Google has entered into the Radio business by buying dMarc Broadcasting of Newport Beach, California. Google is paying $100-million up front and will pay $1 billion or so if ‘certain’ performance targets are met. Mathew Ingram notes that eBay’s acquistion of Skype has similar terms.
What is dMarc?
You can call dMarc’s services as Adwords for Radio. Besides automating radio stations’ ad insertion process, it also provides station automation services to 4,600 stations through two subsidiaries, Scott Studios and Computer Concepts.
It earns the same way as Google does through Adwords.
The Kelsey Group suggests that,
Google reportedly plans to integrate dMarc’s radio buying capability into AdWords, extending the platform into the ‘real world’ and offering radio distribution (more geotargeting) to its advertisers.
Data we can’t miss,
Universal McCann’s Robert Coen has projected that radio advertising will be worth approx. $16.1 billion in 2006.
Action speaks louder than words. I think Google has begun this year trying to justify its high-and-higher share price.Henry Blodget , the former Merrill Lynch brokerage analyst who had doubts over Google skyrocketing share price, now says Google is entering the profitable business of buying ads in all types of media.
Google’s big media idea is to keep expanding its ad inventory - first online, then baby-steps into the print media. , pay-per-view TV, and now Radio. The idea is to get more and more of the marketer’s spend.
Next up? More TV action.
Google’s new Radio move is also about the importance of Local focus. Kevin M. Ryan thinks that Google’s radio move
...signals an entirely new direction for reaching out to audiences, shifting the directional local model from customer retention to new customer acquisition. The essence of local search lies in the nature of users seeking information about services in which they already have a need.
One Question:
What about the growing trend of ad-free digital radio?
