Google Shuts dMarc

I never understood Google buying dMarc, or the price they paid. $102 million up front, with an earnout estimated at more than another $1 billion. The company was a sort of automated rep firm for radio, with about 700 stations in their network and selling primarily remnant inventory for low prices.

The idea was solid. There are thousands of radio stations and thousands of advertisers. Creating a clearinghouse would create huge efficiencies, especially if it was an electronic clearinghouse with data that would help advertisers automate their demographic and contextual targeting. There was a chance that dMarc could get some scale and start generating some real revenue. But it was way too soon to tell.

Google’s optimism came from their belief that under their guidance dMarc’s would grow like AdWords did. But dMarc had a scaling problem Google never had: they employed salespeople to explain their system to advertisers. This was the way it had to be done in the old media: customers were larger organizations used to being catered to, and the sales cycle was long-ish. The advertisers didn’t or couldn’t be treated like AdWords customers. The ‘long tail’ and a commissioned sales force are incompatible. Google’s optimism turned out to be hubris. Google’s attempt to automate the sales effort gutted the revenue and they never recovered.

Google announced they were shutting down radio sales last Thursday.