|Google Ventures Into TV|
By Peter Koeppel
Published: 5/07 Electronic Retailer Magazine
Google's entry into the TV marketplace started with a test on a small cable system in California
and now is expanding with a partnership with Dish Network. In their quest to offer one-stop
shopping for all forms of media, Google is trying to develop a TV advertising platform that
delivers targeted ads based on household demographics.
Google has stated it wants to deliver more relevant ads to viewers. To accomplish this goal, Google
might use a database of the demographics in a neighborhood and analyze programming being watched
by a household in that neighborhood and then insert ads that are relevant to that audience and
programming. So, for example, a household in an upscale area might receive an ad for a Mercedes
and a household in a lower income area might be sent an ad for a less expensive automobile brand.
Google and Dish will use an automated system for buying, selling, delivering and measuring
television ads. And within 24 hours advertisers will know not only what ads have been viewed,
but also where in the ad viewers have tuned out. Google feels that advertisers will pay higher
rates for these more targeted ads. (Media Post 4/3/07, WSJ 3/10/07)
The concept is really a direct response model. If you were to combine this model with traditional
direct response metrics, such as consumer response to the advertising, this type of system could
allow marketers to further improve the ROI from their DRTV campaigns. However, there are many
variables that could affect the success of this type of program for advertisers, such as whether the
media rates are too high to pay out and the type of media inventory that Google will have access to.
For example, with Google's radio program, the inventory they are offering to advertisers tends to be
on low ranked stations in outlying areas of the DMA's. It may be difficult for Google to access
more prime media inventory, because the larger, established players in the radio and TV industry
may be reluctant to hand over control of their inventory to Google. (NY Times 3/29/07)
Another possible advantage of this system is that Nielsen now only uses 10,000 monitors to track
viewing habits and the Google system with Dish alone will tap into data from 4 million set top
boxes. The ability to measure results in real time with such a large sample size could potentially
provide marketers with more precise data to analyze and adjust campaign performance.
(Media Post 4/3/07)
The potential of Google's automated TV system to deliver more targeted ads is intriguing, but the
program needs to be proven over time. So far Google's venture into radio and their purchase of
YouTube don't seem to be paying out. However, with over $10 billion in revenue last year, Google
has the resources to make these ventures profitable. Stay tuned.