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.

Why would you go and do that?!?

If you read the About section I'm sure there are some of you that are shaking your head and about to click away (that internal voice is saying "this guy is an idiot, why waste my time?"). But before you go give me the rest of this paragraph. Here's a little secret, Radio is positioned very well for the digital age, the scary part; the opportunity is down right stupid. Radio reaches 96% of American 18-49 with a college education and an annual income of over $75K at least once weekly. Radio has been spun into the same traditional media sink hole as the other aging traditional media dinosaurs. Still think I'm crazy? Keep reading it will get good.

First we must ask ourselves why radio has become a medium of ubiquitous consumption? It's integrated into every facet of our lives and up till now had been the only information resource we had in an American passion that runs as deep as apple pie, the automobile. The radio for most Golden's and Boomer's was the device they heard many of the events that shaped their lives. This love affair with radio has not been radically changed despite the explosion of thousands of new devices vying for your "radio" time. 96% percent of adults 18-49 make time for radio in a world where many personal habits and/or patterns have been greatly compressed by the time crunch of our evolving(?) world. So to me this meant there was a legacy of being a health industry and it is woven into the culture of America.

Second thing that steered my decision; there is a revolution that is coming and could mean a renaissance for radio..... if some of the radio leaders can just reach out and grasp it (Why does Google keep sniffing around in Radio?). The revolution I'm talking about is WiMax. The FCC in March 2008 awarded Verizon and ATT&T control of the UHF spectrum when TV goes digital on February 17th, 2009. Additionally, Google spurned by their failed effort to acquire control of the UHF spectrum, joined with Intel, Comcast, Time Warner, and Bright House Networks in a joint venture with Clearwire & Sprint. This means in my humble opinion we are about to see a new race to blanket the U.S. and quickly there after North America with a comprehensive WiMax network. Why you ask? If you have not been paying attention there are two things of value online: 1) content and 2) user analytics. Whoever can provide Internet access to all points that TV does today creates a giant potential for information gathering that would be both vast and comprehensive. Now I'm sure there are those security nuts out there saying they can't keep data on you. I got big news for your, they can and do! Not trying to scare everyone and will tackle this topic at a different time; but to close this loop, while you were celebrating Scott Peterson going to prison I saw a landmark ruling that forever left Americans exposed online to the powers that be. But I digress, the point is that radio has an opportunity to seize this new delivery method. Many radio stations already stream their stations and pay royalty bills for this content delivery today. This meant to me that they had a toe in the pool and were on the right side of the law.

Last I saw a chance for greatness, not to be cheesy, but I saw an opportunity to make a big impact in an industry many critics have written off as dead or dying with their traditional media peers. I could not disagree more. In the future posts I'll outline why I think radio can win, what the hold up is, and daily challenges as they come about. For those of you still with me, thank you, and I hope you think me more sane then when you started this post.