Posted April 16, 2007 10:08 am by with 1 comment

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Since the end of last year, we’ve suspected that Google has been hard at work, trying to negotiate a big deal for its Google Audio Ads. Back in November reports surfaced that Google was looking to buy $1 billion in radio advertising from Clear Channel Communications.

Today, we learn that the deal has been signed and Google will now have access to around 5% of Clear Channel’s commercial time slots. While we have no confirmation on the value of the deal, we do know it will run for several years and include 30-second spots on 675 stations owned by Clear Channel.

It appears Google managed to ease any concerns that it would end up snatching away existing radio advertisers, by focusing purely on new radio ad buyers.

[John Hogan, the chief executive of Clear Channel] said that Google would bring new advertisers to his stations and would work with those companies rather than with Clear Channel’s existing advertisers. But, he said, the Google advertisers would have access to premium inventory — in contrast to some of Google’s deals with newspapers that are allowing Google to sell only leftover ad space. And, he left the door open for a broader deal.

So, it doesn’t exactly sound like Clear Channel was beating a path to Google. If anything, it looks like Google gave away a lot, in order to win that one big radio network to validate its audio ads. Let’s recap…

  • Google pays Clear Channel a rumored $1 billion for 5% of radio ads of the next few years.
  • Clear Channel gets to pre-sell ad space that would likely have gone unfilled anyway.
  • Google is not allowed to work with existing Clear Channel advertisers.
  • Clear Channel will let Google up-sell new advertisers to premium inventory (how nice of them).

Looks like Clear Channel held all the cards on this deal and Google gets to prove that once it has your technology, it doesn’t need the people who invented it, in order to make it work!