Steve Rubel points to a ZDNet report on Google’s plan for a product “…that dynamically generates and changes a terrestrial radio commercial based on demographics and news/conditions in the local market. According to those who have seen the demo, if it’s really hot in one area, McDonalds can switch from their regular burger ad to one that touts their cool drinks and frozen treats. In addition, while most advertising campaigns require a $20,000 spend, the new Google solution would require a mere $200 minimum.”

I sure would like to see that demo.

And I’d love to know what Chris Anderson thinks of Google’s plans to sell radio advertising. In his book, The Long Tail, Anderson demonstrates a clear understanding of how advertising works:

“The traditional advertising market is a classic, hit-centric industry where high cost enforce a focus on the biggest sellers and buyers. The way it works is that an advertiser, say General Motors, has a marketing budget. GM commissions an advertising firm to create some ads and then a media buyer to place those ads in television, radio, and print and online.

Meanwhile on the other side, those ad-driven media have their own ad sales forces. they pitch the advertisers and their media buyers on the virtues of their advertising vehicles. If all goes well, millions of dollars change hands. All of it is labor-intensive and made even more costly by the expensive schmoozing that’s required in businesses where a lack of trusted performances metrics makes salesmanship and personal relationships key to winning business.

These days salespeople don’t just twist arms, they also serve as advertising consultants, informing advertisers about the most effective ways to use a given medium or brainstorming creative new approaches to getting the advertisers’ message out. That works well enough, but because it’s expensive, it imposes a subtle cost: a focus on just the largest and most lucrative of potential advertisers.”

Today, there are thousands of small Google advertisers who had never advertised anywhere before. Because of the self-service model, the measurable performance, the low cost of entry, and the ability to constantly tweak and improve the ads, advertisers are flocking to this new marketplace.”

It’s going to be interesting (Read: scary as hell) to see if Google can/will fundamentally change the way radio advertising is bought and sold.