Our Take on Google Radio

Is Google about to revolutionize radio advertising with their purchase of dMarc Broadcasting?:

dMarc connects advertisers directly to radio stations through its automated advertising platform. The platform simplifies the sales process, scheduling, delivery and reporting of radio advertising, enabling advertisers to more efficiently purchase and track their campaigns. For broadcasters, dMarc's technology automatically schedules and places advertising, helping to increase revenue and decrease the costs associated with processing advertisements.

In the future, Google plans to integrate dMarc technology into the Google AdWords platform, creating a new radio ad distribution channel for Google advertisers.

Here's Erick Schonfeld of Business2.0 on the deal:

Can Google use DMarc to serve contextual ads over the radio? Probably not terrestrial radio. But as radio goes digital, and you add in satellite and Internet radio, then things start to get interesting. Just by knowing what stations you listen to, more relevant ads can be served up to you.

Now take that logic one step further.  If Google knows your stations and playlists, and can marry that with what it already knows about your search behavior and your clickstream throughout the Web (i.e., if it knows your identity and can track it), then that information can be fed into an ad engine that serves up radio ads (or TV ads, for that matter), just as easily as it can serve up text ads.

Here's our take.  Revolutionizing radio advertising won't be as easy as it was to do for text ads online.  First of all, the context doesn't give any clues.  When I'm reading a blog on civil aviation, Google can rightly assume I'd be interested in ads related to civil aviation.  When I'm listening to country radio, they can't really assume I want to hear ads about country music.  Furthermore, there's no way to do a pay-per-click ad over the radio.  If I hear an ad, the company has to pay for it, whether I follow up on it or not.  There's no way to voluntary avoid ads that don't interest me if they're interspersed among music or talk.  And even if they somehow know the clickstream of the listener (because all radio users will necessarily use the Google search engine?) what happens when people are listening to radio together in a car?  Or, (at some point in the future when Google does TV ads) when the entire family is watching TV together?  This will make targeted advertising very difficult.  We're not saying that improving the efficiency and success of broadcast advertising is impossible, just that it is not going to be easy for Google, and there's no reason to assume that they'll be the winners of the space (which doesn't even really exist yet).