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Google Selling Ads on Dish Network

We blogged about what Google may have up its sleeve before, so naturally we were intrigued by what VentureBeat.com picked up from The Wall Street Journal last Saturday:

Google is about to sign a deal with Dish Network, the nation’s second largest satellite TV company, to deliver ads for Dish’s network, VentureBeat is hearing.

We haven’t been able to confirm the rumor (Google has not yet responded to a request for comment).

In an effort to extend its growing advertising empire to television, Google has already started a pilot project in Concord, Calif. to deliver ads to cable television subscribers, it was revealed in yesterday’s WSJ.

The latest reports are significant because they suggest Google may be on its way to cracking the huge television market, to deliver a very different kind of ad to peoples’ living rooms. Dish is the nation’s leader in high definition and interactive TV programming. Google’s TV ads, like the ones Google distributes already to Internet sites, would be delivered more efficiently — targeted more closely to the content of the TV programming being watched, and more relevant to the people actually watching it — or at least, that is Google’s intent.

The Mountain View search engine is already making more than $10 billion from online ads. The U.S. television advertising market is about $55 billion, and so is a juicier target than even the Web.

According to the WSJ Saturday, Google has begun a test run serving up TV commercials to cable subscribers of Astound Broadband in Concord, Calif. In this deal, as in the one with Dish, Google is expected to purchase TV spots in advance, and then insert its own advertising — supplied by its advertising clients — so that it looks much like it does today. The difference is, Google would be the powerbroker.

It is unclear, however, how Google would access information about TV households in order to target its ads, without raising significant privacy concerns. But 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.

Read more about this concept of "mass personalization" on the ITVT blog. Once you get into the details, I think you’ll agree this is not Spotrunner, which sounds more like a buying agency.

This entry was posted on Monday, March 12th, 2007 at 1:27 pm and is filed under Astronomy, Front Page, NASA. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

2 Comments

  • Rocco Fanucci says:
    April 3, 2007 at 8:40 am

    Today’s WSJ (subscription) confirms the details: 

    Google Furthers TV Push With Dish Deal — EchoStar Brand to Run Ads in Auctioned Spots, Provide Viewing Data

    By Kevin J. Delaney

    Google Inc. is furthering its ambitions to move beyond online advertising with a multiyear contract to sell television commercials that will appear through satellite-TV provider EchoStar Communications Corp.

    Under an arrangement to be announced today, Google will sell TV ad spots through an online auction system, with advertisers bidding the amount they are willing to pay per thousand households that view each commercial. Google will send the commercials of the winning bidders to EchoStar, which will then insert them in an unspecified number of daily blocks in the TV programming it delivers to the roughly 13 million households that subscribe to its Dish service.

    The deal expands Google’s push into the $54 billion U.S. market for TV advertising, amid similar efforts by the Internet company to move into radio and newspaper advertising. The EchoStar agreement builds on an existing Google test of serving up TV ads to Concord, Calif., subscribers of cable provider Astound Broadband, a unit of WaveDivision Holdings LLC.

    The EchoStar partnership provides national distribution for TV commercials brokered by Google, and the Mountain View, Calif., Internet company says it intends to sign similar deals with cable providers, TV channels and local broadcast stations to sell ads for them.

    TV networks and some advertisers and media buyers have in the past proved reluctant to join Internet-based efforts to change how TV ads are sold, at least partly out of concern that their business would become commoditized. But advertising executives briefed by Google on its plans welcomed the announcement, saying it could improve the market for cable and satellite-TV ads and nonpremium ad purchases. Some added, however, that Google’s auction system wouldn’t replace the way the premium spots, such as those for prime-time broadcast television, are sold.

    "I don’t think anybody is thinking this is going to change large national broadcast," says David Kenny, chief executive of Publicis Groupe’s Digitas digital unit. "This is something that brings a lot of value to the more fragmented end of television."

    Google and EchoStar declined to discuss financial details of their arrangement, which they are testing and expect to have fully launched within the next few months. But Google typically provides a minimum revenue guarantee to partners, lessening the partners’ financial risk, and keeps a commission on ad sales.

    Mike Kelly, EchoStar’s executive vice president of advertising, said Google would account for only a small percentage of the ads EchoStar has to sell.

