Google’s ambitious foray into radio advertisements may be significantly delayed, says RBC Capital Markets analyst Jordan Rohan. The problem? Google may not have access to enough radio airtime for advertisers to test the product.
We first wrote about Google Audio ads a week ago when competitor Voices.com was saying flat out that Google copied part of their product. Google plans to handle audio ads for customers from soup to nuts: assistance with ad creation, the ability to bid on radio spots, and target ads by geography, station type, listener demographics and time of day.
But none of this is useful if Google isn’t able to get access to advertising inventory. “We believe a critical mass of advertisers is interested in testing the platform,” Rohan said. “However, there is simply not enough radio inventory in the Google Audio system (yet) to enable buyers to run campaigns.”
Google may be working on a deal with CBS Radio to get access to more ad space.
















Comments
First it’s online advertising, now it’s radio advertising. I suppose it’s only a matter of time before they get their feet wet with traditional advertising…television advertising! That trifecta of a portfolio is pretty hard to compete against, especially if you have the Google brand behind it.
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Don’t you hate it when you have too many advertisers willing to pay good money than you can handle? I’m looking forward to that problem with my own advertising system!
If they have more demand than advertising time, shouldn’t they simply charge more? Or is the problem that advertisers simply can’t buy enough ads to be effective?
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Michael & readers-
I have to caution you: PLEASE LOOK AT MR. ROHAN’S ASSUMPTIONS with a grain of salt. Why? I’ve worked at RBC and the guy has a very spotty record, which may not be surprising for analysts as a whole, but he’s been wrong on many stock calls and product features of the universe he covers.
With GOOG’s dMarc Broadcasting acquisition sometime back I’m quite confident Google will be able to integrate and extend the advertisement offerings to its customers.
Has google ventured into the realm of podcast ADs ? It would seem to make more sense for a multi-pronged approach for audio-ads, considering they could basically be in the same format.
This is a temporary setback. Google is bound to cobble together a deal with a major radio network and then, voila! - instant, nation-wide inventory.
As Yaser notes in #3, Google wouldn’t have purchased dMarc if they couldn’t, eventually, offer inventory to advertisers.
Radio stations (and TV stations) rely heavily on political advertising to boost profits every 2 years. Google’s collective ad buys could be much larger and sustained over a longer time frame than the biennial political ad gold rush. Google will have a substantial impact on the radio ad market. They could re-write the rules of radio advertising - and boy howdy, that would be a good thing - if they choose to.
Google is trying to diversify in media aggresively. Rightly pointed by one gentleman, that they would also jump in television advertisement space. All I am wondering is Google is really good at search. Rest other is popping up as they have big fat money. That does not ensures success for them. So, guys, do not worry.
I agree with Tom, they should try to get into podcast ads and move onto radio ads from that.
The real strength of Adwords and Adsense is that SMEs use them widely. I doubt that Google could make voice ads as easy as text ads for SMEs to use.
-Mike
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Why do they target the “offline” market rather than the online market?
There is enough radio/audio streamed online just waiting to be monetized. They can revolutionize in supporting audio blogging and podcasting the same way they “enabled” the blogsphere with AdSense.
I think they are really missing out here.
google….is trying to take over advertising…guess google is going for the number 1 spot in advertisement
This news proves that the demand for radio ads is larger than the supply. I believe Google will pull through, and follow up with television advertising within 12 months.
I believe Google Audio Ads will eventually encompass podcast advertising as well. For now, they’re rolling out their acquired dMarc technology and are probably actively working on developing the needed tools to make “pod ads” effective.
The bottom line for Google is that they’re attempting to diversify and increase their advertising footprint — the meat and potatoes of Google’s revenue.
For the reasons I gave in comment #22 from the original article, all this lack of inventory does is point up one more problem with this model…
As with their “auction print ads” initiative, this one too will be, effectively, D.O.A.
While kudos are in order for making the attempts, paid seach has a set of very unique structural and operational factors (thank you again Bill Gross and your team from GoTo/Overture) which will never align with, nor translate effectively, to offline media. Ever.
The real-time online auctioning/monetization of text is a one-trick pony (er, 800 pound gorilla).
Good lord, the Google fandom is embarrassing.
Google has proven one thing - they know how to monetize search. I have yet to see a successful ad implementation / aggregation of these other media services (print or radio). And now you all gush about TV?
Steve M is correct - job well done on copying and ultimately improving Bill Gross’ model. This in now way guarantees they will be able to streamline VERY old school advertising methods like print, radio, and broadcast.
I knew it.
Wow. I can’t imagine it will take long for Google to get this space, though I’m surprised they didn’t already have it lined up. And how much can they possibly need? Can’t they just say that they don’t have spots available - kind of like they do with Adsense when there aren’t any more pageviews available?
As someone that works in the radio ad sales business, I still have yet to understand why a radio company would resell it’s inventory to Google for 50cents on the dollar. Additionally, they have hired a ton of local radio sales reps and are talking to the same clients as the traditional reps are. They promise a seamless buying system….that is what is attractive to the buyers. Additionally, we have heard that they are charging stations a setup fee of $75,000 each to be part of their system. I still don’t understand how it makes financial sense for the radio companies to give up their inventory. Am I missing something.
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