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."

Comments

Radio? When will generic-casting be dead?

[dada21]

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?

[dada21]

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.

Magazine Adverts were a No-Go

[TubeSteak]

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

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.

Package Deals. Not all AdSense ads are small biz

[ScentCone]

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

[rueger]

Actually dMarc is actually a good fit for Google. What dMarc's RevenueSuite 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.