Media Curmudgeon

« Bill Grimes Comments on Sirius and XM | Main | Egos Sink Air America Radio »

December 17, 2006

Google's Radio Plans

On Thursday, December 14, the Wall Street Journal's Marketplace section had a lead story by Kevin Delaney headlined "Google Tests New Ad Offerings--but Will Advertisers Follow?" The simple answer is "no."

The story, which was thorough and well written, as usual for the WSJ, detailed how Google had an extravagent party for major advertising executives from large Madison Avenue agengies and for advertisers and introduced its new radio advertising auction and support system. The support system included "a directory of specialists who can help advertisers create spots, writing scripts and recording and delivering the audio files." It also detailed how Google is "building an updated Web-based ad-buying system they want to use, something Google is working on."

The article goes on to claim, "Some bigger advertisers especially like the idea that Google can help them track the effectiveness of not only ads on the Web but in traditional media. At the meeting last month, executives presented Google Trends, a service that allows users to view the relative volume of queries for a given keywords consumers are searching for, such as 'Ninetendo,' over time."

In other words, Google is trying to disintermediate traditional advertising agencies and salespeople--put them out of business. I, for one, don't think Google will be successful. Large agencies will listen an be polite and eat the nice food and big cookies with clients' logos baked on them, but they won't buy Google's radio product in meaningful amounts.

How do ad agencies make their money (in some cases, a lot of money)? They create and place advertising. To clients, agencies pitch: 1) their creative ability--a reel of TV commercials is their biggest selling tool, 2) their marketing ability, and 2) their ability to plan and place an integrated media strategy. Measurable effectiveness is rarely mentioned.

"How do you measure a fabulous creative idea that propells a brand to the top?", they will say. Agencies don't want to be measured (in spite of what they say), because that turns creativity into a numbers game that clean-shaven, tie-wearing CPAs, MBAs, and CFOs can play much better than the bearded, open-collered, sloppy, chaotic creative types can. If effectiveness is measured by clicks and short-term sales, agencies are in trouble and they know it, so they will smile and mutter encouraging words, but never a major radio media buy will they make.

One of radio's traditional problems has been that young, hot-shot creative types make their big money and reputations by writing television commercials, not radio commercials. They won't write radio spots. Another problem for radio has been that the adminisrative costs of planning buying radio has been so unprofitable, that agencies don't want to bother with it. Therefore, Google's radio efforts will be successful with small spenders, like their AdWords search ads have been sucessful with small and mid-range advertisers, but will not be successful with the big money.

Television, especially terrestial network TV is where the profit is for large agencies, and that's where they will stay for as long as possible. Sorry Google, nice try. Oh, by the way, your Google Trends product is awesome.

Posted by Charles Warner at December 17, 2006 11:33 AM

Comments

Post a comment