Google enters the TV ad sales market

Just as they've been threatening to do for a while, Google has partnered with EchoStar to deliver TV commercials to the network's 125 channel DiSH Network. Google hopes to bring the same kind of media measurement capabilities to TV as it currently has for its web-based AdSense system. However, while the prospect of measured TV media has some advertisers drooling, the AP, the Wall Street Journal and others all note that larger cable providers are likely going to be resistant towards such an approach, since it could wreak havoc on their incumbent system of up-front ad sales.

The first incarnation of the Google system is not only an auction house that allows advertisers to specify how much they're willing to pay for certain time slots in different demographics, but also uses EchoStar's 2-way communication system to actually measure the number of set-top boxes that tune a particular ad, giving advertisers unprecedented visibility into the consumption of their marketing messages. It's unclear whether this data is going to be used for directly billing the advertisers on a per-view basis or whether it's strictly a measurement capability, but if AdWords has taught us anything, the latter will necessarily lead to the former if this project proves successful.

That's probably the scariest thing to old-school networks, measurement companies and Madison Avenue execs. The half-century of tradition that has led to high prices and poor performance for many ads has more or less guaranteed revenue to these companies since there has been no alternative. With deeper insight into how commercials actually function, when and where they work best, and who's actually watching, many network advertising slots could suddenly become much more valuable, but there's an equal chance that some number will be much less valuable than what they're sold for right now. It's that uncertainty that has the networks sweating right now, and hopefully Google and EchoStar will come forward with some performance metrics after the first few months that will settle the argument once and for all.

I've been following Google's trek down this road for a while. Other articles and blog posts include:
Will Google's new video ads find their way onto digital signs?
YouTube gives Google a killer app for digital signage displays
Google wants to run your digital signage network, patent says
Will cost-per-action ads find a home in the retail store?
Who will bring user-generated content to out-of-home media?

Tags: Google, telvevision, commercials, advertising