UPDATE: Chad and Ryan Google Radio (not Chad and Steve Google YouTube) have flown the Google Audio Ads coup. The Steelbergs, founders of Goolge's dMarc Broadcasting, apparently are having second thoughts about Google's future in radio.
Readers of this Digital Markets Blog know I have been exclusively chronicling and dissecting Google's inability to successfully diversify beyond its sole reliance on search advertising revenues.
Upon conclusion of Google CEO Eric Schmidt's report to Wall Street just last week, I reiterated: GOOGLE RADIO NOT A CATEGORY KILLER, see below.
January 31, 2007: In “Google Radio: Will Audio Ads make money?” I underscore the strategic importance of Google’s one year plus initiative to diversify offline into radio advertising.
Google’s acquisition of dMarc Broadcasting in January 2006 was less costly, and less “sexy,” than the high-profile, high-powered takeover of YouTube. Radio does not have the marketplace cachet of online video. Nevertheless, Google has a lot more riding on its dMarc investment, than the YouTube deal.
Why? Google CEO Eric Schmidt has a fantasy, a world wide advertising domination fantasy:
‘The long-term fantasy is we walk up to you and you give us, say, $10 million and we'll completely allocate it for you’ across different media and ad types,' he has been cited by the Wall Street Journal as saying last Fall.
Currently, Google’s investment in the radio advertising industry represents its only potentially viable foray into “different media and ad types” offline.I analyze Google’s inability to have any success in it multi-year efforts at diversifying into print advertising in “Google: $48 billion newspaper friend or foe?,” “Google NOT revolutionizing newspaper ad sales” and “Google $48 billion Print Ads test: fourth time’s the charm?”
Print and radio are the only offline advertising markets which Google has attempted to address. Google has failed to date in print ad sales brokering and has not shown any success in radio ad sales brokering to date.
In announcing Google's acquisition of dMarc, Tim Armstrong, vice president of Advertising Sales, said:
Google is committed to exploring new ways to extend targeted, measurable advertising to other forms of media.
Google CEO Eric Schmidt boasted today in his opening statement to Wall Street for the Q4 earnings call:
Google is now presenting a much larger business mission… We're talking to advertisers about using Google for all of our advertising incentives, not just text search, and that is going well.
Is Schmidt’s “going well” diversification commentary to Wall Street an accurate assessment? It is doubtful.
Schmidt also asserted in his opening statement: “Vendors are using products like Google Checkout, which is doing well for us.” When Schmidt turned the earnings call floor over to George Reyes, CFO, however, Google Checkout performance was far from stellar, as I report and analyze in “Google Checkout is a loser, really.”
When asked if Google’s radio initiatives would be a revenue generator in 2007, Omid Kordestani, SVP, Global Sales and Operations, reiterated the “status report” Google has been putting forth since almost the day it acquired dMarc Broadcasting more than a year ago:
We are working hard on integrating the product functionality, the campaign management tools as well as the build out of the sales force and the partnership teams to acquire the proper amount of inventory. So again, it is early to tell on most of these initiatives their full impact on the financials.
Google was asked: “Could you help us understand your view on when you extend the Google ad platform to traditional media, what are some of the advantages you provide to advertisers? What do you see as your real advantage there as you enter traditional media going forward?”
Jonathan Rosenberg, SVP, Product Management on Google’s radio pitch:
If you think about accountability and an enabling measurement for radio, one of the things that we provide is real-time reports on exactly where the ad played and when it played. These are things that sound simple, but they are a pretty huge improvement over the way traditional radio reports, which aren't otherwise available until 12 weeks after the ads run had previously played out.
A real time report? Maybe not simple, but not revolutionary either. Certainly not the “targeted, measurable” value proposition of Google’s AdWords money machine.
Earlier this month, as part of my exclusive ongoing countdown to Google Audio Ads, I put forth that Google is not positioned to revolutionize the radio advertising industry, in “Google Radio: Will Audio Ads make money?”:
Despite Google’s claims of bringing AdWords style “targeted, measurable advertising” to radio, the Google-dMarc Audio Ads system will bare little relation to its AdWords money making machine.
Google-dMarc operates in a “legacy” advertising business, on the industry’s terms, not Google’s.
Google is not selling a Google radio revolution to radio professionals; It can’t, if it wants to maintain its credibility.
My countdown to Google Audio Ads nevertheless continues, perhaps for a long time!