Google AdSense for Radio targets 'declining sector'

A “sluggish

In “Will Google ever build another billion dollar business?” I discuss Google CEO Eric Schmidt’s desire to apply the Google magic advertising auction formula to radio advertising:

Last June, Schmidt used his signature story-telling style to colorfully describe the opportunity for “digital targeting” in radio advertising, as I present in “Google targets GPS-based in-car personalized advertising”:

Eric Schmidt, Google CEO, believes that when he is listening to the radio in his car, radio ads should personally address him about his needs. For example, while driving past a clothing store, a radio ad should remind Eric that he needs a pair of pants and instruct him to turn left at the upcoming clothing store.

I cite Schmidt on his rationale for targeting the radio advertising market, and the television advertising market to boot:

Those businesses are billion dollar businesses.

Google acquired dMarc Broadcasting earlier in the year to serve as its entrance into the radio market, as I also discuss in “Will Google ever build another billion dollar business?”:

Google has a lot riding on its radio bet; $1.13 billion to be exact. Google owns dMarc Broadcasting, for better or worse.

The New York Times’ “Changing its Tune” less than optimistic story yesterday on the “sluggish” radio ad market dampens the prospects for Google’s radio bet:

While more than 9 out of 10 Americans still listen to traditional radio each week, they are listening less…

'It’s not a debate any more that radio is a structurally declining sector,’ said Michael Nathanson, media analyst at Sanford C. Bernstein & Company…

Broadcast radio advertising over all was up 0.3 percent in 2005, lagging in growth in comparison with the gross domestic product for the third consecutive year. It will continue to lag economic growth for the next five years, according to Veronis Suhler. (Only the newspaper industry gets a slower top-line growth prognosis.)

In “Google AdSense for Radio: Google diversification win?” I question how disruptive Google’s work with dMarc Broadcasting can be:

Google acquired dMarc because of its existing track record in the broadcast space…

According to dMarc, through its Scott Studios and Maestro automation systems, it is already working with ‘thousands of radio stations in the US and abroad.’

Eric Schmidt, Google CEO, describes AdSense for Radio as ‘essentially the integration of the dMarc Console and management tools into our advertising network.’

At Google’s Q2 conference call Schmidt characterized Google’s work with dMarc as “very exciting.”

I conclude in “Google AdSense for Radio: Google diversification win?” however”:

Google needs to propel its excitement into an AdSense for Radio win. To date, Google’s diversification efforts have not met expectations.



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