Google Set to Acquire Radio Ad Firm

Google announced today that it plans to acquire dMarc Broadcasting for a $102 million up-front fee plus additional payments which may total as much as $1.14 billion over the next three years, depending on revenue, ad inventory targets, and success meeting product integration goals.

dMarc Broadcasting is a privately-held radio advertising firm which offers an automated platform to advertisers, streamlining the processor of buying, scheduling, and delivering radio advertising for advertisers, and making it simpler for broadcasters to schedule and place ads on their stations.

Google plans to integrate dMarc’s technology with Google AdWords to create a new advertising distribution channel for Google Adwords advertisers.

"Google is committed to exploring new ways to extend targeted, measurable advertising to other forms of media," said Tim Armstrong, Google’s VP of ad sales. "We anticipate that this acquisition will bring new ad dollars and accountability to radio by combining Google’s expansive network of advertisers with dMarc’s talented team and innovative radio advertising technology. We look forward to working together to continue to grow and improve the ecosystem of the radio industry."

News of Google’s dMarc acquisition comes just as Michael Ostrovsky, a faculty member at the Stanford Graduate School of Business, notes that auction systems for advertising keywords—such as those conducted by Yahoo and Google Adwords—may result in advertisers significantly overpaying for keyword-based advertising, and encourage sophisticated buyers to attempt to "game" the auction systems. Ostrovsky and his coauthors conclude that advertisers—if not search engine companies—would be better served by a system implementing a true Vickrey auction, which benefits participants who bid exactly what a good or service is worth to them.