change the game, but exactly how remains to be determined.
There are two schools of thought, he said. On the one hand, search provided additional distribution of the ad.
“If someone pays to place an ad in a newspaper, wouldn’t it make sense to throw that paper on as many streets as possible? It’s distribution, distribution, distribution,” he said.
On other side of that coin, Townsend said, ads that are freely available through search could destroy the pricing model used by print and online classifieds publishers.
Adds John Zappe from Classified Intelligence:
“Commercial classifieds sites such as CareerBuilder, Cars.com and others have to weigh the additional audience Google could deliver against the potential loss of revenue. Analysts, including us, predict that advertisers will move to free sites if they become convinced that they will reach an audience as large – or larger – on a search engine than on a paid advertising site.”

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