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Google: Great at Creating Advertising Markets, Craptastic at Entering Existing Ones



myspace graphicsIt shouldn’t come as a surprise that Google is shutting down its radio advertising business–especially if you’re a regular reader.

When reading the WSJ’s account of how Google failed to penetrate the radio ad business, I almost dismissed the story–after all, we’ve already talked about its demise. Then I started thinking–which often kicks in after my 2nd cup of coffee–and realized a common theme.

Google’s a star, when it comes to creating markets, but fails miserably at shaking-up existing ones.

This says it all:

But media-buying agencies, fearing Google’s technology would put them out of business, were a tough audience. Google refused to create bundles of spots and negotiate prices ahead of time, which was how radio was generally sold, say people familiar with the discussions.

Google failed on two counts:

  1. It could not penetrate a sales channel that had worked well for decades, i.e., agencies.
  2. It could not penetrate a sales model that had worked well for decades, i.e., bundled ad slots.

And it’s not just radio ads, is it? Google’s pulled out of print, and appears to be struggling with TV–both have established sales channels and models.

I know we’ve talked about Google being a one-trick pony, but that may be a little too harsh. Could it be that Google is only destined to achieve success when it creates a new market–or enters a nascent one? Sure, Yahoo (Overture) were first to paid ads, but it was Google AdWords that set the baseline. AdSense was the first substantial model for contextual advertising–so another major hit there. Aside from that, Google’s struggled to achieve major success with any mature marketplace.

What do you think? Will Google have any success muscling into a mature market on the premise that it can offer a better solution with its automated ad model?

  • http://www.thisismyurl.com/tutorials/marketing/25-things-to-do-to-increase-your-website-traffic-right-now/ Christopher Ross

    So what I’m reading here is that Google failed because they refused to do things the way people assumed they should be done? Awesome. What I find funny about their approach in this endeavor is that they believed thousands of people across the country would embrace a radically different technology that could force them out of work while presenting little to no significant improvement to their lives … that just doesn’t sound like Google yet it’s what they appeared to try.

    Christopher Ross’s last blog post..By: LT

  • http://www.nickstamoulis.com/seo-consultant.html Nick Stamoulis

    I think what Google is starting to realize as they shut down ideas and ventures is that they can’t put their hands in anything they want and turn it into gold. Some things, yes but not all.

  • http://www.newhomessection.com Jayson

    Nice title –

    it seems like they do have a more difficult time trying to change things, but that could just be because those things aren’t broken. I have been hearing more about Google TV from people outside of “net” circles and was becoming convinced that they’d gain traction after sometime.

    Some things may be too expensive to trust with automation…at least for now. It might be that they need someone else to help facilitate much of what goes on whereas with AdSense and AdWords, a publisher and advertiser can see results without needing a professional’s assistance.

    I imagine they’ll need to automate the production side of TV and Radio spots, print ads too, if they ever want to get great results.

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