Even as BusinessWeek raised questions about the growing power of Googlezon, the fire-breathing search monster lurched into a new market: television. Google announced yesterday that it was launching a closed trial of a new television advertising service in conjunction with Echostar and Astound Cable. Unlike traditional TV advertising, Google will only charge for ads that people actually watch.
The system will utilize set-top box data to track viewership of commercials down to the second-by-second level. "Advances in set-top-box technologies make it possible to report aggregate statistics on how many times an ad was viewed and whether it was watched through to the end," Google said in its announcement. "As part of this trial, we will be working with partners to use aggregate, anonymized set-top-box metrics to deliver timely and accurate viewing reports." The new metrics will give advertisers far more insight into particular ad campaigns than they currently have, and all of the buying decisions and reporting information will be available through the standard Google advertising interface.
The result is that Google will bill by CPM (cost per thousand) impressions of an ad, but these numbers will be actual viewership numbers, not aggregate totals from the entire show. That means that advertisers who air ads back-to-back might pay different rates depending on how many customers flipped the channel as the ads ran. The ads can be targeted by demographic, time of day, or particular channel.
Ads will be purchased using an auction system like the one that currently exists for AdWords. Google hopes that the simplicity of the system and the ability to do small, targeted ad buys will open television advertising to small business, much as Google's system did with the web. Advertisers involved in the initial trial won't be mom-and-pop stores, though; Advertising Age says that Intel and ETrade will be among the first users.
Google has been hinting at such an announcement for several months, and the initiative will join the company's other attempts to move beyond the web page. Google has experimented with print ads, radio ads, and video game ads, but the television project sounds more ambitious than past efforts. Giving advertisers a second-by-second breakdown of how many people watch their ads will bring an entirely new level of granularity to television advertising, but it's not going to happen without partnerships.
Until Google launches its own GoogleSat or turns into an ISP and begins pumping IPTV into consumer homes through all of that dark fiber it owns, the company will need to partner with existing networks and delivery systems in order to have any ad time to sell. Echostar has been willing to let Google resell some of the time that it controls, but other partners with a long history of controlling their own ad sales may balk. This could be especially true of major television networks like NBC or Viacom (owner of several networks), both of which have had conflict with Google over its subsidiary YouTube. Networks that are already wary of Google's online dominance may be hesitant to let the search giant have a piece of the off-line advertising market.