Google Buys Into Radio

In a move that will allow Google to expand its AdWords platform to radio, the search giant acquired Newport Beach, Calif.-based dMarc Broadcasting.

dMarc’s automated advertising platform connects advertisers directly to radio stations, handling the sales, scheduling, delivery and reporting processes. Its technology performs much the same auction-based sales, ad-serving, payment and reporting functions of AdWords, but for radio ads instead of online ads.

Google announced plans to integrate dMarc’s platform into AdWords, adding another distribution channel for advertisers. In August, Google began testing a program to resell print ads to its AdWords advertisers in magazines, and began placing client ads in newspapers last month.

“Google is committed to exploring new ways to extend targeted, measurable advertising to other forms of media,” Tim Armstrong, Google’s VP of ad sales, said in a statement. “We anticipate that this acquisition will bring new ad dollars and accountability to radio by combining Google’s expansive network of advertisers with dMarc’s talented team and innovative radio advertising technology.”

Google will pay $102 million in cash up front, with performance-based payments — based on product integration, net revenue and advertising inventory targets — potentially reaching $1.136 billion over the next three years.

Most of that price is going toward the relationships and expertise that dMarc has in this area, said Greg Sterling, director of Kelsey Group’s interactive local media program. “dMarc has the inventory and Google has the platform — or will bring the efficiencies of its platform to dMarc’s network. That’s what’s suggested here,” Sterling said.

dMarc also has invested in technology that improves the measurement and accountability of radio ads. Whether that technology will be useful to Google remains to be seen, but it is apparent that both companies are approaching the challenge with similar philosophies and goals.

For example, dMarc allows advertisers to target an ad campaign across multiple stations in its network by market, station format, demographic and daypart. They can manage the campaign from a self-service interface, make changes on the fly, and assemble an assortment of reports and ROI data.

The company also has roots in Internet advertising, having founded the AdForce ad-serving and 2CAN Media networks, both of which were acquired by CMGi and added to its Engage unit.