Monday, May 25, 2009

No Signal: Why Google Shut Down Radio and Print

In February, I penned a post pontificating about why Google ceased its Radio and Print operations -- Google Cans Print & Radio: And Then There Was One.

Last week, in an interview with Financial Times, Eric Schmidt offered some insight behind that decision...

"In both cases they didn’t work well enough. We measure our businesses very, very carefully and in both the print and the radio businesses we could not seem to invent or get enough of a signal back to make the network or value really spin – that’s one way to describe it. In our model what happens is as people click on ads and as they use our services we get all sorts of ways to improve our products. And with all that customer feedback we can make it better. But because of the unique structure of radio where it’s a broadcast to a relatively unidentifiable radio, there’s not very much information of what the radio is doing, and similarly for print ads, we could not get that signal. And that’s, ultimately, I think why we have moved on."

What really stands out to me here is this idea of a signal. Google needs a signal from its users to continually improve its products and, without that, it can't effectively add value.

I suppose this explains why it's proceeding with its TV initiatives. Tapping the satellite boxes enables a 2-way interactive dialogue and, thus, provides Google the signal it needs.

Importantly here, the signal is not just about measuring response. Both Google Radio and Print had built in systems to track response to ads. (Print even had those fancy bar codes.) Rather, the signal that Google needs is engagement with the ad itself.

This is the point I was trying to make in my post on the MediaPost Raw blog titled, "It Ain't the Blue Links." Google shouldn't/won't automatically rule out embedding display ads onto its search results pages just because it thinks they might annoy consumers. Instead, Google should/will test them out and see what signal comes back.

Red means stop. Green means go. It's as simple as that. Behold, the power of the signal!

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