Google Kills Its Radio Product in Sudden Turnaround

Less than a month since it shuttered its ailing print ads program, Google announced it will kill its radio ad offering as well. Traditional media firms concerned about a potential Google takeover may be breathing easier as the search ad giant realizes not all media can be bought and sold successfully using the same model. The company plans to sell the hardware-based radio ad and programming automation business it acquired through its purchase of dMarc Broadcasting in 2006, and has indicated it wants to move into online streaming audio advertising.

“We’re always reviewing our business,” Google spokesperson Brandon McCormick told ClickZ News today. When asked about the future of the Audio and TV Ad units about three weeks ago, McCormick said the company had “No plans to do anything with [either program].”

“While we’ve devoted substantial resources to developing these products and learned a lot along the way, we haven’t had the impact we hoped for,” stated Google VP Product Management Susan Wojcicki on a Google blog dedicated to its dying traditional media products. The only one remaining is its TV ads offering.

The Google Audio Ads and AdSense for Audio programs will cease in June. At this point, the company has not discussed a sale of the automation system, but according to McCormick, the firm’s “goal is to find a buyer who is willing to take over that business.” Google may lay off as many as 40 employees as a result of the closing.

Google battled several hurdles in trying to gain ground in the terrestrial radio business, the most challenging of those being attracting advertisers. The firm had trouble translating the promise of online search advertising to radio advertising; it will not reveal the number of advertisers using its offline programs. “I don’t know anybody who’s bought it,” Brad Saul, president of radio network and syndication firm Matrix Media, and a radio industry consultant told ClickZ last month.

Because radio advertising results are far less quantifiable than Web advertising, the company had trouble proving the value of radio ads to its stable of online AdWords advertisers. The promise Google made to its print and radio media partners — and the promise it continues to make to its TV partners — is that it will bring the advertisers already using Google’s Web ad offerings to old media. But each medium has its own unique properties, and advertisers don’t necessarily find the same value in radio, TV, or print that they do online.

Geo-targeting radio advertising also is much less refined than Web advertising. Unlike the Web or local newspapers that might only reach residents of a certain zip code or small town, radio stations have a relatively broad reach.

Google said it will continue investing in its “growing TV advertising business, where we can measure audience response and help advertisers understand how effective their ads are.” The imminent switch to digital television should facilitate Google’s TV ad goals.

As recently as last week, Google was still making last ditch efforts to revive the radio program. It held its “AudioCast 2009” event in its New York offices, intended for “advertisers, agencies, broadcasters, and forward-looking innovators who are committed to creating a sustainable radio business.” Confirming the company held the event, McCormick told ClickZ, “We are constantly evaluating the impact of our products through regular business reviews. Recently, new information came to light, and at Google, we move quickly and we acted on it.”

Since launching the program in 2006, the firm had emphasized promotion and education to get advertisers interested. In October 2007, Google offered advertisers $2,000 toward future radio ads when they spent a minimum of $1,000 on an individual campaign.

The company struggled to convince radio stations to adopt the technologies it obtained when it bought dMarc, platforms for radio programming and advertising that are provided as hardware, sold by resellers, and shipped just like computer hard drives or processors. In addition to ad inventory deals with Clear Channel Radio and Emmis Communications, Google banked on distribution of its recently upgraded automation platform to bring more inventory to the Audio Ads network. Indeed, the company used some creative ways to promote the system. “They offered us the latest software for free,” a chief engineer for several radio stations told ClickZ News in January, speaking on condition of anonymity.

There are 1,600 radio stations in the Google network, according to the company. However, the inventory tends to consist of remnant, late-night ad slots.

In her blog post, Wojcicki wrote that Google plans to use its technology to develop an online streaming audio product. It has been surprising to some that the firm didn’t opt to offer a streaming ad product in lieu of or in addition to its radio offering. The competition may be stiff. “They may have been leapfrogged by TargetSpot,” suggested Kurt Hanson, publisher of Radio and Internet Newsletter and CEO of AccuRadio. TargetSpot, an online radio ad platform, recently bolstered its large radio ad network with the acquisition of rival Ronning Lipset Radio in October. TargetSpot claims the combined network reaches more than six million users weekly.

“Having Google introduce their million plus advertisers to the high impact and highly targeted streaming audio ad further validates its value,” noted TargetSpot CEO Doug Perlson in a statement sent to ClickZ. “Google will have a positive impact to the entire internet radio community. We welcome their entry into the space.”

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