Multi-Channel Direct Response
Multi-Channel Direct Response
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.
Contact Us