Google CEO Eric Schmidt made it pretty clear where he saw the next big leap for Google during his appearance at the Web 2.0 conference in San Francisco four weeks ago: “There is so much ineffiency in ‘old media’ which we as Google can improve by employing our technological edge”.
Exactly this has now started to happe in a beta test on radio ads. It did not come by surprise as Google had bought dMarc Broadcasting in early 2006 for $102 million. After doing the necessary especially on integtration from the technology side, the search giant is obviously ready to shake up the $20 billion radio advertisement market in the U.S.
The clue: Upsell the existing AdWords clients into the highly leveraged radio syndication network that Google owns by now through a simplified web interface. That is indeed a huge shift which would not all of a sudden replace the radio salesman trying to sell you stones for gold, but at least a starting point to bring more awareness of performance metrics to the marketplace. Needless to mention to take fat out of the system with the result of lower prices. Actually, in the beginning Google intends to serve 700 radio stations in 200 metropolitan cities.
The lever that Google is certainly looking at beyond just upselling the existing customer base: Acquiring new customer initually interested in the lower price and higher transparency of the radio sales which then can be cross-sold to the flagship of AdWords. With click-fraud being a constant menace that Google is aware of, embarking on a medium which is not pay-per-click but per-per-audience, this strategy is certainly part mitigating a systemic risk which affects so far 90 percent of the company’s revenue base.
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I am yet to see the ROI of that $102 million.
Why does the word “bubble” suddenly appear in my little head?