Google Inc. today announced that it plans to branch out into the radio advertising business.
Google has agreed to acquire dMarc Broadcasting Inc., a Newport Beach, Calif.-based technology company focused on the radio broadcast industry.
“In the future, Google plans to integrate dMarc technology into the Google AdWords platform, creating a new radio ad distribution channel for Google advertisers,” according to the announcement.
DMarc connects advertisers directly to radio stations through an automated advertising platform. The platform simplifies the sales process, scheduling, delivery and reporting of radio advertising and allows advertisers to efficiently purchase and track their campaigns, according to the announcement. For broadcasters, dMarc’s technology automatically schedules and places advertising, helping to increase revenue and decrease the costs associated with processing advertisements.
“Google is committed to exploring new ways to extend targeted, measurable advertising to other forms of media,” said Tim Armstrong, vice president of advertising sales at Google. “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.”
“We are excited to be joining one of the most innovative companies in the world,” said Chad Steelberg, CEO of dMarc Broadcasting Inc. “We are bringing together complementary visions of simplicity, efficiency and accountability to the radio advertising process.”
The announcement states that dMarc customers will not experience any interruption in service.
Under the terms of the merger agreement, Google will acquire all of the outstanding equity interests in dMarc, a privately held company, for total up-front consideration of $102 million in cash. In addition, Google will be obligated to make additional contingent cash payments from time to time if certain product integration, net revenue and advertising inventory targets are met over the next three years, Google announced.
The maximum amount of potential contingent payments is $1.14 billion over the next three years. Since these contingent payments are based on the achievement of performance targets, actual payments may be substantially lower. The acquisition is subject to customary closing conditions. Google anticipates that the acquisition will close in first-quarter 2006. Substantially all of the payments will be accounted for as part of the purchase price for the transaction, according to the announcement.
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