Thursday, January 19, 2006

The Google dMarc Deal: How Many People Can Miss the Point?

As a former radio advertising salesperson it's interesting to read the flap about the Google-dMarc deal as they acquire a major ad infrastructure provider for the radio industry. However, I think that many of the pundits may have misinterpreted what Google intends to get out of the dMarc deal. As Google does with many of its better deals, they went for infrastructure, knowing what they can grow around it. Yes, the print ad experiment was kind of a flop, and yes, there's no way that a ClearChannel is going to kiss Google's toes for trying to help them manage their monopoly more effectively. But that's not the point. Google is buying the highways of commerce for radio, knowing that they lead not only to existing channels but new ones as well. Remember that Google is rolling out wireless networks as well nationwide. Wireless IS radio - just on other frequencies. Google will probably use dMarc to tinker with radio AdSense sales on a subsidized basis to keep the monopolies happy in the short run and to then have a perfect competitive network on broadband frequencies already in place. What happens on existing radio frequencies may be moot rather quickly.

The key to all of this is that Google thinks horizontally about content, as in our New Aggregation model, while most media companies think vertically. Google sees that it's better to own and manage discrete capabilities that can service a user base across all media channels than to try to own all of the channels. In today's media world, where users create a new weblog every second, you can't own it all anyway. So the whole inventory issue for ads is becoming meaningless. There's infinite inventory, with just a lack of facilities that know how to monetize it effectively. Media companies are like little city-states huddled against the edge of vast, untamed continents. Most either don't get the value of what's outside their gates or they want to turn it into a city. Google says forget that, let's just build the roads and own the traffic that takes them where they want to go. The radio model is being reborn via the Web into a much more healthy and robust advertising environment that will meet the needs of both advertisers and their audiences far more effectively.
Post a Comment