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July 12, 2006

Google, dMarc Radio Advertising Product Unveiled

As reported by Donna Bogatin at ZD Net, Google has revealed how they'll integrate their Adwords approach with their acquisition of dMarc.

The application Google unveiled is very cool - dynamically generated advertising content based on local conditions. However, we're left wondering exactly how this benefits the advertisers in a meaningful way - that is, one that enhances the effectiveness (profitability) of radio advertising for radio advertisers. It is unclear how the example given of McDonalds (who is one of the largest radio advertisers) changing promotions from burgers to ice cream based on the weather will be relevant to many other advertisers, especially when those Google claims to be helping with this new program are the ones who only want to spend $200 on radio advertising.

B-schools everywhere warn students against one of the most common business mistakes: being "product-driven" verses "marketing-driven". "Product driven" means a company's starting point for new products is the product development team, who creates super-cool new products and then tosses them over to marketing to find a way to make money selling them. In contrast, "marketing-driven" starts with unmet customer needs, and then asks the product development team to develop products that meet those needs.

We've said this before in other posts. Radio's "business" is to aggregate a homogenous set of customers and deliver them to advertisers so advertisers can efficiently reach them with the right message at the right cost. Therefore, any innovation in radio advertising would need to do one of the following in a scalable, practical way: a) help aggregate more customers, b) enhance the homogeneity of those customers, c) reduce the cost of reaching those customers, or d) provide feedback that helps improve the responsiveness created by the message reaching those customers.

We're hopeful that it will become clearer how the Google-dMarc product enhances radio advertising effectiveness for radio advertisers. We'll be one of the first to jump on board when it does.

Posted by Jeff Small & Brett Astor at 01:31 PM | Permalink