• by Erik Sass  @eriksass1, April 17, 2007

In gaining access to 5% of Clear Channel Radio's ad inventory, including a cross-section of premium "drive time" and less valuable "remnant" space, Google scored a radio coup that may jump-start its sluggish Audio Ads business. But the success of the deal relies on a big unknown: Will advertisers go for a system where they can't pick which stations they advertise on?

This provision is actually standard to the Google Audio Ads service, which seeks to protect stations' identities from ad clients. Until now, Google's dMarc ad-serving system has trafficked almost entirely in undesirable "remnant" inventory. Given market dynamics, if advertisers know which stations are selling remnant inventory at bargain prices, they could put pressure on stations to lower prices on premium stock.

Google's promotional brochure for Audio Ads explains: "To protect your local card, we do not allow our advertisers to buy/target specific stations. Likewise, we do not disclose your rate-card information or guarantee placement on any specific station." Instead, Audio Ads allows advertisers to make "demographic" buys targeting local, regional and national audiences--using general categories of station content, such as urban contemporary, country, easy listening, and talk.

Most established advertisers will probably find the system imprecise, since it's standard practice in the industry to target specific radio stations. But Google is gambling that smaller advertisers, which are new to radio, will find demographic targeting effective enough to become long-term clients.

Maribeth Papuga, senior vice president and director of local broadcasting for Mediavest, says "the initial effort was always to bring in new advertisers, people who may not have tried it before." But for both established and first-time advertisers, the big risk "is just not knowing what you're getting." She warned that first-time advertisers will need to see results immediately--and could quickly dismiss radio if they don't.

While Papuga took a wait-and-see stance on Google's prospects, Bill Figenshu, COO of competitor SoftWave Media Exchange, was quick to attack Audio Ads' provision for station anonymity. Figenshu predicted that advertisers--new and established alike--will find it too difficult to measure ROI.

"If an advertiser can't pick specific stations, how will they be able to evaluate what is working, and what is not?" Figenshu asks. "Even if a campaign is successful, how would you know what works, when you don't know the station it worked on?"

Papuga imagined one possible workaround for Google Audio Ads. Equipped with a list of participating radio stations, advertisers with enough time and interest could collect and analyze data about local-market demographics, then guess which stations will air their ads. They could simply note which ads are appearing where, and over time, try to deduce patterns relating price to specific placement. The flip side: The buyer will also try "to determine if there's a better value equation in going to buy it individually" from specific stations." In that instance, she says, Google would lose out.