April 16th, 2007
Why Google will NOT rule the world!
Google has billions to spare, but not unlimited billions.
As of Friday, its cash reserves took a $3.1 billion hit, with an IOU to DoubleClick to “substantially reduce competition in the advertising market on the Web,” in the perhaps soon to be immortal words of Microsoft general counsel, Bradford Smith.
Microsoft contends that a Google-DoubleClick marriage will have a stranglehold on the market for distributing ads to Web publishers, so says The New York Times.
No new stranglehold on the market for distributing ads to radio audiences in view in the just announced Google-Clear Channel sales alliance, however.
The official Google press release puts a Googley spin best case scenario forward, forecasting a bigger radio advertising pie for all: “Clear Channel and Google will jointly drive radio advertiser expansion.”
Really? According to the release:
Clear Channel Radio's national and local sales forces will continue to focus on the company's most lucrative advertiser relationships, and on the many advertisers who seek specialized advertising packages and concepts. Google will focus primarily on advertisers who currently run ads online but do not run ads on radio.
As I underscored earlier, if Clear Channel really believes Google is “best-in-(sales)class,” why is it only opening up a 5% resale allotment?
Google is, in fact, positioned solely as a sales agent reselling Clear Channel inventory, a micro portion of it.
But, what happened to Google revolutionizing the radio advertising industry, the unbeatable increased accountability and targetability of Google technology claimed? Both Google and Clear Channel actually extol Clear Channel’s existing “dashboard” capabilities, noting Google’s platform will be compatible.
Google CEO Eric Schmidt: "Clear Channel is the market leader in delivering radio value to consumers and advertisers and has built an innovative platform to manage its on-air ad inventory.”
Clear Channel reiterated its own proprietary “best-in-class” radio ad sales : "We created a number of special positions (such as first-in-pod and islands), new and innovative spot types (adlets and blinks), unparalleled creative resources (the Creative Services Group), and fresh combinations on-/off-air/online packages. These efforts have produced many new advertiser alternatives and steady gains in revenue yield-per-minute. Using our Viero System, we already enable sales managers and sellers to dynamically evaluate and price inventory. Clear Channel Radio and Google today have enabled Viero Systems and AdSense for Audio compatibility."
How will Google seek to resell the Clear Channel time it is allotted via AdSense for Audio? By adding an Audio Ads button to AdWords self-serve consoles, most likely.
Google’s AdWords prime national accounts, however, will undoubtedly not be shown such an Audi Ads “button,” as they would also represent “the most lucrative advertiser relationships” that Clear Channel is guarding for itself, off limits to Google Radio.
So, no Google is a monopoly cries to antitrust regulators on this deal!
If Google wanted to commit some more billions on the other hand…
Google, of course, can not buy out the entire world’s advertising market, especially when its offline initiatives are not helping fuel GOOG. SEE: Google Radio: Can Clear Channel REALLY save it?
ALSO: Microsoft to Google: Play fair with your billions and Microsoft vs. Google: Crazy acquisition strategies? and Google: $3.1 billion cash for Web monopoly!
