Google’s long-planned charge into the jealously guarded world of radio advertising is about to commence in earnest with a beta test that distills the ad purchase process into an application akin to buying online ads.

The Google Audio Ads service is currently in an alpha test stage, according to a story in Wednesday’s Wall Street Journal, with Google’s sales force selling ads on a limited number of radio stations owned by Emmis Communications and Greater Media.

Google has long sought to embrace local enterprises such as the corner hardware store, the local clinic, local car dealer, or dentist, and bring them into its rapidly growing advertising reach.

On Monday, Google signed deals with more than 50 national and local newspapers to beta test an online auction system for selling newspaper ads (see Google Delivers Newspaper Ads)

But Google’s method for selling radio ads is different from its newspaper auction of advertising space.

Google shares rose $5.40 to $477.97 in recent trading.

$102-Million Entry

In February, Google paid $102 million for dMarc, a company that has pioneered a radio ad marketplace to automate the ad-buying process and allow buyers to track their advertising campaigns.

Google recently began testing its dMarc-inspired Audio Ads system with ad-challenged XM Satellite Radio, the largest satellite radio firm in the United States.

Google executives insist that simplifying the radio ad-buying process and wringing out some of the costs will bring new advertisers into the fold, particularly smaller companies that find the current ad-buying process complicated and the ads expensive.

But there are concerns among radio professionals that Google will simply recycle the stations’ current customers at a cheaper rate and compete with their current sales forces or make their trained sales professionals redundant.

“Radio has always been wary of large advertising groups and media-buying firms that control the ad purchase and Google is no exception,” said Mark Fratrick, vice president of BIA Financial Network. “But Google does have the potential to expand the number of ad purchases, but on the other hand, the industry’s concern is legitimate.”

But making the sale process uniform and easier for companies that have not bought radio ads in the past would be an immediate benefit of Google’s entry into the radio market, Mr. Fratrick said.

“Buying radio ads could be tough for anyone new to the process,” he said. “What does CPM mean? What demographic matches my product and how do I reach them?”

Stuck on $20 Billion

The terrestrial radio industry has been stuck in a five-year rut. Annual ad revenue, the lifeblood of the industry, has remained just under $20 billion. The industry is witnessing an exodus of many of its key listeners as they turn to MP3 players and other forms of digital entertainment.

“Radio should be open to anything that would grow its business,” said Eric Murphy, president of Pop2Life, a New York City-based marketing company that has developed a text-messaging application that links radio stations to listeners on cell phones (see Texting Radio's iTunes Groove).

“They have been too slow to embrace technological advancement,” he added. “The only option they have to embracing Google is to come up with their own similar strategy, and if they don’t do either, they are going to remain where they are.”

The radio industry has not proven itself adept at popularizing new technology. It has been struggling to get the market excited about HD radio, its first major technological upgrade in decades (see Radio Seeks Retail Groove).

Mr. Murphy believes there is a kind of inevitability involved in Google’s move to simplify the radio ad-buying process, and the changes will happen with or without the active participation of traditional radio broadcasters.

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