Google vs. Cable Industry over TV Advertising 2.0
I posted a commentary the other day, which discussed how sites like SaysMe and VoterVoter were taking the Adwords concept and applying it to television advertising – something local cable companies have allowed small businesses to do for over two decades now. Mashable’s original story I was commenting on is here.
It probably shouldn’t come as a surprise that another company is throwing their hat into the ring – a Mountain View, California company started by two guys from Stanford that’s done very well with the Adwords business model: Google.
Google TV Ads is out of a year long testing phase and is now in public beta. As the name implies, it allows users to purchase targeted television spots – although for the time being, you are limited to running advertisements on the DISH Network.
NewTeeVee’s story, Google TV Ads: Hookers and Candidates Need Not Apply, sheds light on one interesting twist to Google’s approach – unlike SaysMe and VoterVoter, Google TV Ads will not allow political advertising.
Mashable’s coverage has a more detailed analysis here, Google Now Lets You Place Ads On TV. The article also talks about Google’s Ad Creation Marketplace, which will allow writers, directors, editors, and voiceover artists to connect with users and place bids to help create advertising spots.
I don’t think I’m the only one working in the field of online video who sees some lucrative side work possibilities here – especially since Google is offering up to $2,000 in AdWords credit to established users to help cover the cost of producing their television spots.
However, the Cable Television industry isn’t about to let anyone – especially not Google – come into their house and steal their business out from under them. When they’re not busy raising their subscription rates, targeted TV advertising on the local level brings in roughly $5 billion dollars each year. As NewTeeVee summarized from a New York Times story a few weeks ago, the Cable Television industry’s Project Canoe might be a little late to the game, but it might end up being worth the wait.
Bright House Networks, Cablevision, Charter Communications, Comcast, Cox Communications, and Time Warner Cable are working together and have put $150 million into Project Canoe. Aside from the fact that they see it as a means of increasing their income from advertising, the end result could bring about the long-promised Holy Grail of television advertising: The specific targeting of ads based on each cable subscriber’s viewing habits and demographic data.
The potential for targeted advertising takes on an entirely new meaning when you’re talking about user specific content.
This is possible because it’s cable, and the cable companies have a 2-way stream to communicate with each set-top box. And not only can they tap into the two minutes of commercial time they are allocated for each broadcast hour for local advertising spots, but they can also work with video content services like OnDemand. It takes the Adwords concept to the mainstream television viewing audience in a way that Google can’t via DISH – but on the other hand, Google does have YouTube.
At the same time, services like OnDemand are on the very short-list of things that cable television has gotten right on their first try. And knowing the cable industry, Project Canoe will be rolled out in a few test markets at first, and then regionally available before going national – and if my own history with cable television is any indicator, my local cable market won’t get it until 2 to 5 years after the rest of the country does (I’m just saying).
Plus, who knows how friendly the cable industry will be to user-generated content in the spots purchased. Let’s not forget that a lot of local cable systems also make additional income producing many of the advertisements that they sell.
Compared to the world of online media, the cable industry doesn’t seem the most UGC or social media friendly in what it broadcasts – unless you count your local Public Access channel, but that’s required by law to serve the needs of each local community. Project Canoe might not be nearly as accessible as Adwords is, either.
So let’s do a distribution channel roll-call: Google is with the DISH Network, VoterVoter and SaysMe currently have a handful of cable markets, Project Canoe has the entire cable matrix, and the Broadcast Networks can’t really get in on this one, except perhaps at the local affiliate level. Hmm… if their dance card isn’t full already, DirecTV must looking like the belle of the ball right now.