Google’s Offline Moves

WSJ writes about Google’s acquisition of dMarc Broadcasting Inc., which “runs an online system for advertisers to buy radio airtime.”

Most people think of Google as a place to go to gather information. But in a business sense, Google operates as a huge clearinghouse for advertisers. At the heart of Google’s advertising operation is an automated system that auctions off the right to place advertisements on its search-results pages when an Internet user types in certain key words. Most of its advertisers simply log into the system to place their ads and make their bids. They pay only when someone clicks on the ad. Google also brokers the sale of ads that appear on other Web sites — sometimes tied into key words and sometimes not.

The radio deal is the latest of a series of recent moves by Google in which it aims to bring its Internet advertising expertise to bear on old-media markets. Since last year, Google says it has been placing ads on behalf of advertisers in three magazines and the Chicago Sun-Times newspaper. And Chief Executive Eric Schmidt late last year acknowledged in an interview that the company is considering extending its ad system to TV advertising as well.

At the core of Google’s foray into offline-media advertising is its realization that traditional media such as newspapers, TV and radio remain vastly larger ad markets than the Internet, despite shifts to the Web in recent years.

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Rajesh Jain

An Entrepreneur based in Mumbai, India.