More on the Google story

As I mentioned in the Google Gets out of Radio post, many within the Radio industry are taking the news as some sort of white flag from Google. Yesterday in speaking with a long time veteran of the Radio biz I was told the reason Google got out was because they could not figure out how to sell Radio!!

Pretty incredible if you know Google's business models of the past and the power AdWords has begun to wields within the marketing world. OK this person is correct in one sense; Google has no want to build the cost heavy structure which hangs around Radio's neck like an anchor today (massive sales and talent organizations). No, Google prefers to build a scalable/measurable platform were millions of users can purchase and measure media. Google saw the numerous competitors in the space for traditional radio (numerous remnant providers and don't forget they still own DMarc) and where technology is taking the audio marketing medium. Sure they played in it for a while but this was to learn the industries inefficiencies and perfect their rich media spiders as mentioned in my prior post. This time allowed Google to measure the power of Radio on search and begin their funding of the WiMax revolution that will see streaming radio become the ubiquitous consumption standard. Even better for Google this standard was measurable and could be localized. As the final kicker Google would be the provider of the bandwidth backbone to supply this mass accessibility platform, with the caveat that their partnership wins the WiMax war.

So what, you say? Here is the What in my humble opinion; Google will build a streaming platform that is a snap in piece to AdWords. This platform will allow for sliver-casting, hyper-local targeting, and psychographic profiling of audio ads all while being able to measure in one dash board (AdWords). But here is the bigger kicker; once this is made public, overnight Radio will have hundreds of new competitors. What is to stop every agency and individual company to begin insertion of their own audio ads without the help of traditional Radio reps? In reality Google's announcement means that Radio will lose a remnant supplier for the near future but in the long term will create thousands of new competitors because of the predicted Google platform. The only remaining leg for the industry will be the creation of audio content and ads. The content (DJ talent) will see the same revolution that is sweeping music currently in a measureable and online world (death of music labels and the rise of artist direct to public models). This leaves audio ad production which by itself will not be able to sustain the massive overhead currently harnessing the industry (this does not even take into account all the obsolete capital investments Radio has like towers, satellites, etc....).

Radio has to begin to see this or else another percentage of every dollar will be shaved away leaving it liable for takeover and/or demise. It/we need to begin to invest in our own platform to trump Google, invest heavily in online platforms that keep their audience engaged in more than just the audio, and learn how to sell the digital assets in a public marketplace. No question audio marketing has a long history in front of it but the question today is will this be with the same players that dominate the space today.