    Advertisers who use Google’s Web-based system for buying commercial spots have the option of selecting specific TV networks, times of day and regions where the ads will be viewed. Eventually Google intends to allow advertisers to target specific groups of viewers, based on information about the viewer demographics for each channel.

    Google plans to tell advertisers how many TV set-top boxes were tuned in to each commercial they ran, and charge based only on the number of set-top boxes where the commercial played. It additionally will provide advertisers data about whether users changed the channel during the commercial.

    Google is relying on information collected from set-top boxes by operators such as EchoStar, which it says does not permit it to identify any specific subscribers. At least initially, Google is not matching commercials with the content of TV programs or showing ads to specific users based on previous viewing habits or other personal information. The Internet company says concern for user privacy will be a factor in any future efforts to target TV advertising more specifically.

    For EchoStar, of Englewood, Colo., the deal could potentially boost ad revenue if Google’s auction system generates more demand for commercial spots. EchoStar satellite TV subscribers won’t see anything different under the arrangement, as the commercials brokered by Google will fill normal ad spots.

    Similar efforts are under way elsewhere. Online auctioneer eBay Inc., with a group of large advertisers, is setting up an Internet-based system for buying and selling TV ads. Closely held Spot Runner Inc. has built an online system for advertisers to buy TV spots, and caters to small- and medium-size advertisers who might not have bought TV commercials before.

    "It’s way too early to tell whether Google will ultimately be able to find the same success in traditional media it has enjoyed online," says industry analyst Greg Sterling of Sterling Market Intelligence.

    Copyright (c) 2007, Dow Jones & Company, Inc.

    Reply
  • Rocco Fanucci says:
    March 12, 2007 at 2:51 pm

    From Total Content+Media (registration required): 

    Google breaks into TV

    By Kevin J. Delaney and Peter Grant, The Wall Street Journal

    12 March 2007

    The search giant is testing TV-based tailored advertising services with a cable company in California
    Google Inc. has established a toehold in pursuing of one its next big ambitions: controlling which television ads viewers see and tailoring them to consumers’ interests. 

    The Mountain View, Calif., company honed the highly profitable Internet model of search advertising — that is, selling ads targeted directly at consumers based on the terms they enter into Web search engines. Last year, the eight-year-old company racked up more than $10 billion of revenue by brokering online ads for itself and its partners.

    Now, Google has begun a test run serving up TV commercials to cable subscribers in Concord, Calif., people familiar with the matter say. The pilot project to bring its approach to cable boxes represents a foray into the $54 billion U.S. market for TV advertising — much bigger game than Google’s online turf.

    While the effort is in its early stages, the progress underscores how Google could bring changes to how TV commercials are sold and delivered to viewers. Other Internet companies are also pursuing an entree into TV advertising, and any major Google success could eventually challenge the traditional TV and advertising powers.

    In the Concord test, Google has been steering TV commercials to subscribers of cable provider Astound Broadband, a unit of WaveDivision Holdings LLC, since last year, according to four people familiar with the matter. When those consumers watch TV, some of the commercials they see have been sold to advertisers by Google and delivered to the cable company so that they appear in the normal breaks in TV programming as other ads do.

    If the system is successful, Google could eventually try to establish itself as a middleman for purchasing TV spots, furthering its stated goal of offering advertisers one-stop-shopping for ads across virtually all media. There is no assurance, though, that Google can repeat its success in online-search advertising — a field in which it had little serious competition — in the crowded, highly competitive arena of conventional media.

    The previously undisclosed Concord effort, being conducted with a small group of advertisers, is aimed at testing the computer and network infrastructure needed for Google to broker and deliver commercials to cable systems more widely. In the test, advertisers are buying commercial placements through an auction system, people familiar with the matter say. But it is at an early enough stage that the buys are being handled manually by Google salespeople, rather than through a full-fledged automated auction system like the one Google uses to sell ads online, one of the people says.

    Google Chief Executive Eric Schmidt in January told analysts the company was experimenting with TV advertising, without offering specifics. But he said the company intends to use its technology to better target TV commercials to users. Rather than every household seeing the same commercial, Google in theory might tap databases with information about the demographics of an individual’s neighborhood and examine the content of the program being watched at a given moment to better select which ads to beam through the TV. So, for example, a household in an area with lots of children might be more likely to see commercials for minivans than for sports cars.

