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March 12, 2007

Google Faces Challenges In TV Market

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The rumor mill is buzzing after VentureBeat speculated that Google may be readying an ad deal with the Dish Networks to provide targeted television advertising. Combine that rumor with the Wall Street Journal’s report that Google has begun testing its cable TV ad system in Concord, California, plus some recent comments made by Eric Schmidt and television advertising is starting to look very Googley. But do users and advertisers want it?

I’ve questioned Google’s ability to launch into traditional mediums before and the same question mark still looms large for me. I think their success will ultimately depend on their ability to target ads and the level of comfortableness users have with them doing that.

It’s worth noting that the current Concord test system isn’t using targeted advertising. It’s just an early test pilot for Google’s TV ad launch. For that reason, I expect it will as successful as Google’s launch into radio – which is to say, not at all. Without targeting, it’s just another ad system for cable TV and not particularly interesting.

What is interesting is the rumored Dish deal.

If the success of Google’s jump into the television ad space is dependant on their ability to target ads, then the Dish deal is their way to do that. As was not the case with dMarc, Google is (allegedly) pairing up with a company that would suit their needs perfectly — the Dish Networks is the second largest satellite company and their audience is already trained to disclose personal interests.

VentureBeat’s Matt Marshall notes:

"A Dish partnership is notable because of how interactive the Dish experience has become. Users already use keywords to search for programming, choose themes they like and create custom guides – all indicators of personal taste. Dish and Google might be able to obtain permission from users to exploit such information. Google could then work with any number of technology providers to help it automatically insert relevant ads into the programming."

Google has this set up perfectly: Find an audience who is already accustomed to using keywords to find programming, and then show them ads based on their particular interests. If they bite, the general masses may as well. If they don’t, it’s a lost cause.

One of Google’s biggest hurdles here will be the privacy issues it creates. To get more targeted ads, you have to allow Google and the Dish Networks to work together and combine the information they know about you.

I’m okay with this on a very basic level. I’m okay with Dish telling Google that I live in a single person household, and that I fall into a certain income and age bracket. But I don’t think this is the level of information Google really wants. That basic criterion won’t prevent Eric Schmidt from seeing those feminine ads that gross him out so much. (To be fair, you can’t blame Eric for being grossed out, girls are notoriously disgusting.) After all, Eric Schmidt is a married man. Google will have no way of knowing if it’s Mr. or Mrs. Schmidt watching TV. (Or will they? Maybe they know that Eric Schmidt watches Heroes on Monday nights at 9 P.M. and only show beer, car and commercials featuring Buffalo wings during that timeslot.)

I’m guessing that Google is going to want to know what I’m watching, how often I’m watching it and create some sort of television theme or community to put me in. They’re going to want to know that I, Lisa, a 24-year-old complainer young professional, watch the same programming as the 14-year-old girl down the street who can’t even drive a car. But how successful will they be at finding us both relevant ads? Just because the high school freshman and I both want to grow up and be just like Rory Gilmore does not mean I want to see ads for Seventeen or Teen Vogue. I’m much more a New Yorker kind of girl.

It’s also not a huge leap to think that Google would be able to connect my online preferences to my television preferences. That would give Google a whole lot of information about one person.

Other hurdles to consider – advertisers are become accustomed to using pay-per-click ads to attract eyeballs online. These ads come complete with detailed metric information telling advertisers which ads were successful, which weren’t, where users abandoned their site, etc. Will Google be able to duplicate these kinds of metrics for TV?

And what about publishers? If advertisers are going to be in favor of a Google-run ad system it’s because Google automates its ad process, which drives down advertising costs. This is good for advertisers, but not so good for publishers looking to sell ad space. If valuable publishers pull out of Google’s ad program because they’re not making enough money, there’s no place for advertisers to place ads and the whole thing falls apart.

A final obstacle: Aren’t we being trained to skip ads? Think back to the video of that cute girl’s violent reaction when she found out Rand and I were engaged. Before she saw my boyfriend on her television screen, she was grabbing her remote to skip the ads that were getting ready to play and head right back to her Veronica Mars. If even technology-void Susan is a TiVo user, does it even make sense for Google to dive into television ads right now? It’s a multi-billion dollar industry today, but is that number going up or going down?

It will be interesting how Google will adapt themselves and their ad program to television screen and what kind of value they’ll be able to provide.

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One response to “Google Faces Challenges In TV Market”

  1. graywolf writes:

    What might work is letting you know that cute shirt Rory Gilmore was wearing in tonights episode can be purchased from the online store at the end of the show. Or that you can get the exact hair color she has from the Miss Clairol link after the show.

    No no I absolutely didn’t mean that you needed to color your hair or that your wardrobe needed replacing … umm I was just suggesting … never mind I’ll go sit back down on the couch and keep my mouth shut.



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