Google, dMarc, and Targeted Radio Advertising, Part One

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On today’s front page of the dMarc (internet archive link) web site, we see the message:

Google plans to extend targeted, measurable advertising to the broadcast space. Even as you read this, our engineers and executives are working to seamlessly integrate dMarc’s technologies and operations to offer AdWords advertisers a broad suite of digital broadcast options.

We’re left with questions about this such as when, and what will we see when this acquisition is complete?

Google’s Acquisition of dMarc

On January 17th, 2006, a press release came out giving notice that Google had agreed to acquire dMarc, which is a provider of digital advertising services for radio stations. dMarc appears to have built a strong infrastructure for connecting advertisers with broadcast stations. As the press release notes:

dMarc connects advertisers directly to radio stations through its automated advertising platform. The platform simplifies the sales process, scheduling, delivery, and reporting of radio advertising, enabling advertisers to more efficiently purchase and track their campaigns. For broadcasters, dMarc’s technology automatically schedules and places advertising, helping to increase revenue and decrease the costs associated with processing advertisements.

The challenge that Google faces with this acquisition is taking dMarc’s automated advertising platform, and merging it with its AdWords system so that Google’s wide range and a large number of web advertisers can also advertise on the radio.

The press release also informed us that dMarc will continue to serve the advertisers and clients that it had before the acquisition agreement and that Google would be required to make any additional payments over the next three years contingent upon achieving certain milestones towards integrating Google’s services with those of dMarc:

Under the terms of the merger agreement, Google will acquire all of the outstanding equity interests in dMarc, a privately held company, for total up-front consideration of $102 million in cash. Besides, Google will be obligated to make additional contingent cash payments from time to time if certain product integration, net revenue, and advertising inventory targets are met over the next three years. The maximum amount of potential contingent payments is $1.136 billion over the next three years.

The potential payout seems like it could be substantial. The stock standard language that comes from Google when they talk to investors is that they “will not go into a market were they don’t have an innovative edge.” In their presentation at the Goldman Sachs Seventh Annual Internet Conference in May, Eric Schmidt noted in regards to dMarc that “They are working on tools, and on building an advertiser base, so that they can launch later this year.”

What makes this innovative?

With a little more than three months left in the year, will we see an upgrade to the AdWords system that not only allows web advertising, but also the targeting, broadcasting, and reporting of advertising on the radio in realtime?

What is it about dMarc and their technology that Google thought might have been innovative, and that inspired an acquisition which would enable Google to unleash a new and creative advertising system?

I’ll write about that in more detail tomorrow in part two of this post while taking a closer look at dMarc’s intellectual property.

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