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RAIN 5/12: Wall Street Journal analyzes Google's stumble with radio

Posted on: 05/12/2009

WSJ: HOW GOOGLE FAILED AT RADIO

The Wall Street Journal gives front-page treatment today to the story of Google’s failure to break into broadcast radio advertising.

The article is titled “Radio Tunes Out Google in Rare Miss for Web Titan.” It tracks the series of events from Google’s initial moves into offline media in 2005 and its purchase of radio ad technology company dMarc in 2006 to the difficulties it ran up against with advertisers and broadcasters.

The author, Jessica Vascellaro, explains that Google “misjudged the capacity of its technology to work beyond the Web, and underestimated the human side of the business. Radio stations refused to turn over airtime to a computer algorithm that set prices far lower than their own rates. Big advertisers steered clear.”

Google CEO Eric Schmidt also pointed to his company’s failure* to create a way to gauge the effectiveness of the ads they sold. Google “figured advertisers would be eager to bid (in online auctions) based on the effectiveness of an ad, not how many listeners it was expected to reach.” But the company shut out potential buyers by refusing to create spot bundles and negotiate prices ahead of time.

In January, Google disclosed that it would pull out of radio by the end of this month. The company is still engaged in Internet radio however, and are reportedly conducting an “alpha test” on webcast advertising with tech firm Spacial Audio. Read more about that here.

Read the Google story in The Wall Street Journal here.

AIRSTREAM WI-FI RADIO DESIGN PUZZLES REVIEWER

SlashGear took a thorough look at the new Monitor Audio Airstream Wi-Fi tabletop radio (see earlier RAIN coverage here).

They found the sound quality to be on-par with other Monitor Audio products, but the bizarre design made for some drawbacks: “It prompts a few questions about which orientation it should be placed at: the layout of the display and controls would lead you to believe that they should face forward, but the silver knob is actually the aerial.” Read SlashGear’s full thoughts about the device here.

AUSTIN COMPANY THRIVING BY MAKING FM CHIPS FOR CELL PHONES

“Silicon Laboratories Inc. has been proving some of the doubters wrong about its FM radio chip family for a few years now. The chips have become hit products and a big revenue driver for the Austin chip company since 2006. They are used to turn cell phones into devices that can play radio programs,” writes the American-Statesman in Austin.

Apparently there’s a business in making FM radio chips for cell phones. Silicon Labs brought in $40 million in 2006, and the revenue from just the FM chip family is expected to top $100 million this year. One way some radio broadcasters hope to compete with newer media is to enable as many cell phones as possible with FM-reception. Several industry leaders have called for just that.

Read the entire story here.

KATZ MARKETING SOLUTIONS PICKS UP THREE VPS

Chris Hamer, Brian McElroy and Heidi Schulthess have joined Katz Marketing Solutions as senior vice presidents. Hamer will serve as SVP/Business Development in New York, McElroy as VP/Research and Schulthess as VP/Sales in Chicago. Hamer was most recently Managing Director at OakView Strategic Advisors, while McElroy was research Director with MediaVest. Schulthess was Midwest Business Development Director for National Cable Communications. For more, check out Radio Ink’s coverage here.



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