The Google revolution rolls on. Not content with declaring its intention to blow media agencies out of the online advertising water, it has now turned its attentions to TV advertising.
Last week, in the US, Google signed a deal with EchoStar Communications (the country's second-largest satellite TV platform behind DirecTV) to sell some of the airtime of the channels carried on the platform.
In the US, distribution platform operators have a right to sell some of the airtime of all the channels they carry, so under this EchoStar deal, Google will now be selling a portion, including peaktime slots, of the inventory of big media owners such as Disney, Viacom and News Corp.
But still, EchoStar has a less than awesome share of the US TV market, and Google will initially be charged with selling a relatively insignificant proportion of its inventory. Small potatoes, you might argue. Especially as we have, in recent years, seen a number of airtime auction schemes come to nothing, on both sides of the Atlantic.
However, the industry might be wary of underestimating the significance of this move because, perhaps predictably, Google intends to reinvent the TV airtime trading mechanisms. It will sell airtime in the same way as it sells online inventory - on an auction basis. And it will use a similar sort of reconciliation method, but instead of clicks or page impressions, its currency will be "set-top-box impressions". A set-top box tuned to a channel during the ad break in which your ad runs delivers one impression. The number of people in the room at the time is irrelevant.
Which is great for zero-rating channels in satellite TV's twilight zone. But does it have long-term implications for mainstream TV? Mike Steib, Google's director of TV advertising, hopes it does - and not just in the US. Google, he says, wants to offer the same benefits (simplicity of purchase, accurate targeting and ultimate accountability) that it offers in the online space.
Shouldn't media agencies be suspicious, however - Google, notoriously, has stated in the past that it wants to disintermediate (a euphemism for cutting out the middle man) agencies from the online trading mechanism.
"Agencies are our valued partners," Steib responds. "We're going to be generating more data on targeting and performance than ever before, which arguably makes agencies more important. Nor are we looking to commoditise the inventory we sell. We recognise the importance of editorial adjacency."
Which is good to hear, Oliver Cleaver, the media director of Kimberly-Clark EMEA, responds. He agrees that many advertisers would be interested in a truly simple way of trading airtime, but it's hardly their main concern these days. He explains: "TV is not about commodity, it's about quality of engagement. So it's the accountability part of what Google is offering that will be of interest.
"We'll want to know whether this is just another way of measuring eyeballs, because advertisers' efforts these days aren't focused on that so much. I'm not entirely sure Google wants to get into that area at all. I think we might be far more interested if it were committed to improving the overall research picture in media."
But Tim Jones, the chief executive of ZenithOptimedia North America, says it will be interesting to look at viewing trends as represented by the new Google metric. "This might be a good test-bed for applying online media metrics to broadcast TV. EchoStar has four million homes and Google will have 20 per cent of its inventory, so this represents a small subset of the US broadcast market, but that's not to say that it's not valuable," he argues.
And Damian Blackden, the director of strategic marketing technologies at Universal McCann, points out that online auction systems for TV airtime have been tried before and they've always made sense on paper, if not in reality. Each local market around the world tends to have its own trading nuances too, which means it's difficult to judge whether this latest initiative has wider implications outside the US.
He concludes: "In some senses, it may help to polarise the TV market. An auction system would be an attempt to reduce mainstream advertising to its lowest common denominator at a time when media agencies are pursuing communication planning strategies based on non-interruptive techniques and things such as branded content."
YES - Mike Steib, director of TV advertising, Google
"Google's system allows advertisers and their agencies to reach their targets in a simpler way - and the responses we have had so far have been positive. We share a goal in seeking a better way of getting ads in front of people."
NO - Oliver Cleaver, media director, Kimberly-Clark EMEA
"Agencies go pale when you mention Google because they fear it is trying to take the trading of media away from them. I doubt this initiative will revolutionise TV trading as it is not just about price these days - it's more about quality of engagement."
MAYBE - Tim Jones, chief executive, ZenithOptimedia North America
"Outside of the upfronts, we have a number of other ways of going to market, from remnant to barter and syndication - so this will represent another opportunity. It won't change the world quite yet but it will be interesting to see how it develops."
MAYBE - Damian Blackden, director, strategic marketing technologies, Universal McCann
"The danger of an auction system is that it reduces things to their lowest common denominator. Agencies will happily work with Google if it enables them to get the best for their clients."
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