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February 15, 2007

Bruce Braun On Google Selling Radio Spots

Guest blogger Bruce Braun writes about Google's failed attempt to sell radio air time after reading the following written by Eric Sass in Media Post:

"Why Can't Google Sell Premium Radio Ads?
by Erik Sass, Wednesday, Feb 14, 2007
With the departure of DMARC founders Chad and Ryan Steelberg last week, industry observers are buzzing about Google's ongoing attempt to penetrate the radio market with low-cost online ad sales and placement."

Bruce then writes:

"As smart as the Google guys are, they are still arrogant and ignorant about advertising. AdWords and AdSense are not really advertising or marketing products. They simply match up searches to lists of products, services and names for a fee. From a technology standpoint, that is a great accomplishment. Certainly their success in attracting a market for these products is amazing. But that is where it all ends for Google.

Does Google really think CBS or any other radio group is going to turn over their prime inventory to them? We have all seen remnant sellers/brokers for 40 years and no one ever turns inventory over to those guys unless the market has tanked and the station is desperate.

For those of us who come from radio and television backgrounds, dMarc and what Google sees as the future of radio (and TV) advertising sales is a joke. Google aims to be a broker of air time. Nothing more, nothing less.

One thing could be rather easy to predict would be guys like Redstone selling all of their inventory to Google for about 50% more than what CBS radio could have every hoped to generate on their own. Lock in that 50% premium for about five years with annual rate increases along with a guaranteed payout and it becomes a home run for CBS. At that point Redstone could eliminate the entire sales organization, saving hundreds of millions, with no cost of sales over the contract term and every dollar going to the bottom line profit.

All Redstone would have to do then would be to figure out how to get rid of programming costs!

If I were Redstone, I make sure the payments from Google were all cash and not stock for this sort of deal!

Google can learn the hard way what it means to REALLY be an advertising driven business."

Posted by Charles Warner at February 15, 2007 04:04 PM

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