Why Google failed with Radio from the station level


Rick Guest, President, East Texas Radio Group, a Google Radio customer for 2 ½ years, tells RBR that as one of the earliest partners with dMarc (subsequently Google) in this program, he said the Google offering was fine in the beginning and that the service was not as expensive to stations as we had heard. However, he brings some great insight to the table from the station level as to why a change in policy and lack of interest in getting feedback from stations sent the whole thing into a spiral.

“The box and the service were not expensive. The automation system installed by dMarc to allow the company to reach into our inventory was bartered. The service charge was a sharing of revenue that required no order, no affidavit, and no invoice. The system was totally hands-off. We received a check at the end of every month in a timely fashion. 2) We provided dMarc (subsequently Google) with prime inventory to sell not just remnant inventory. 3) Google never got close to selling the rates we could sell our inventory for locally. Google rates were always less than 25% of our local seller’s rates and then they kept 50% of the order as their share. 

At the peak, we were receiving between $40K-$50K per month as our share of the dMarc/Google experiment. We were very happy with the partnership.

However, about this time last year, with no advance warning, says Guest, “Google announced to us that they were going to ‘change the way Radio is bought to more closely represent their internet selling model.’ In their arrogance, they believed that they could force advertisers to buy Radio the way Google wanted them to buy. This move was a total failure. In less than 3 months our group went from billing $40-$50K a month to less than $1K. We had just finished budgeting for the year with the Google revenue projections in the budget.  You can see what a devastating effect Google’s surprising move cost us in 2008. Not once did Google seek our opinions or suggestions on anything related to this program. They may have taken counsel from other broadcasters but we never felt like a true partner in the deal.”

He adds, “It is my personal belief that Google used Radio as a guinea pig to hone their skills in how to sell their in-house webcast audio network. Now that they have learned everything they need to know from Radio, Radio is unceremoniously tossed in the trash.”

RBR/TVBR observation: It was said a few years back when a number of companies were trying their hand at entering the ad sales biz from different angles and the competition was hot. One executive said it the best about Google entering into the ad sales business with this question:  I ask you for a one word answer when I say “Google.”  Your answer: “Search.”

Google will now need to market their new efforts or it will just remain “Search.” RBR recently mentioned this situation to a Google representative when their marketing budgets were cut. Well guess what — it is what it is.