Google expanded into radio with yesterday’s acquisition of dMarc, a company that has used its market share in automation systems -- the software and hardware that run radio’s on- and off-air operations -- to create a 500-station media network that lets advertisers buy and insert radio advertising directly.
Josh McFarland, a business product manager at Google who was involved with the deal, said it “is a tremendous value add to the whole industry,” and Chad Steelberg, CEO of Newport Beach, Calif.-based dMarc, called the two companies “a great match” and said the deal is “not a zero-sum game” but will bring a new advertising platform to radio.
Contextual advertising to radio
Yet how Google will bring its contextual advertising to radio isn’t clear -- and the company isn’t disclosing any specific product plans. It will work on integration through 2006 with the end goal of making it “as simple as possible for advertisers to manage online and radio buys,” said Mr. McFarland.
Google, which is largely known as a search engine, is leaving no medium unturned in its quest to make its AdWords a multimedia standard. On Dec. 9, it enlisted its first print partner, running ads in Chicago Sun-Times by filling the paper’s “remnant” -- or unsold -- space with “Ads by Google.”
While the Sun-Times ads were placed near relevant content -- ads for ticket brokers ran in the sports section -- it isn’t yet clear how it would manage a similar contextual system in radio.
“We’re always looking for ways to bring measurable and targeted advertising to other media,” he said. “Right now, lowest hanging fruit in radio is to do that by [tailoring an ad to] locale, demographic, daypart and format. We will look toward other methods in the future.”
Of course, one could argue that targeting an audience by market, demo, daypart and format is exactly what good radio buyers do now.
Mr. Steelberg and his brother Ryan, dMarc’s president, share a background in online ad-serving through their previous venture, AdForce. They had long admired what Google has done with the online advertising industry and sought to create a similar system in radio. “Self-service economy, pricing structure and technology that brought advertisers and stations together. We designed it in such a way that we tapped into the same ethos that Google has brought to online market,” Ryan Steelberg said.
He said dMarc initiated discussions with Google last summer.
“From my perspective and Google’s as well since we took a play out of their book, our relationship since day one has been about measurement, accountability and ROI [return on investment] for advertisers,” Mr. Steelberg said. “Google can do nothing but help us make that happen like they’ve done in online space.”
Whether it fundamentally changes the way radio is bought and sold, just having a bit of Google’s luster rub off on radio could be good for that $20 billion ad revenue industry. During the first three quarters of 2005 Google posted $4.2 billion in advertising revenue, up 96% over the same period in 2004.
“Google moves fast and they’re leading the ad industry,” said Matthew Warneke, VP-director of network and local radio at MediaCom. “Will it bring more money to radio? Absolutely.”