July 27, 2006 4:00 AM PDT

Google rides the radio waves

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(continued from previous page)

"Why it raised so many eyebrows when the deal first came down is the fact that it opens the door to people thinking that radio ads would become a commodity; you put a bid in and get a buy," she said. "Most advertisers work through brokers, and (Google's automated system is) not the form most agency buyers would follow because it doesn't give you any choice to determine the real value of the media buy."

For example, advertisers may not be able to really pinpoint ads to run when a specific disc jockey is on the air, she said. "How do you know you are getting the lowest rate, the best mix or most efficient mix of stations? There's nothing to compare it to."

"It's disruptive, and that's what will keep it from really getting off the ground in the short term."
--David Bank
RBC Capital Markets

But Google's system is addressing concerns about discounted inventory, according to Greater Media Philadelphia's Fullam. "What's neat about this is the radio stations get to preview the creative copy and we pre-approve all rates before they get aired," he said. "Radio stations and Google will explore on a case-by-case basis which opportunities make sense."

Google contacted Greater Media a month or so ago and the two have since signed a one-year, nonexclusive contract, he said. Greater Media should be running ads by Google within the next 60 days, he added. Greater Media has 19 radio stations in its network, but Fullam said he did not know how many would be running Google ads.

David Bank, media analyst at RBC Capital Markets, predicted that resistance to change on the part of established ad agencies and some radio stations themselves will slow adoption of the automated system Google is offering. The new "transparent" buying system threatens to displace ad agencies, while radio stations are not likely to sell off their best ad time slots, he said.

"It's disruptive, and that's what will keep it from really getting off the ground in the short term," Bank said. "It runs counter to 75 years of industry practice. If you (radio stations) sell some of your inventory online, you are kind of competing with yourself. That probably won't make your sales force real happy."

Over time, however, the efficiency of Google's platform will win over the industry, he said. "The fact that it is more electronically based gives advertisers more comfort that they are getting what they are buying," he said. Ad agencies and stations "are still faxing invoices to each other and typing up affidavits."

"Will it be more successful than print? Who knows?" said Derek Brown, an analyst at Pacific Growth Equities. "Out of the gate, I would say expectations are extremely low."

But Google's strong sales and margins give it the luxury of being able to experiment, he said.

Bob Struble, chief executive of iBiquity, which created HD Radio technology, welcomed Google's move, calling it "fabulous" for the industry.

"It's a blending of old media and new media, and it's a validation that radio is still a vibrant medium," Struble said. "If you pair that with some of the new technology approaches of what Google has done with online ads, it makes a ton of sense."

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10 comments

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Work For Google?
Do you want to work for google?

Can you answer these questions?

<a class="jive-link-external" href="http://otherthingsnow.blogspot.com/2005/10/google-interview-questions-they-are.html" target="_newWindow">http://otherthingsnow.blogspot.com/2005/10/google-interview-questions-they-are.html</a>
Posted by SqlserverCode (165 comments )
Reply Link Flag
Google Radio Auctions
Google radio ads: who dreams this stuff up?

Will stations still want to OK all the copy and approve all the pricing?

A lot of new business for less effort or a little net gain with the pain?
Posted by optimad (1 comment )
Reply Link Flag
Google Sucks as Much as CNET
Google has been down for 2 days. Their death spiral
<a class="jive-link-external" href="http://www.techknowcafe.com/content/view/603/43/" target="_newWindow">http://www.techknowcafe.com/content/view/603/43/</a>
is occurring faster than CNET's.
Posted by (156 comments )
Reply Link Flag
Oh no, not this idiot again
Seems like every post of his is about how much something sucks and always including CNET in his opinion of suckiness... while incidently posting a link to some tech news site that only wishes to have the clout and traffic news.com has.

He's an attention seeking troll trying to get you to visit his site.

Grow up dude, go outside and make some real life friends!
Posted by SeizeCTRL (1333 comments )
Link Flag
dMarc / Scott Studios
dMarc prior to the google deal, bought Scott Studios. I work for a radio / tv broadcasting company and all of our radio stations are running SS32 by Scotts Studios which almost eliminates the need for a in studio DJ. We've had jocks go on vacation, but voice tracked in SS32 with the play list and they sounded live. Since radio makes money off selling ads, what is the incentive and the cut offered by google to individual stations? Why would we want to go with cheap ads sold in bulk pushed into timeslots sold by dmarc when we could sell those same timeslots to local businesses willing to pay more and know they will be reaching area listeners.

Great idea in theory, but I'm not sold on it yet.
Posted by SeizeCTRL (1333 comments )
Reply Link Flag
unsold inventory
The draw here, and maybe the arcticle didn't fully explain how this
works, is that dMarc only replaces avails in the traffic log.

I am sure your station, just like every station but a handful in the
country, has a few unsold avails. Well, you replace these unsold
avails with dMarc spots. It may not be your asking price, but ask
any GM, money is money.
Posted by chrisbuckland (3 comments )
Link Flag
 

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