Google To Buy Radio Advertising Firm

M3rk1n_Muffl3y writes "According to the BBC Google is buying US radio advertising firm dMarc Broadcasting for an upfront payment of $102m (£58m), rising to a possible $1.14bn by 2009. Interestingly it comes soon after Robert X. Cringely's prediction that Google will soon expand into targetted TV adverts. It looks we are finally beginning to see Google's transition to mainstream media."

Radio? When will generic-casting be dead?

I had to stop advertising on the radio last year -- it was declining returns. On my last (contractually required) run of ads, I paid over US$800 per customer earned. Considering I only profited about US$100 per year off of my average customer, radio was a dead form of advertising. This is on a 50,000 watt station in a major metropolitan area. My neighbors in business who kept their ads running this year only do so out of contractual obligation (5 year contracts offered almost 50% discounts). Almost everyone else still advertising on that station is the next batch of businesses ready to fail. The ad-sales people are that convincing.

Google is probably stupid to get into this business. I don't listen to the radio anymore, and I doubt many kids half my age do anymore either -- the iPod is that strong. The frequencies used for public broadcast radio seem wasted to me -- I'd rather see them deregulated and offered for another WiFi band. More WiFi means more access to streamed content as I need it. Hell, I stream MP3s to my PDA already via my Bluetooth-enabled EDGE-bandwidth cell phone (150kbps low latency all over Chicagoland).

So what does Google know that I don't? I'm sure a lot, but I can't see them being right in this situation. Maybe they're ahead of where radio will be in 10 years -- is it possible we'll see the large radio cartels end their regime, replaced with smaller stations all over the place? Could Google perform real time contextual advertising on 5000 watt stations, targeting listenes better?

Google's advertising engines don't work well on pages with too much variety it content. I see 50,000 watt stations having the same problem -- they're targeting too many different customers (and seemingly targeting them with the same generic content on 8 different stations).

How do Google's ads translate to those without sight? Radio only works as an audio mechanism, so Google's visible advertising campaign won't work here, either.

I can see Google's future in buying a company like Clear Channel -- they own most of the billboard advertising in Chicagoland, and they are also advertising in nightclub bathrooms and on the doors of toilets in office buildings. Google can find a way to digitize these ads. Is it possible that dMarc Broadcasting does more than radio (like Clear Channel)?

If it is just radio ads, I don't see it. Wasted bandwidth for a product that can't keep up with what the current customer base needs.

Re:Radio? When will generic-casting be dead?

My only thought is they are trying to diversify and bring some new experienced talent into their business. Since they are ad driven, this will probably lend itself to pushing into differnet markets. i don't really see where it is going, but i imagine they

Re:Radio? When will generic-casting be dead?

Actually, you make a very valid point (maybe without realizing it).

The radio ad-sales people are some of the best I've ever met -- in every market I've been in. Is Google buying up this aggressive sales company in order to accumulate the best sales minds and personalities to use to sell AdWords and other tools to advertisers?

If you can't hire them away, buy their bosses out.

Re:Radio? When will generic-casting be dead?

Actually I think its a great idea that Google is investing in advertising beyond the web. The advertising industry as a whole is in bad need of new ideas. I don't know how many more condescending and annoying car commercials I can stand. If Google can brin

Re:Radio? When will generic-casting be dead?

"Hell, I stream MP3s to my PDA already via my Bluetooth-enabled EDGE-bandwidth cell phone (150kbps low latency all over Chicagoland)."

Clearly, you're in touch with the same reality that all other US citizens inhabit.

Granted, not as many people listen

Re:Radio? When will generic-casting be dead?

It's still everywhere, and everyone has access to it. Believe it or not, even having a broadband connection at home puts you in the minority, buddy.

Of course I am. I don't want to get into my usual anti-copyright debate today, but copyright gives the cont

Re:Radio? When will generic-casting be dead?

Also a good point to note, is that with the advent of Satellite radio with no commercials, who's going to put up with radio for that much longer. If you listen to the radio more than 1 hour per day, it's probably worth it. At $15 per month, it comes out

AdSense

I was listening to an episode of This Week in Tech the other day and Leo kept mentioning someone's theory that Google's true goal is to get AdSense everywhere. This move just seems to back up that claim.

Re:AdSense

It's where they make all their money - they have to push it everywhere to be able to have enough income to fund their expansion into everything.

It'll be interesting to see if anyone is able to compete with adsense as it expands into other mediums.

LOL

"Google's transition to mainstream media"

No, we are seeing Google's transition to ALL media.

Think what you will of such things.

Ditto

To suggest that the internet isn't mainstream only means that someone is showing their age.

Watching the Nightly News is simply a chance for me to discuss the day's events with other people. I've already read all the 'big' stories of the day by 6/7 o'clock and I usually get more details to boot.

The newspaper does a bit better, as they can dedicate more space to details and they have much more local information, but even then, I'd still rather scan two or three online articles to get a variety of viewpoints.

Because of the internet, I get a much better idea of what's really going on.

Talking about google

Offtopic, but about google:

It looks like google opened op gtalk to the other public jabber networks. It's possible to talk server-to-server now!

afaik the Bitlbee team got the heads up [bitlbee.org].

targeting on the radio.....dot...dot...dot...

I read TFA, but im still not clear on how they plan on using the radio to target listeners in a way which would be different from the current advertising schemes. Obviously, when you search on google, they can use your query to deliver targeted relevant

Re:targeting on the radio.....dot...dot...dot...

The real "meat" of Google Ads is the auction system. By auctioning off airtime, they'll maximize revenues on off-peak hours and cut out highly paid salespeople.

Re:targeting on the radio.....dot...dot...dot...

