I hate to resort to hyperbole, particularly when Google (GOOG) is involved. But Google’s announcement Tuesday that it was partnering on a trial with satellite TV provider EchoStar (DISH) to sell ads on EchoStar’s DISH network through an auction process could actually have some significant impact on how ads are bought and sold on television.
This news is important because despite all the buzz about how cool online video is, the Boob Tube still is a much bigger ad opportunity than YouTube. According to figures from research firm TNS Media Intelligence, advertisers spent $65.4 billion on TV last year.
And it’s clear that Google is eager to partner with more than just the nation’s second largest satellite TV company. It has the entire TV industry in its sights.
“Our partnership with EchoStar is important for us as we begin to offer a TV advertising platform broadly,” said Google chairman and CEO Eric Schmidt in a statement. “We think we can add value to this important medium by delivering more relevant ads to viewers, providing better accountability for advertisers and better monetize inventory for TV operators and programmers.”
With all due respect to my Business 2.0 colleague Owen Thomas, I think if Google can successfully take the targeted ad technology that works so well for online search and apply it to TV, that could be huge.
“This is really fascinating,” said Mark Fratrik, vice president with BIA Financial Network, a financial and strategic consulting firm for the media and communications industries. “If it brings in new advertisers, it could be really good news for the TV industry.”
The big networks and advertisers are already worried about the diminishing importance and effectiveness of the 30-second TV commercial. And to counter consumers’ growing penchant for fast forwarding through commercials with devices like TiVo (TIVO) and other digital video recorders, many marketers have been creating spots that rely more on entertainment value than actual brand promotion. I’ve argued that this approach is not going to work.
Google says it will use data culled from EchoStar to allow advertisers to target ads based on pertinent demographic and geographic groups. Google added that it will be able to report in a near real-time fashion how many times an ad is viewed and whether or not people watched the whole spot. Google is also working with Astound Cable, a privately held cable firm based outside of San Francisco, on the TV ads trial.
To be sure, Google’s entry into the TV ad business has the potential to drastically shake up the dynamics of the industry. And many media companies and advertisers fear Google because of its growing power and clout. Along those lines, a media buyer who asked not to be named said some big-name advertisers may be wary of Google because of the perception that it is an “arrogant” company. The buyer added, though, that Google’s system is likely to be more successful than a similar offering being developed by eBay (EBAY).
Another media buyer who asked not to be named welcomed the Google news, saying that there is no reason that advertising on TV shouldn’t be as accountable and efficient as it is on the Web. The buyer added that automating the TV ad buying and selling process would be good for almost everyone in the TV industry, even though it may lead to an overhaul of TV ad sales forces.
In other Google news, CNNMoney.com sister publication FORTUNE named Google as its best company to work for in 2007. But will that change following the news of a python on the loose in Google’s New York office? Perhaps Google should enlist the services of Samuel L. Jackson?
“I’ve had it with these [expletive deleted] snakes in the [expletive deleted] Googleplex!”
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Mikeee
