Google's Radio Advertising Gaffe

Last Tuesday's Wall Street Journal carried a lead story describing Google's failed attempt to change and dominate the business of radio advertising.

The tale contained a lot of surprisingly predictable, believable anecdotes concerning the lack of fit between the slick, shallow brothers who ran the ad placement business Google bought, and the larger online firm's own more cerebral staff. Just reading those stories, you could see a crack-up in the works.

But what was perhaps most revealing was Google's steadfast belief that, because they could technically accomplish radio ad placement and effectiveness measurement, buyers would flock to it and simply conform to Google's plans.

Well, first, like every other advertiser since Marconi's day, Google found that they couldn't actually measure the effectiveness of radio ads. They had estimates, models, and surrogates. But their customers, the radio stations and their clients, quickly saw through the charades.

I was rather surprised Google proceeded to even buy the Steelberg's little business without having completely doped out and built the complete feedback-loop of electronic ad placement, measurement and delivery of effectiveness results. Apparently, the firm got caught up in the ability to automate bidding on radio ad time, neglecting to note that, in many cases, prices would fall, not rise. The net effect for most stations was to face a loss of total net ad revenue.

It's hard to believe Google didn't see that coming, because, just reading the Journal article, that's the first thing I began to consider, as the story of the initial implementation of the Google-Steelberg system unfolded.

It's a sobering account. Here's a world class online firm stumbling on one of the oldest advertising challenges, in one of the most basic ways possible. That is, coming in from outside, buying a totally different type of firm, then combining the two to attempt to uproot, by force, the entire radio ad business. There were apparently never any pilot programs, focus groups with those who would be affected, or much of any attempt to design, share, trial, review, modify and re-release a new system of radio ad purchase and effectiveness measurement.

For all of Google's vaunted managerial excellence in its prior forays, it sure stumbled badly on this one.

Probably the silver lining is that Google closed the effort down in reasonable time. They didn't leave people hanging, continue the charade of changing the radio ad business, or redouble the failed effort in a similar fashion.

Instead, they sensibly reviewed the failure, and cut their losses soon thereafter.

Presumably, Google's Eric Schmidt would view this episode as characteristic of the company's philosophy of trying a lot of ways in which to leverage the Google brand and process. Some work, some fail.

You can give the company credit for at least trying and, when obviously failing, moving on.

Too bad our government and GM can't do the same and just file Chapter 11.