I'm late to this news this morning … But Google makes another sort of local push … into radio, buying dMarc Broadcasting of Newport Beach, California. There's a reported downpayment of just over $100 million and more than $1 billion if performance targets are met over three years. dMarc is a media buying service and digital automation provider for radio. Here's how the company represents itself:
As the parent company of Scott Studios and Computer Concepts, dMarc boasts the largest installed customer base for radio automation and digital systems, spanning thousands of stations across all markets and formats. Scott Studios is the radio industry's largest digital air studio systems vendor in the US. Scott has a larger market share than the #2, #3 and #4 digital studio vendors combined. Computer Concepts, through its Maestro product line, is one of the radio industry's most popular digital audio systems vendors.
This is the first major public statement that Google intends to be a kind of one-stop shop for its advertisers. Spot Runner, the local cable buying service we wrote about last week, is a similar example of a kind of company—or at least a capability—that we would expect Google to also want to acquire to extend into TV.
Google reportedly plans to integrate dMarc's radio buying capability into AdWords, extending the platform into the "real world" and offering radio distribution (more geotargeting) to its advertisers.
This is a fascinating development, for its competitive implications and because it points the way to a kind of new integration of online and offline media buying. This will undoubtedly be a year for more M&A from Google and its competitors.
I was really skeptical of the Google $600 target, but if Google is able to extend into other advertising media it could well be justified as the company taps into more of marketers' spend.
Already we see two attempts at diversification this year from Google: video (pay-per-view/download) and radio. I would expect more such moves this year—and TV is definitely on the radar for Google.
Universal McCann's Robert Coen has projected that radio advertising will be worth approx. $16.1 billion in 2006.
Lots of additional coverage here.
Update: Spoke to VoiceStar about PPCall in radio advertising. The conversation was interesting for several reasons. Among them, we discussed how radio was both a branding and a direct response medium and how you need to use PPCall or call tracking to bring the analytics to the direct response piece of radio. Also, one question: How will the AdWords auction platform work with radio advertisers that are not used to that model?