KEY POINTS:
Web search leader Google has broken into radio with a multi-year advertising sales agreement with the largest US broadcaster, Clear Channel Radio.
The deal, long anticipated by the radio industry, marks the progress Google is making as it expands into offline media, not just in radio, but also
television and newspapers - even in the face of resistance from some traditional media players.
Last week, it revealed a parallel deal to supply satellite TV broadcaster EchoStar and its 13 million viewers.
Clear Channel said it has agreed for Google to sell a guaranteed portion of the 30-second spots available on its 675 radio stations in top US markets, in a bid to expand the universe of local radio advertisers to Google's online buyers.
Financial terms were not disclosed. A Clear Channel executive said Google has access to less than 5 per cent of the radio broadcaster's overall inventory of advertising air time.
The US radio industry generates US$20 billion ($27.07 billion) in annual sales.
Through Clear Channel, Google Audio Ads promises to offer advertisers national distribution across all top 100 US radio markets, enabling them to reach specific audiences, throughout the day, including prized "morning drive-time" slots, in targeted local markets.
Clear Channel attracts up to 20 per cent of US radio sales and draws 110 million listeners. Formats range from rock to all-talk to easy-listening, 24-hour news, Christian and jazz.
In a joint statement, Clear Channel Radio said its national and local sales forces will continue to focus on the company's most lucrative advertiser relationships, and on advertisers who seek specialised ad packages. Google will focus on advertisers who run ads online but who do not yet run ads on radio.
"By making radio more efficient and measurable for online marketers, this is a way to further activate their marketing efforts," said Charlie Rahilly, Clear Channel's executive vice president of operations and negotiator of the Google ad deal.
A year ago, Google telegraphed its ambitions in radio when it agreed to pay more than US$1 billion for dMarc Broadcasting, which links advertisers to radio stations through an automated ad buying system. DMarc is the foundation of Google Audio Ads.
Google counts hundreds of thousands of web-search advertising customers, many of which have never used radio for marketing, according to Drew Hilles, the former head of advertising sales at dMarc, who now runs Google radio sales.
Google is also talking to other radio broadcasters, but Hilles declined to comment on whether they included CBS, another big US radio player, or satellite radio broadcasters. "Clear Channel is the benchmark relationship in radio," he said.
For Clear Channel, of San Antonio, Texas, the deal opens up an additional sales channel online for its 5200-strong sales force and potentially new revenue by reaching advertisers who previously have not marketed on radio.
- REUTERS