Google to sell satellite TV ads
Google Inc. took its first leap into the lucrative but fiercely competitive market for selling television advertising Monday, announcing a deal to deliver ads to millions of subscribers of satellite TV company EchoStar Communications Corp.
The deal underscores Google’s ambition to become a premier broker of advertising for not just the Internet, but TV, radio, print publications and other media.
Google said it would sell a portion of EchoStar’s TV ads through an automated online auction system that’s similar to the one it has used to dominate Web-search ads.
“We think that TV is becoming more like the Web,” said Keval Desai, Google’s director of product management for TV advertising. “If you think about TV, you have hundreds of networks. That’s a lot of content. The audience is getting increasingly fragmented. If you’re an advertiser, it’s very hard for you to go and target these networks one by one. You need a scalable, automated platform.”
The companies did not reveal the financial terms or duration of their contract. EchoStar, based in Englewood, Colo., has 13.1 million subscribers to its Dish Network service.
“For us, it’s an investment in the future of advertising,” said Michael Kelly, EchoStar executive vice president of advertising. “It’s a multiyear contract, but we think it should last forever.”
Mountain View, Calif.-based Google has made inroads with radio and print advertising, striking deals in recent months with radio broadcasters and major newspaper publishers.
The deal with EchoStar represents Google’s first jump into TV, whose roughly $70-billion-a-year ad market dwarfs the estimated $17 billion a year spent on Internet ads. At this point, though, it’s a dive into the shallow end of the pool, because it involves only a small percentage of EchoStar’s airtime.
The field is already crowded with start-ups such as Los Angeles-based SpotRunner and a tangled network of ad-buying agencies, some run by multibillion-dollar conglomerates. It’s unclear how willing they will be to work with Google, whose advances onto new turf are raising eyebrows across the media industry.
Google is betting that the innovations that helped make it the juggernaut online will win customers offline.
Desai said Google offered a single marketplace for TV ad buyers who have traditionally had to cut deals with individual shows on individual networks.
Through Google’s automated online system, marketers can upload their ads, specify how much they’re willing to spend in total and bid for TV spots. They can also target an audience by selecting shows that match the demographic group they want to reach and can choose the time of day or region in which the ads run.
Within 24 hours, the advertisers receive feedback on how many times their ads have run and whether viewers switched channels during them. The information will come from data EchoStar collects from subscriber set-top boxes.
“None of what Google is doing is totally novel,” said Greg Sterling, an online advertising analyst with Sterling Market Intelligence. “What’s new here is Google’s ability to bring all these things together -- the auction, the efficiency and the accountability.”
Advertisers will welcome the ability to gauge exactly how many times their ads have been seen, said Bill Harvey, president of New York-based Touchpoints ROI Analytics Inc., a firm that measures advertising effectiveness.
“The way you measure it in the past is by extrapolating Nielsen’s surveys of 10,000 homes,” Harvey said. “Now you can get actual data from the set-top boxes. That’s huge.”
EchoStar is hoping that Google will bring new advertisers.
“We think that this will open up TV advertising to a much wider and broader array of advertisers who will use the medium surgically,” Kelly said.
