dMarc Broadcasting

» see dmarcbroadcasting.com as it lived, on the wayback machine

~ the obit ~

dMarc Broadcasting was founded in 2002 in Newport Beach, California, by chad steelberg and ryan steelberg. the steelberg brothers had already sold one company. AdForce, a web advertising platform they started in 1995 in Costa Mesa, sold to CMGI in 1999 for $500 million. dMarc was their second act, this time aimed at the terrestrial radio inventory market. the pitch was an automated system that connected advertisers directly to radio stations and handled scheduling and delivery without a salesperson in the loop.

google announced the dmarc acquisition on january 17, '06 for $102 million in cash plus an earnout that could reach $1.136 billion across three years if certain product-integration and revenue targets hit. the structure was unusual for google. most google acquisitions of the era were straight cash with no contingent payment. the earnout shape suggests google was buying with one foot in the door on whether the radio business would scale.

it did not. radio stations and the conglomerates that owned them never gave google the advertising inventory it needed. the industry read the google move as a takeover threat and slow-walked everything. by february 12, '09, google publicly announced it was pulling the plug on google audio ads. operations wound down through the spring. forty employees were laid off. the dmarc brand disappeared and the google radio automation software was sold off to triton media a few months later.

~ the rap sheet ~

~ how it landed ~

the steelberg brothers stayed at google through 2007. chad steelberg ran the radio division and ryan was on the same team. the press at the time read like a victory lap. the brothers had cashed a $102 million check and kept their jobs at the most prestigious tech employer of the decade. google's distribution muscle now sat behind their automation platform.

google's confidence was loud. eric schmidt told analysts in late 2006 that radio could be the next adwords-shaped market. the company hired hundreds of radio sales reps. it cut deals with terrestrial radio groups to buy unsold inventory in bulk. inventory it would resell to advertisers through the dmarc-derived automation system.

~ the cracks ~

the radio industry never bought the pitch. clear channel, the largest US radio operator at the time, gave google only a sliver of inventory. cbs radio negotiated but the relationship stayed shallow. the conglomerates were worried that letting google price their inventory would commoditize the entire ad-buy stack the same way it had commoditized newspaper classified ads. they were correct to worry, which is why they kept their distance.

by mid-2008 the google radio division was visibly bleeding cash. eric schmidt was already walking back the radio bet in earnings calls. the financial crisis hit in september 2008 and any remaining tolerance for money-losing experiments inside google collapsed inside one quarter. the shutdown announcement came on february 12, '09, with the operations winding down by may.

~ how it ended ~

the contingent payment never vested. google paid the $102 million up front. the $1.1 billion earnout structure required hitting integration and revenue milestones that never came close. the steelberg brothers stayed at google for a while after the shutdown but eventually left. the dmarc brand was never revived. google radio automation, the rebrand of the dmarc software, was sold to triton media group in 2009 and continued life there outside the google portfolio.

i was not following the US radio ad market in this window. terrestrial radio in turkey was its own regulatory and licensing universe with no exposure to whatever google was doing in clear channel inventory. but the dmarc story showed up in the 2010-2012 tech press anyway, as the famous google-overpaid-for-an-industry-that-would-not-cooperate cautionary tale. it sits beside google answers and google wave in the catalog of bets google made and walked away from when the market did not bend.

@}-->--

              )
             (_)
            .-'-.
            |   |
            |   |
            |   |
            |   |
          __|   |__   .-.
       .-'  |   |  `-:   :
      :     `---'     :-'
       `-._       _.-'
           '""""""

« previous  ·  random  ·  next »