Google’s $1,605 Local Customer: What the Price of Attention Means for Media Sellers

(5 minute read time)

For years, local media companies have been told they are competing with Google for advertising dollars. A new report suggests they may also be competing with Google over a more fundamental question: Who owns the value of the local consumer?

According to a recent report from Proton, the Switzerland-based privacy technology company, the average U.S. Google user generates an estimated $1,605 per year in advertising value. Over a decade, that would amount to roughly $16,050 in market value attached to one person’s attention, search behavior, device usage and demographic profile.

The report, titled The Price of Free Google, analyzed more than 54,000 demographic profiles and applied real cost-per-click data from active advertising campaigns to estimate what advertisers are willing to pay to reach different kinds of users. The numbers do not represent the exact revenue Google receives from any individual. Rather, they estimate the value advertisers place on access to that person through Google’s auction system.

That distinction matters. But for local media salespeople and ad agency professionals, the larger point is hard to ignore: the ad market has become extraordinarily sophisticated at pricing individual attention. The question is whether local media is doing enough to price, package and defend the value of its own audiences.

The report found sharp differences between users. A 35- to 44-year-old man in Bozeman, Mont., without children, using a desktop computer and conducting high-value corporate searches, was estimated to generate nearly $17,929 in annual advertising value. By contrast, an 18- to 24-year-old father in Fort Smith, Ark., using an Android phone and conducting lower-value searches, was valued at about $31.

That is a 577-to-1 difference between two people using the same supposedly “free” service.

For Google, that disparity is the logic of the auction marketplace. For local media, it is a warning. Not all impressions are equal. Not all listeners, viewers, readers, commuters or site visitors carry the same value to an advertiser. Yet too many local media proposals still treat audience as a bulk commodity: rating points, spots, page views, traffic counts or generic reach.

Google does not sell that way. Google sells intent, profile, device, behavior, geography and likelihood to buy.

Local media needs to sharpen its answer.

For radio, the lesson is not to apologize for being an audio medium in a digital advertising world. It is to show advertisers the specific consumer groups the station reaches better than anyone else: homeowners, auto intenders, bank switchers, restaurant-goers, home-improvement buyers, healthcare consumers and local service shoppers. A morning show audience is not simply “adults 25-54.” It may be a concentrated group of people driving to work, thinking about family decisions, household spending, home repairs, weekend plans and local purchases.

For television, the opportunity is to connect trusted local content with high-value consumer categories. Local news viewers are not just viewers. They may be homeowners, voters, medical decision-makers, insurance buyers, retirees managing wealth, or families preparing for large purchases. If Google can assign value based on user behavior and profile, local TV sellers should be assigning value based on audience quality, local influence and category relevance.

Cable faces a similar challenge and opportunity. Its strength has long been targeting, but that targeting must now be explained in business terms. A cable zone is not merely geography. It is a trading area. A neighborhood. A set of households with different income levels, lifestyles, interests and buying patterns. Local cable sellers should be helping advertisers understand which neighborhoods matter most and why.

Print and city magazines may have the most underappreciated story. A reader of a local business journal, community newspaper, alternative weekly or city regional magazine may be worth far more than a generic digital visitor because of income, civic engagement, local loyalty and purchasing power. The Proton report’s finding that desktop users can be significantly more valuable than Android users should be of particular interest to publishers. It suggests that context, device and consumer posture still matter. A reader engaged with local journalism may bring a different kind of value than a distracted mobile scroller.

Outdoor, too, has a role in this discussion. Google may dominate intent at the moment of search, but outdoor helps shape memory before the search happens. A consumer looking for a personal injury lawyer, orthopedic clinic, HVAC company or furniture store is more likely to click on a name already lodged in memory. That is where billboards, transit, posters and digital outdoor boards do real work. They create familiarity before the auction begins.

Digital sellers, meanwhile, should not allow Google to define the market entirely around clicks. Clicks are only one expression of value. Local advertisers also need awareness, recall, trust, store visits, reputation, brand preference and community presence. A click may capture demand, but media often creates it.

One of the most useful findings in the Proton report is that geography matters. The report identified Edmond, Okla.; Bozeman, Mont.; Naperville, Ill.; Santa Fe, N.M.; and Durham, N.C., among the most valuable U.S. ad markets in its analysis. At the lower end were West Valley City, Utah; Lowell, Mass.; Fort Smith, Ark.; Gulfport, Miss.; and Greensboro, N.C.

The exact rankings can be debated, and Proton has its own privacy-focused business interest in publishing the report. But the underlying point is important: local market value is not uniform. Advertiser demand, local competition, income, category mix and search behavior all influence what a consumer is worth.

That should be familiar territory for local media companies. A car dealer does not value every adult equally. A hospital does not value every household equally. A jeweler, bank, pest-control company, roofing contractor or personal injury lawyer is not buying “people.” They are buying access to certain kinds of people at certain moments in the buying cycle.

The problem is that Google often makes that value visible while local media often leaves it implied.

That is a sales problem, not just a research problem.

A local media seller should be able to walk into an advertiser’s office and say: “Here is what Google knows about your customer. Here is what we know about your customer. And here is why you should not let your entire marketing strategy depend on catching people only after they search.”

That argument is especially important in expensive local categories. Personal injury law, home services, healthcare, financial services, automotive, real estate and higher education are all categories where Google clicks can be costly. The more expensive the click, the more valuable pre-search awareness becomes.

If a consumer already knows the advertiser’s name, the search becomes easier to win. If the consumer has never heard of the advertiser, the advertiser is forced to compete in an auction where everyone looks similar and price often rises.

That is where radio, TV, cable, print, outdoor and local digital can reposition themselves. They are not merely alternatives to Google. They are ways to make Google work better. Strong local media builds recognition, credibility and preference before the consumer gets to the search bar.

The Proton report also found that certain characteristics influence ad value. Non-parents were estimated to be worth about 17% more on average. Desktop users were valued far higher than Android users. iPhone users also carried a higher value than Android users. Consumer value peaked between ages 35 and 44, then declined with age, although older Americans remained valuable in categories such as Medicare supplements, pharmaceuticals and financial products.

For local media sellers, these details point toward a more disciplined sales conversation. The pitch should not begin with inventory. It should begin with customer value.

Who is the advertiser trying to reach?
Which consumers are most profitable?
Which media reach those consumers efficiently?
Which media create trust before search?
Which media keep the advertiser’s name top-of-mind before a need arises?

These are better questions than, “How many spots do you want?” or “What is your digital budget?”

The larger implication is that local media must stop selling itself as media and start selling itself as access to valuable local consumers. Google has trained advertisers to think that consumer attention can be measured, priced and optimized. Local media should not resist that idea. It should meet it with better local evidence.

A radio station should know which retailers its listeners use.
A TV station should know which consumer categories its viewers over-index in.
A newspaper should know what its readers buy, where they shop and how they make local decisions.
An outdoor company should know which boards influence which trade areas.
A digital publisher should know the difference between empty traffic and meaningful local audience.

The Proton report frames the issue as a privacy story. That is fair. But for local advertising, it is also a value story.

If the average Google user is worth $1,605 a year in advertising value, then the local consumer is not cheap. The local homeowner, commuter, reader, viewer, listener, patient, shopper and business decision-maker all carry measurable economic value.

Google has built one of the world’s most powerful businesses by proving that point every second of every day.

Local media’s task is to prove it in its own market.

Source: Media Post