Death of the rep business as we know it?
Indeed, as we mentioned in Radio News, the deal with Google may be an 800-lb. Gorilla in the making - - Google sees radio as 14,000 candy stores spread out all over the country. The thinking may be there is no reason to have a national sales organization like Interep or Katz. And this can all be automated. Advertisers/agencies may go direct for their buys. You go onto Google, you find WRQX midday. How much can I buy it for? Here's your audience delivery. All automated. So a buyer in NYC wants to make an 18-34 Women buy. Show me all the stations that have a 1 rtg. or better throughout the 300 counties surrounding Washington, DC.
However, don't most stations have agreements in place with companies like Interep and Katz for much of their inventory? It certainly looks like Google will bring the transactional business beyond dMarc's remnant inventory abilities with its AdWorks platform and host of online advertisers.
Chad Steelberg, dMarc CEO, insists, "We're not about and we never have been about remnant inventory. For us, we look at this as more of a yield management and automation function bringing much-needed technology to the radio broadcast industry. And really embracing a segment of advertisers that heretofore have not had the capability to advertise and participate in the radio world because of the existing sales channels that are there. Rather, we're building a technology solution that can help manage all of that inventory and be complimentary with the existing sales forces that are out there."
He adds the advertisers that may jump on board spans the entire gamut-from micro-local advertisers who heretofore have never advertised on the radio because of "not having enough budget to warrant a phone call back from a radio station sales rep all the way to the national advertisers who are looking to manage their radio buys in a more efficient and automated manner. Advertisers can go directly to the stations now. It will be much easier."
Marc Guild, Interep's President/Marketing, tells RBR/TVBR that to date all of the radio station owners he's talked to will be up in arms about this. As well, isn't this inventory already represented by the rep firms? "Contractually, it has to go through Interep," he says.
What about when the contract runs out and stations want to sell the Google/dMarc ad buys direct? "I'm sure we will have to fight it," Guild predicts.
Regarding advertisers transacting directly with stations for inventory that would have been repped by Interep or Katz, Tim Armstrong, Google VP/Advertising Sales, tells us his company has a very similar business on the Internet where there are both people who sell directly and third parties involved in the process. "And we've been able to build what really equates to a very large, healthy business for all constituencies that we deal with. I think the best premise...is to do things that the customers want to do themselves. For the market to be its most healthy, it's an ecosystem. The bottom line is the ecosystem has many different components of it. The tools that dMarc and Google have allow for different groups of people to use them in different ways. That may be third parties, it may be people directly. Instead of a zero-sum game where people feel they may or may not benefit from this, I think you will see a growth of the overall ecosystem."
Eventually, Google and DMarc will be connecting their ad networks together and give advertisers the ability to see both web inventory and radio inventory that could be impactful for them. They will be competing with Westwood One, Premiere, Katz, Interep, etc.
Good Morning - Gain a personal edge on today's business day. Are you reading this from a forwarded email?
