Google Challenges Traditional Radio Advertising Paradigm

Google Inc (Google), through an online market-making service, facilitated by its purchase of DMarc Broadcasting early in 2006, is allowing small advertisers to penetrate into the radio market in what Goggle sees as an easy-to-manage and affordable way. It does this by removing the middleman, typically the radio station's advertising department, and by using online auctions to let advertisers bid on radio time. The first radio ad resulting from this program played at the beginning of December. An advertiser logs into the Google site and chooses characteristics for its ad such as geographic area, audience demographics, time of day and format. The advertiser then states the amount it is willing to pay for the ad, not knowing which station will carry the ad. Google also provides access to on-air talent and producers, for customers which have not already created the content for the ad. Naturally, Google receives a commission from each sale made. By contrast, the current advertising process usually involves advertisers and ad agencies establishing personal relationships with radio stations. If this innovation becomes established, it would appear to be another instance of IT acting as a creative but disruptive technology in the marketplace. Some radio executives are concerned that their sales teams will have to compete with Google and ultimately lower the value of radio advertising, but others welcome it as an innovation which may revitalize the current slump in radio advertising. For more information on the topic from News.com see: http://news.com.com/2100-1024_3-6099025.html For a review from a marketing perspective visit: http://www.clickz.com/showPage.html?page=3579981 Summary by: Nyall Engfield