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Google Audio Faces Numerous Challenges

Google’s attempts to sell radio inventory have yet to attract significant advertiser interest, and the lack of success was highlighted last week when dMarc founders Chad and Ryan Steelberg decamped from the company.

Google Audio is struggling for a number of reasons. First, dMarc - before being acquired by Google - sold remnant inventory, or leftover air time that stations offload at a low price and at the last minute. For Google to be successful and make dMarc’s system attractive to advertisers across the board, it must prove that it has enough inventory, and that it can also sell premium inventory, MediaPost points out. And that’s a challenge for a number of reasons.

Station managers don’t want potential advertisers to know they are selling remnant inventory for fear advertisers will simply wait until the station is desperate before buying, so Google doesn’t allow advertisers to choose specific stations. That is a deterrent for most advertisers.

Radio stations are also hesitant to turn over inventory - remnant or premium - to Google because dMarc’s system automatically begins to sell remnant inventory at the end of every day. Stations have no oversight over what ads will be broadcast and, though in theory they have the ability to review and reject ads before they air, it is difficult to do so in practice.

The $75,000 price tag to install dMarc is also a deterrent, even for big radio stations that sell remnant inventory. Google does offer a barter deal, installing the system for free in exchange for a certain amount of inventory; however, radio stations then must pay a 50 percent commission to Google for several years.
Then, of course, there’s the natural fear among radio stations of losing control of their own accounts. (A Bear Stearns analyst warned newspapers that such a fear is justified with Google’s Print program.)
In the meantime, companies such as Bid4Spots, which offers a reverse-auction marketplace for radio stations to sell remnant space, compete with Google. The auction drives down prices for the buyer, and the company is growing by leaps and bounds. Currently, 2,300 radio stations sell inventory on Bid4Spots.