When Google announced acquisition of dMarc Broadcasting, a digital media solutions and services firm, it became clearer Google has no intentions of stopping at the arbitrary boundaries of the Internet. DMarc is in two businesses: technology and a media network that places ads digitally and remotely into rotation on stations with the dMarc technology. The station ad sales manager can specify what radio ad inventory to release to the dMarc radio network.
This acquisition puts Google in the traditional radio advertising business with a platform that’s already partially self-serve and runs much closer to real time than existing ways of buying radio advertising. Sound familiar? It’s like AdWords with digital audio files, and radio stations, geographies, and dayparts instead of keywords. If you currently buy radio advertising, Google will soon have some new things to offer you.
Great news, but perhaps Google will implement its famous auction methodology for radio ads, controlled by its combined system. If that happens (and I’m betting it will) the insertion order (IO) process that guarantees ad rotation will be replaced by an ad-spot auction running in near real time. Soon you’ll be bidding for each defined group of ad spots against all the other marketers who want to reach the same audience. In an auction for radio or TV ad inventory, you’re fighting every marketer, not just industry-specific competition.
Buying media is going to get a lot more interesting.
Most analysts and pundits view this acquisition as Google’s lateral expansion into other ad media that can be defined, priced, trafficked, and delivered to the media source digitally. And they’re right. If highly valuable, easily definable, scarce advertising assets are allocated in an auction, media buyers and marketers must get used to an entirely new way of buying advertising space in radio, TV, cable, and perhaps print for pre-identified ad placements.
Yet there’s another fascinating potential facet of the dMarc deal fewer analysts are talking about: the applicability of digital audio/video ad marketplaces to podcasts and streaming Internet radio. ITunes and its competitors distributes paid content and ad-supported, free podcasts. However, most podcast platforms don’t dynamically insert the ad into a podcast based on recipient. Wouldn’t it be far better if podcast ads were targeted to each listener, making them more relevant? Of course it would. The premise of better targeting and improved relevance is an underlying concept behind the AdWords and AdSense systems. These systems already narrowcast text ads, specifically at users who either have performed a search or are engaged in narrowly focused content.
With digital audio/video ad targeting and trafficking, an advertising system can easily use more than context to target ads. Podcasts or streaming Internet radio shows consisting of news, for example, often provide a poor contextual basis for ad targeting, just as they do in analogue form. But podcasts are often subscribed to on an individual basis, and online radio could require registration. Individual user registration becomes a killer advantage in targeting ads in a more relevant way, even better than targeting at the household level. If Google, MSN, Yahoo, or any other ad server knew I’m about to have my first child (which I am) together with my Zip Code, age, and gender, it could use that data and a podcast’s context to serve me advertising so relevant I may actually listen -- or watch.
Suddenly, repurposing audio and video content for online podcast or real-time distribution will have an ad-supported model that provides existing content owners with a new source of revenue and stimulates new content development. If I can spare the time, I’ll put together some podcasts of my own as soon as the ad revenue models or pay-per-view infrastructure has proven itself.
Agencies and marketers ready to take advantage of these systems over the next year will have a huge advantage over marketers who continue to use old-school ways of buying, planning, trafficking, tracking, and reconciling ad media. If you know a CMO who doesn’t understand the next generation of new media and the impact digital ad marketplaces will have on his business, sit him down and alert him to the coming revolution.
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Kevin Lee, Didit cofounder and executive chairman, has been an acknowledged search engine marketing expert since 1995. His years of SEM expertise provide the foundation for Didit's proprietary Maestro search campaign technology. The company's unparalleled results, custom strategies, and client growth have earned it recognition not only among marketers but also as part of the 2007 Inc 500 (No. 137) as well as three-time Deloitte's Fast 500 placement. Kevin's latest book, "Search Engine Advertising" has been widely praised.
Industry leadership includes being a founding board member of SEMPO and its first elected chairman. "The Wall St. Journal," "BusinessWeek," "The New York Times," Bloomberg, CNET, "USA Today," "San Jose Mercury News," and other press quote Kevin regularly. Kevin lectures at leading industry conferences, plus New York, Columbia, Fordham, and Pace universities. Kevin earned his MBA from the Yale School of Management in 1992 and lives in Manhattan with his wife, a New York psychologist and children.
March 19, 2014