Google kills radio ad service, may lay off 40

February 13, 2009 (IDG News Service) Google Inc. is abandoning its attempts to sell ads on broadcast radio, concentrating instead on its plans to make money from television advertising and online video sharing.

Google first tried to extend its Web-based ad-placement technology to the sale of audio advertising on broadcast radio in 2006 with its acquisition of radio sales network dMarc Broadcasting, but the business has not been a success. Now, as part of a broader plan to refocus on its most profitable and popular activities, it's pulling out of radio.

The company is looking for a buyer for Google Radio Automation, a business it set up to automate broadcast audio programming. And on May 31, it will close two services designed to automate the placement of audio ads, Google Audio Ads and AdSense for Audio, the company announced on its Google Traditional Media Ads blog. It expects to lay off 40 people as a result of the closure and move others to new posts.

In January, Google announced it would shut another traditional media sales division, Google Print Ads, at the end of this month. The service allowed Google AdSense users to place print ads in around 800 U.S. newspapers.

With its Audio Ads service, Google had hoped to make radio advertising more relevant to listeners and simplify radio ad sales.

Despite devoting substantial resources to the services, "we haven't had the impact we hoped for," Susan Wojcicki, vice president of product management, wrote on the blog.

Without the tight link between advertiser and consumer that Google enjoys online, where it can track each page view and click, the company found it difficult to measure the impact of radio ads and make them relevant to listeners.

That explains its decision to focus instead on online streaming audio, where it can identify more precisely who is listening to what, and on TV advertising, where systems to measure audience response are more developed than those for radio. It launched its own system for selling and scheduling TV advertising in early 2007.

Google is also renewing its efforts to make money from online video, allowing users of its YouTube video-sharing service to download some clips rather than stream them, in some cases for a fee.