Thursday, February 12, 2009

I'm Glad Google's Gone

Certainly, I hate to see anyone pay what was estimated to be up to $1.24 billion for radio advertising technology company dMarc in 2006 and then have to abandon it, cutting the first jobs in Google’s history, "marking an end to the company’s heady first decade of rapid expansion" (as Financial Times put it), but the last thing radio needs right now is more dollar a hollar rates.

If you have unsold inventory, please don't give it away. Cut your unit load; hold your rates.

This will not only prevent you from further undervaluing your station, which will take years to recover from, but it will improve TSL, make your station more competitive for listeners' time, increasing ratings, allowing you to charge even more.

When the economy starts to turn around, you'll be in a much stronger position.


Ryan Chambers said...

In some of the articles they talk about Google getting out of radio completely, others just the spot-selling aspect. Have you heard if they're cutting the automation side? On one hand, we've put a lot of time and effort into getting Google (aka Scott Studios) to work right. On the other, after hundreds of updates, it still doesn't.

As for the "dollar a holler" spots they were selling, our sister station's airstaff (and probably listeners) are thrilled. Many of the spots were local to major markets, being run throughout the country. I think the cost of a nationally run "fill" spot ended up being cheaper than buying local in LA. So they get their spot on in LA and Moscow, Idaho is running spots for Joe's Car Barn in Malibu. Not only does this sound ridiculous to anyone listening but I'm sure the local dealerships have to be scratching their heads as to why we're running spots for out-of-town businesses.

The long and short of it is, the spots were terrible, I can't believe we really made much money from them and they were a pain in the ass to get working right anyway.

Radio-Online said...

Google announced on Thursday that it's ending its program to sell radio advertising. Entitled Google Audio Ads, the program launched in 2006, but did not live up to the company's expectations. The move is likely to result in the layoffs of 40 people, Google revealed on its blog. However, many of those involved radio ads program could be reassigned.

"While we've devoted substantial resources to developing these products and learned a lot along the way, we haven't had the impact we hoped for," said VP/Product Management Susan Wojcicki. She also noted that Google would use some of its radio advertising technology to deliver ads on streaming audio programs online.

In a statement, rival TargetSpot CEO Doug Perlson said, "We launched TargetSpot in 2007 with the belief that online audio advertising -- because it combines the targeting, measurability and interactivity of the web with the impact of an audio ad – is the future. Having Google introduce their million plus advertisers to the high impact and highly targeted streaming audio ad further validated its value."

Jerry Del Colliano said...

Google Schmoogle -- Radio Is a Relationship Busines: Google in its infinite wisdom about all things sales, thought they could automate radio selling and eliminate lots of expenses -- like sales people and the expenses they incur including health benefits.

Sounds like Google's plan was made in heaven for a bunch of radio consolidators who still can't tell local radio from Ryan Seacrest.

Inside Radio/Frank Saxe said...

Google’s radio exit strikes more symbolic blow than financial. Great revenue projections never materialized, but the internet giant’s interest in the medium helped radio’s image. But as revenues have tightened, Google decides to cut its losses and as of May 31st will stop selling and placing radio ads. Google VP for product development Susan Wojcicki says, “While we’ve devoted substantial resources to developing these products and learned a lot along the way, we haven’t had the impact we hoped for.” Google has dropped a similar newspaper ad program, although it remains committed to its television business, which it says continues to gain traction. Google entered radio in 2006 with a deal to pay up to $1.24 billion for Chad and Ryan Steelberg’s dMarc Broadcasting, although it likely missed revenue targets making the final price significantly lower. Google hopes to recover some of the millions spent trying to crack the radio code by selling its radio automation business that includes inventory management software. About 40 Google employees will be laid off as a result
of this action. The company hopes to find other roles for a majority of other staffers who have worked on the project.

Jim Carnegie/RBR said...

Google had three problems: 1) The box and service was too expensive for stations. 2) They couldn't get beyond remnant inventory to offer advertisers and 3) Radio ad sales are down dramatically and have been for quite some time. So the deal that Google had with many stations was probably at a higher rate than what stations are selling the inventory for today. Stations were and are probably undercutting the Google inventory on rates (unless there was some caveat in the contract forbidding that).