[AF] Google, the new spot seller?

[Rich Wood]

------ At 12:38 AM 5/11/2007, Barry Mishkind wrote: -------

>It was interesting to note in todays Radio Business Report:
>
>"Other radio groups aren't lining up to emulate the radio inventory 
>deal that Clear Channel cut with Google. Both Cumulus CEO Lew Dickey 
>and Saga CEO Ed Christian, ruled out the auction idea for their 
>stations in their quarterly conference calls. Dickey called it 
>"highly risky" for broadcasters to turn over their inventory to a 
>third party for online auctions. In his view, the likely outcome is 
>that it will cause pricing to erode further..."
>
>Do you think the "auction" is the wave of the future for radio?

Probably not. I recall an earlier company that allowed advertisers to 
book spots online. Most of the inventory was distressed and would go 
unsold. I doubt the inventory for auction is morning drive in major 
markets. I also wonder if you can buy long schedules, since a single 
spot is useless.

Assuming the stations don't care about the quality of advertisers, 
this is likely to bring in very low end stuff. Think of SPAM on the 
radio. I would expect to hear more about "Bob" and the pills that 
stimulate growth in very specific areas of the anatomy.

I think the expectation that it'll bring higher rates is false. Ad 
agencies know the value of inventory and are unlikely to bid higher 
rates than they can get from the sales department. I haven't seen the 
agreement but I assume the stations retain some authority to reject 
spots for content and, where they care, production values.

I think Cumulus and Saga are right in rejecting the concept. Sales is 
one of the last areas of the business that requires actual face time 
with clients, especially on the retail level. In major markets, good 
salespeople can often get a buy that wouldn't be considered on the 
numbers, alone. The auction approach eliminates creative 
merchandising that brings the best rates. Good salespeople with 
relationships are always best, I think.

Rich