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Updated: read below: Looks like “disruptive” may be the most deserving buzzword for the year … Google is entering the radio ad realm with the acquisition of dMarc Broadcasting a digital solutions provider for radio. As Google explains it in the press release, dMarc connects advertisers directly to radio stations through its automated advertising platform; the company’s tagline is “innovation through automation.”
The deal, expected to close this quarter, is material enough to require financial details from Google, which is paying $102 million cash in “total upfront consideration” for the privately held Newport Beach company. If product integration, net revenue and advertising inventory targets are met over the next three years, the sellers could make as much as $1.136 billion.
The goal: integration with Google AdWords to create “a new radio ad distribution channel for Google advertisers.” Tim Armstrong, VP-Ad Sales, Google: “We anticipate that this acquisition will bring new ad dollars and accountability to radio by combining Google’s expansive network of advertisers with dMarc’s talented team and innovative radio advertising technology.”
MarketWatch: According to UBS analyst Ben Schachter, dMarc’s media networks division currently works with more than 500 stations, and it’s been adding more than 50 per month.
Some back history on dMarc, from WSJ: dMarc Broadcasting was formed in 2004 by the combination of Scott Studios, a developer of software used by hundreds of radio stations, with the broadcast assets of dMarc Networks in a transaction valued at $29 million. It is run by Chad and Ryan Steelberg, who serve as CEO and president, respectively. The brothers are Internet entrepreneurs who previously founded AdForce, an online advertising firm acquired by CMGI in 1999 for $500 million in stock, and Broadband Digital Group, a now defunct provider of free broadband access.
Rafat: Keep in mind the ultimate pay price might be more than what Google paid for AOL…that certainly puts things into perspective.
Updated: Greg Sterling: This is the first major “public” statement that Google intends to be a kind of one-stop shop for its advertisers. Spot Runner, the local cable buying service…is a similar example of a kind of company that we would expect Google to also want to acquire–or at least a similar capability–to extend into TV.
B2Day Blog: Slight flight-of-fancy, but still: “Another possibility here is Google serving radio ads over the Internet in conjunction with paid-search text ads. Imagine clicking on a play arrow icon next to the ad and getting a streamed audio commercial.”