• by Joe Mandese , August 2, 2006

In its biggest offline media play to date, online search giant Google this morning announced plans to begin extending the reach of its online search advertisers to the nation's largest satellite radio service, XM Satellite Radio. The deal is the latest development in Google's push to expand beyond the Internet into the traditional media marketplace, and follows a series of tests with print media and radio outlets.

The XM deal--which will be handled through dMarc, a radio advertising rep firm Google acquired last year--will give Google's AdWords clients access to ad inventory on XM's non-music channels. XM, the larger of the nation's two satellite radio services, has more than seven million subscribers.

As part of the deal, the companies said Google advertisers will have "a simple, automated way to reach XM's millions of subscribers nationwide." XM, in turn, will gain access to Google's large and small advertisers to offer relevant, targeted messages to their subscribers. The deal also signals a more aggressive advertising move for XM, a premium radio service that derives its revenues primarily from subscriber fees.

The companies said the deal follows months of trials and that the system is now in "full production" for dMarc's advertisers, giving Google's AdWords clients the ability to place both terrestrial and satellite radio spots beginning in the fourth quarter.

Details of the program were not disclosed, but the companies said it would utilize Google's technology to automatically schedule and insert ads across XM's non-music channels, adding that the system would decrease "the costs previously associated with processing advertisements."

The deal caps off a series of tests into offline media buying Google began last year to extend the reach of its targeted advertising capabilities into traditional media, and to utilize its technology to make traditional advertising vehicles more efficient. Google has been one of the companies pitching an ad industry task force exploring the development of an online trading system for traditional media. That effort, which is expected to be announced as soon as this week, is believed to have been awarded to eBay.

Why Google is making its play in radio when Madison Avenue appears most focused on making the process of TV buying more efficient isn't clear, but dMarc is believed to have plans to extend its electronic trading systems into television. Google acquired dMarc in January.