Google Wants To Wear Prada

The bloggers behind Gawker.com will be report cited Google product management VP Jonathan Rosenberg as noting search ads reach consumers who are actively looking for a particular product, where an expensive print ad in Vanity Fair might not even be seen by people who are ready to spend on Prada. Rosenberg compared the two media outlets on cost. For 28 cents, a click-through Google ad sends a user to Prada who wants to buy a $1,000 handbag, where a magazine ad costs about 10 cents per reader and may not even influence a purchase, let alone deliver someone right to a point of sale online to make a purchase. With a circulation of 1.1 million, Rosenberg said in the article the Vanity Fair ad would price between $100,000 and $110,000 for a full-page ad. Those ads would have to deliver upwards of a hundred handbag buyers (depending on margins) just to break even on the ad's price. This is why online advertising has become a multi-billion dollar business, why Google has a market cap of about $120 billion, and why companies like Yahoo, Ask.com, and soon Microsoft have set up online advertising networks. David Utter is a staff writer for Murdok covering technology and business.