Google (GOOG) will make a big deal of its new arrangement to sell 5% of all of the ad inventory for huge radio chain Clear Channel (CCU). The partnership represents about 5% of the Clear Channel advertising available on 675 of its stations.
The deal may have two problems for Google. Clear Channel is only making 30 second sports available. The advertising that runs 60 seconds is out of bounds for the Google partnership. Advertisers using the longer format are eliminated for the potential pool of targets, cutting it considerably.
The other weakness of the plan is that it only gives Google access to one-twentieth of the total ad avails. At many radio stations, some advertising goes unsold and ends up being used for public service or sold off at the last minute at sharply discounted rates. There is no guarantee that Google will not be marketing against this low-priced inventory if advertisers figure out how to "game" the Google ad auction system.
The Clear Channel deal may look good on paper, but that may be as far as it goes.
Douglas A. McIntyre
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