    While federal privacy law restricts what cable companies can do with "personally identifiable information," the theory is that consumers will be better served seeing ads more relevant to them and will perhaps agree to share information about their habits and interests with Google. Such data eventually might allow Google or others to more specifically tailor ads to individual households — such as beaming ads for dog foods to viewers who own dogs.

    "Advertisers in particular will pay much higher rates for ads that are targeted than ones that are untargeted," Mr. Schmidt noted.

    At this stage, the commercials aren’t targeted to specific households in Concord, which isn’t far from Google’s Northern California headquarters, people familiar with the matter say. And the company likely won’t on its own tap information about a specific household’s buying patterns or other behaviors in order to choose the commercials because of the privacy concerns, one of the people says.

    A spokeswoman for WaveDivision couldn’t be reached for comment, but an executive with Astound, which has more than 25,000 subscribers, confirmed the test with Google is taking place.

    "As we have stated publicly, we think we can add value to TV advertising by making this important medium more relevant for users, measurable and more accountable for existing and new advertisers," a Google spokesman said."As part of this, we are currently running a small, early phase trial working closely with a small number of partners and advertisers."

    Google’s interest in TV commercials comes as the cable industry itself is turning to advertising as a promising source of revenue. One reason: Technology developments are starting to make it possible to target ads to specific households, as Google envisions. The Internet and cable players all want to play a role.

    Several of the largest cable operators have also had discussions with Google about teaming up to do some form of TV advertising. Google has broached the subject with Comcast Corp., the country’s largest cable operator, with more than 23 million subscribers, as part of broader negotiations focusing on whether Google will continue as the search engine on Comcast’s broadband portal, Comcast.net. Their current deal expires at the end of this year.

    Some cable-industry executives are wary about giving a behemoth like Google too much power over their advertising. But many also recognize that Google will likely be a major force in the business."We all believe as advertising moves from one-way to two-way, the winners are the Googles of the world and others that can provide truly two-way addressable advertising," said Steve Burke, Comcast’s chief operating officer, during a recent earnings call.

    Google’s attempts to extend its ad brokering to traditional media aren’t expected any time soon to contribute significantly to its revenue, 99% of which came from Internet ads last year. Its traditional media-advertising efforts have also been bumpy to date. Google’s executives admit to problems with the company’s first tests of print-ad sales; they have given the system a major overhaul. Analysts say Google hasn’t yet lined up enough radio-ad inventory to make its efforts there significant.

    While some advertisers are pushing for an Internet-based system for TV-commercial sales such as Google might provide, a group of them chose to team up with online auctioneer eBay Inc. instead. Even then, the TV networks and some advertisers and media buyers have proven resistant to such efforts to overhaul how TV ads are sold.

    Some cable operators make as much as 6% of their revenue by selling mostly local ads in the time slots they get as part of their deals with the cable networks they carry. But cable companies feel they could greatly increase ad revenue by introducing a wide range of interactive features. They see as the holy grail of advertising the ability to target different viewers with different commercials suited to their interests, much as Google imagines."We’re talking about delivering to advertisers things they increasingly like about the Internet," says Glenn Britt, Time Warner Cable Inc.’s chief executive.

    Time Warner Cable had "preliminary conversations" with Google but the talks didn’t advance because Time Warner executives didn’t feel Google had much to add to its advertising effort, according to Mr. Britt."We have the technological capabilities to do those things," he said."We don’t really need them."

    Comcast is separately planning targeted ad-serving tests this year with three vendors that have been working close with cable operators on new forms of advertising, including OpenTV Corp., Visible World and Invidi Technologies, according to people familiar with the matter. But Comcast executives caution that next year would be the earliest the company would launch this type of advertising."In 2007, it’s going to be baby steps," said Charlie Thurston, president of Comcast Spotlight, the operator’s advertising arm.

    Cable operators have to be careful about what they disclose to advertisers and others on customer viewing habits. Federal law privacy restricts what cable companies can do with "personally identifiable information." And while it’s unclear exactly how big advertisers and Madison Avenue might welcome Google and other Internet players butting into the TV ad brokering business, some say they are receptive.

    "The concept is a homerun with advertisers," says Tracey Scheppach, a vice president and video innovations director at Starcom USA, a media division of Publicis Groupe."There is just so much inefficiency and a system that allows us to serve the right ad to the right person is one that will be welcomed with open arms."

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