It does make sense if you think about the fact that Google is probably accruing much better statistics about what people actually want (via Google Local searches) without having to rely on guestimations and shaky demographic statistics.

When Sam's Autobody

Google.. how long before.....

It gains the general mistrust and status of any other huge corporation. I love google, it's my gateway to the internet. I've always joked that Google==Research when doing assignments. I find it exciting and I really am happy for those involved in the immense success of Google, but on the other hand I can't help thinking that maybe it's getting too big now.

podcasting...

is my guess to the main reason, besides diversification of their services as to why they are doing this. podcasting is going to be here for awhile, it won't remain ad-free for very long. so they are getting into the market...

We noticed you like listening to NSYNC!

Click here to visit local "bathhouses" in your area!

Magazine Adverts were a No-Go

http://www.businessweek.com/magazine/content/05_50 /b3963130.htm [businessweek.com]

Google tried getting into the glossy advertising business and didn't do so well.

Google Inc. (GOOG ) this fall purchased about a dozen pages of ad space from niche publications such as PC Magazine and Budget Living. Google then divvied up the space and sold it in small pieces, often four to seven per page, to its network of several hundred thousand advertisers -- most of whom can't afford pricey magazine ads on their own. Now Google says the trial program, dubbed Google Publication Ads, is taking off, with hundreds of publications inquiring about it. The company is expanding the trial from four publications to scores of them, likely to include both niche and general interest titles.

However, a closer look at Google's foray into magazine ads suggests it could be in for a tough slog. Sure, plenty of publishers are clamoring to snare ad dollars from Google. But a BusinessWeek analysis of Google's pilot, including interviews with 10 advertisers and two publishers, indicates that advertisers haven't warmed to the program so far. Only one of 10 advertisers interviewed by BusinessWeek said their print ad performed well enough to recoup the money it cost. And eight of the 10 were unhappy enough with the results that they say they're unlikely to do further print advertising with Google.

Magazines are more than willing to sell advert space to Google, but if you RTFA I linked, few of the advertisers are finding it to be worth their money.

I suspect it is a matter of finding the right format before this takes off. Maybe Google needs to group complementary products together, or simply put fewer small ads per page.

Now the only thing on the radio dial will be

Google ads sandwiched by pay-to-play music and infotainment talk radio, sounds like a bad business model to me. But since they have tons of money to spend, what do they have to lose?

PS anything that says 'targeted' immediately brings up privacy concerns.

Package Deals. Not all AdSense ads are small biz

Anyone who spends enough money on Google ads can tell you the first name of their sales rep at Google. You know, the person who helps you fine tune for AdSense keywords, and offers you swell deals. How about if that person, who is already also helping you with localized ad placement through AdSense, could guarantee you some airtime in your local market, as well? Or, how about making sure that people sitting in their cubes at work listening to the radio and typing in some regionally interesting search term ("pizza delivery Sterling, VA") could be shown normal AdSense ads that, for the window of time that Joe's Pizza is running broadcast ads in that ZIP code, give extra weight to his AdSense ads for localized search?

Come on, folks, there's more to this than meets the eye. And don't forget the side-band stuff that handles traditional pager traffic, too. That can be used for all sorts of exotic ad-related things.

Good fit for Google

Actually dMarc is actually a good fit for Google. What dMarc's RevenueSuite [dmarcnetworks.com] does for commercial broadcasters is offer an automated way to fill unsold inventory. At the end of the day the Sales office at a radio station will close the ad logs, and the RevenueSuite software will schedule their client's ads into any unsold spaces in the logs.

There's no work for the station staff, and everyone makes a few extra bucks.

That's really not dissimilar to what Adsense does.

Google vs. Amazon...

Before continuing I should note that I was one of those who (incorrectly) predicted Amazon.Com's demise. Amazon was (is?) carrying $2 billion in junk bond debt. I could not see how they could ever crawl out of that hole. Clearly I was wrong. Looking at Amazon now I see four things:

1. A direct retailer of books, electronics and other products.

2. A software company that sells its software and infrastructure to support other vendors retailing.

3. An internet infrastructure company that can sell time on its computer network "farms" and bandwidth pipes.

4. A huge "bricks and mortar" distribution chain for books and other products. This distribution chain can also be "rented" in part to support other vendors.

When you compare Amazon and Google, you can see how weak Google really is. While Amazon is very much a software company, Google is rapidly becoming nothing more than an advertising/media company. However, the problem that Google has is that their business model is easily subject to attack by competitors. While Amazon has a difficult to replicate business because of the cost of it's infrastructure (software, internet and bricks and mortar distribution) Google pretty much has one thing: it's search engine. The search engine is under attack by Amazon (with their A9 search engine) and Microsoft, among others. The only real defense Google has is slightly better results and force of habbit (I use Google because I'm used to using Google). Right now Google has a big pool of cash from the stock market. But they remain vulnerable to competitors and they have no other revinue stream to fall back on.

Google seems to be attempting to take their pool of cash and diversify deeper into media and advertising. Presumably the objective is to give them a revinue stream like Amazon's, that cannot be easily attacked. But this evolution takes Google farther from being the leading edge technology software company that many Googlistas still seem to think they are.

Having been very wrong about Amazon, I fear making any predictions about Google's future. But it is tempting to say that they are following an Internet model where everything happens faster. In their case the rise to bloated egos beleiving their own press ("we're all brilliant") to business decline as their revinue growth stagnates and their attempt at expansion gets mired in the difficulty of expanding into advertising and media.

Big Arsed Wi-Fi

Maybe, just maybe they're hopping they can use the radio stations for very wi-fi.

Re:That's Good News....Maybe

2 Words. "Educational Programming" Maybe then, the average person wouldn't be so oblivious to the world around them.