Countdown to Google Radio

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Things have been quiet since Google acquired radio automation firm dMarc in January. At that time, Google laid down just over a hundred million dollars for dMarc, which had already built a successful network of some 4,700 radio stations using its ad scheduling and reporting software.

But behind the scenes, things have been moving quickly. In the past few months, we’ve seen the following events:

1. Throughout the Spring, Google has been busily hiring Media Account Managers, Customer Support Technicians, and others to staff various radio-related departments, including Station Operations, Media Operations, Affiliate Sales, and On-Air-Recording units. These jobs are widely dispersed, and include postings in Mountain View, Irvine, New York, Chicago, and Dallas.

2. In mid-June, Google CEO Eric Schmidt, appearing at a conference of New York publishing executives, used the example of a GPS-equipped car with a “radio that knows where you are” to illustrate how targeted radio advertising might work. Noting that today’s generation of car radios and set-top boxes have the ability to provide this kind of targeting, Schmidt noted that such systems could be operational “within a year or two.”

3. In late June, Google invited a group of Webmasters to see a demo of its new system (dubbed “Adsense Audio”) at its new facilities in Irvine, California. Unlike many Google products rolled out before being finalized, the system demonstrated by Google appeared to be mature and essentially identical to that described on dMarc’s Web site.

4. In early July, a Google Adwords advertiser leaked word that he had been e-mailed a survey asking for feedback about a proposed Google Audio ad platform. The survey specifically asked about how such radio ads might be priced, offering three choices (setting a maximum price to enter into a pricing auction, purchasing guaranteed media placement positions for a set price, and pricing based on cost per performance). It also contained the most complete description of the service yet published: “The new service will connect advertisers directly to radio stations through its automated processes. This technology seeks to simplify the sales process, scheduling, delivery and reporting of radio advertising, in an effort to help advertisers more efficiently purchase and track their campaigns. In addition, the service connects advertisers directly to creative and production talents for this creation of radio ads. By helping to increase the ease of implementation and accountability of radio spots, this platform seeks to bring greater ROI to advertisers nationwide.”

Google is naturally tight-lipped about when its radio ad service will debut, but all of these signs indicate that Google Radio will likely be deployed sooner, rather than later. dMarc’s technology is mature and operational; meaning that the only significant programming tasks involve integrating it with Adwords. A few key missing pieces to the puzzle remain missing. How will Adwords users actually create the audio ads? Will they record the spots on their own and upload them, or submit scripts which will be read by human readers (or perhaps machines?) What kind of auction will be used to sell them?

Even after perusing the dMarc website which provides the most hints to how the future of Google broadcast auctions might look, a lot of details remain unknowable, but I’d argue that Google Radio (or “Adsense Audio”) will likely be online by the end of the year, because the upside potential for Google is so high. In 2005, broadcast radio advertising was a $21.5 billion per year business, more than three times as much as Google booked during the same period. Unlike the online medium, however, radio’s growth is essentially flat, and its future looks dim. Automobile manufacturers, which account for 14 percent of radio ad spending, are increasingly shifting their dollars to more targeted media. New forms of audio delivery, including the iPod and Satellite Radio, are chipping away at radio’s audience. Radio is a medium which badly needs an upgrade, and if Google’s new system can bring efficiency and accountability to it, it will benefit all of radio’s stakeholders.

Are you ready for Google Radio? What effect will it have on the way you run Search campaigns? Make sure your in-house team or SEM agency is keeping tabs on what Google is doing, so that when this new functionality becomes available, you’ll be ready to integrate radio advertising with your Adsense campaigns without missing a beat.

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Mr. Frog is a leading Search industry visionary. Mr. Frog is a member of the Did-it Search Marketing team which accompanies him to most major
marketing conferences.

Countdown to Google Radio
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