News story about the extension by Google Inc. of its 'AdSense' advertising programme to the terrestrial commercial radio market in the US, written by Grant Goddard in August 2006 for The Radio Magazine.

1. NEWS: GOOGLE INC EXTENDS
'ADSENSE' TO THE
TERRESTRIAL COMMERCIAL
RADIO ADVERTISING MARKET
IN US
by
GRANT GODDARD
www.grantgoddard.co.uk
August 2006

2. Google Inc has launched a pilot scheme to sell advertising time on US radio
stations and will roll out the service within three months, following its US$102m
acquisition in January of dMarc Broadcasting’s automated online booking
system.
Google chief executive Eric Schmidt told analysts: "We are in the process of
introducing 'AdSense' for radio, which is essentially the integration of the
dMarc console and management tools into our advertising system. There are a
number of very interesting deals being negotiated."
The pilot is being run on Detroit stations owned by Greater Media Inc, whose
vice president John Fullam commented: “I think dMarc has an opportunity for
us to connect with advertisers we don't normally interact with.”
He said that the Google scheme was a big change from the existing
advertising system, where salespeople usually rely on personal relationships
with local companies. Using Google, businesses anywhere in the world can
book adverts on any local radio station in the specific timeslots they prefer, and
track the results online. Automation cuts out the work of advertising agencies,
lowers prices for advertisers, and generates additional revenue for stations.
"What's neat about this is the radio stations get to preview the creative copy
and we pre-approve all rates before they get aired," Fullam said. "Radio
stations and Google will explore on a case-by-case basis which opportunities
make sense."
Resistance to the new system is likely to come from advertising agencies
whose livelihoods are being threatened. David Bank, media analyst at RBC
Capital Markets, explained: "It's disruptive, and that's what will keep it from
really getting off the ground in the short term. It runs counter to 75 years of
industry practice. If you [radio stations] sell some of your inventory online, you
are kind of competing with yourself. That probably won't make your sales force
real happy."
Mark Zagorski, chief marketing officer of the MediaSpan Group, commented:
“It's a lot easier to dominate a new industry with only ten years of history than
ones with deep personal legacies, relationships on both sides of the aisle
(salesmen and agencies), and an ingrained infrastructure of people that need
to keep paying their kids' tuition bills. If Google thinks that these people and
the businesses around them will go down without a fight, they may be in for a
surprise. Every revolution has its price, and both sides will end up paying.”
Google’s existing online AdWords advertising system was launched initially in
the US and then rolled out internationally to great success. The question is
whether Google can persuade UK radio stations to participate in such an
innovative system. Both here and in the US, radio revenues are falling, putting
pressure on stations to sell airtime in any way they can.
News: Google Inc Extends 'Adsense' To The Terrestrial Commercial Radio Advertising Market In US page 2
©2006 Grant Goddard

3. News: Google Inc Extends 'Adsense' To The Terrestrial Commercial Radio Advertising Market In US page 3
©2006 Grant Goddard
American national satellite network 'XM Radio' has already signed up to the
Google system for its 100 non-music channels, which carry advertising and are
sold to listeners on subscription.
Darren Davidson, deputy media editor of 'Campaign' magazine, said that “at
first, media agencies could resist attempts to try out Google’s new technology”
but eventually “most agencies will co-operate”.
[First published in 'The Radio Magazine' as 'Google Brokers Radio Ads', #748, 9 August 2006]
Grant Goddard is a media analyst / radio specialist / radio consultant with thirty years of
experience in the broadcasting industry, having held senior management and consultancy
roles within the commercial media sector in the United Kingdom, Europe and Asia. Details at
http://www.grantgoddard.co.uk