Google buys into radio advertising

Google buys into radio advertising

By David Bradshaw

Taken from Ovum EuroView, 18 January

Google has agreed to buy dMarc Broadcasting, a privately-owned, California-based automated booking and scheduling service for radio advertisements. Google is paying $102 million up-front, though performance-related payments mean there is scope for the final price to rise as high as $1.24 billion.

Google says that it plans to integrate dMarc's advertising placement system with its own AdSense placement system. The plan is to open up radio advertising to a new set of advertisers, something that dMarc was already working on but which Google can supercharge.

Comment: This is a very wise move - it plays to Google's core strengths of steering ad placements while diversifying into a new market. There's an old adage that marketing managers typically know that half their advertising budget is wasted - they just don't know which half. Google seems to be trying to make sure that whichever half is seen as wasted, it will still get the other half, especially if its attempts to diversify into newspaper advertising and (as rumoured) play into TV advertising succeed.

Adding other media to its portfolio makes perfect sense for Google for another reason. Both Google's core web-based revenue earners, AdWords and AdSense, are under attack from click fraud. Of course, Google is continuously stepping up its efforts to combat click fraud, but the fraudsters are also getting continuously more professional and sophisticated. The best that Google can hope for is a draw, but there are voices saying that it could come off the worst, which would undermine its core revenues.

On one crucial element the press release is silent: what will happen to Chad and Ryan Steelberg, founders of dMarc? This is the third advertising-based business that these two brothers have set up and sold for a pretty penny. If we were Google, we'd make sure that the sweetest and thickest set of golden handcuffs we could find were placed on the wrists of this pair of innovators.