Google has broken into radio with a multi-year advertising sales agreement with the largest U.S. broadcaster, Clear Channel Radio. Clear Channel said it has agreed for Google to sell a guaranteed portion of the 30-second spots available on its 675 radio stations in top U.S. markets, in a bid to expand the universe of local radio advertisers to Google’s online buyers.

A Clear Channel executive said Google has access to less than 5% of the radio broadcaster’s overall inventory of advertising air time. The U.S. radio industry generates $20 billion in annual sales. [USAToday]

“Google is finding some friends. There are plenty of critics of Google’s foray into radio — but we’re slowly seeing some group heads come out and say there may be a place for the Internet giant in radio sales. Regent tested the service in two markets and CEO Bill Stakelin says they sold “a tremendous amount of inventory” and the results “far exceeded our expectations.” He says the issue that remains to be worked out is pricing.

While Emmis CEO Jeff Smulyan says “if Google has the advertiser that we’re never going to call on at rates that make sense … then it’s business that we want to take.” Smulyan says Google’s efforts are especially welcome in “transactional” markets like New York and L.A. where radio has done a “marginal job” at attracting new advertisers.

Meanwhile — Border Media Partners CEO Tom Castro says many folks are focusing on HD and streaming. But the real technological breakthrough will come on the sales side. Castro says “it’s not very sexy — but it’s where we are going to make a lot of money in the future.” — INSIDE RADIO report from the Kagan Radio-TV Summit:

That’s the prediction of Google Audio national director of sales Drew Hilles tells Inside Radio “Our main goal is to draw new advertisers to radio” and when they do that’ll put pressure on inventory and result in higher rates for all buyers. The onetime CBS Radio exec says “our goal is to raise rates” and return the sector to double-digit growth. He says one way they help preserve a station’s rate card integrity is by allowing buyers to pick markets — but not individual stations. And Hilles says “stations have control of the throttle of how much of the inventory they open up or not.” Hilles says Google is working to attract some of its existing 100,000 advertisers who have found radio too tough to buy. Hilles says what attracts them is the “more Googley way” they sell radio that affords buyers more accountability and trackability. Google says “a large amount” of the advertisers are new to radio. [INISIDE RADIO]