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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?

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  1. [...] think that Google would have already learned a valuable lesson from recent failures: not everything can be solved by an algorithm. Does Google really believe that its new algorithm could have predicted–and [...]