Brad Beckstrom “Google should have explored using text messaging to gauge user response to radio spots. Many stations are using it to add a third dimension to radio allowing consumers to opt in to offers they want to receive by texting a keyword.”
From WSJ.com Google Chief Executive Eric Schmidt, in a brief interview, said the radio effort failed because Google never came up with a good way to measure listener response. On the Web, he explained, Google can charge advertisers based on performance — that is, how many times users click on an ad.
“With an enormous data corpus, our computers can do the math really well,” he said. “But in the audio case, there wasn’t a good signal back to us about which ads performed.”
Google Inc.’s foray into selling radio ads was supposed to show how its online-advertising brainpower could revolutionize an old-fashioned people business.
The company teamed up with Chad and Ryan Steelberg, brothers who were sharp dressers and wore deep Southern California tans. They had a technology for transmitting, scheduling and tracking radio ads. “Google is going to conquer radio,” boasted the exuberant Chad in 2006.
Instead, radio tripped up Google. The company is pulling the plug on its attempt to automate radio-ad sales on May 31, exposing how far Google is from its goal of grabbing a big chunk of the multibillion-dollar business of off-line ad sales.
A look at what went wrong shows 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.
The radio venture was relatively small for Google, and the company remains an overwhelming success in the ad game: It sells about one-third of all online ads in the U.S., by dollar amount. But its rare flop in radio has larger implications. Google has been on a mission to extend its wildly successful model for selling ads linked to Internet searches to traditional media such as print and TV. Now it is beating a partial retreat. This year, it also shut its newspaper ad-sales effort. Its remaining toehold in traditional media is an effort to sell TV ads.
In a statement, Google said it had “devoted substantial resources” to developing radio and print ads, but the resulting products “didn’t have the impact we had hoped for.” A Google spokeswoman declined to elaborate.