“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]

Looks like Google’s plans to reinvent the way radio ads are bought has hit a rough spot. Online Media Daily reports Chad and Ryan Steelberg, the founders of dMark, an automated radio ad placement company purchased by Google in January 2006, have left the company.

The brothers resigned amid reports of growing tension between dMarc, the company they founded, and Google over differing approaches to radio ad sales. There was also said to be tension over the limited remuneration dMarc could expect under the performance-based terms of its original deal with Google.

Merrill Lynch broadcast analyst Jessica Reif Cohen expects Google will team with a CBS Radio in a wide-ranging advertising deal. In a nutshell, Google would allow advertisers to bid for radio airtime using some of the same functionality as its online sales tool. But again, no deal has been announced.

Cohen estimated that a Google deal to sell 10% of CBS Radio’s advertising inventory would generate approximately $200 million in revenues and that the upside for CBS would be two-fold: “1) attracting new (likely smaller) advertisers to its platforms a la Google’s experience with search, and 2) creating a more efficient sales model that reduces the friction/cost of selling advertising.” [LostRemote]

The folks at ZDNet’s Digital Markets have some PowerPoint slides that illustrates how Google Audio Ads work. And this from Voices.com:

“Google has positioned the Audio Ads system to serve both top-level advertisers, as well as the advertising agencies themselves. The graphic also shows 75% of the transactions coming from the agencies, and only 25% from independent advertisers. This is likely because advertising agencies already have media planning and media buying personnel, not to mention existing relationships with local and regional radio stations.”

The lables in the little blue rectangles are: Radio Stations, Networks and Rep Firms. Which suggests that advertisers will simply have another option for placing their ads on radio stations. And if Google can make it easier or cheaper or more effective (i.e. feedback, reports, etc)… they’ve added value to the process.