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The Wall Street Journal (subscription required) has some intriguing
details on Google’s latest move: controlling which TV commercials you see and
sending only those that you’re interested in. Google has already made
billions targeting ads to you online, so why not through the TV? Well,
two main issues have to be addressed: preparing the necessary
technology and overcoming privacy concerns.
Google has already begun a test run, sending TV commercials to cable subscribers in Concord, California. The U.S. market alone is $54 billion for TV advertising (much more than the ad dollars spend online). As early as last year, Google started working with cable provider Astound Broadband to deliver targeted TV commercials.
So now Astound customers in Concord sometimes get targeted commercial spots that have been channeled through Google and delivered to the cable company in a way that allows the ads to appear during the normal breaks (just like any TV commercial).
It’s too early to tell, but if the system works as planned, Google will likely position itself as the one-stop shop for advertising across all media. In January, Google CEO Eric Schmidt mentioned briefly that the company is experimenting with TV advertising. He only said that Google plans to use its technology to better target TV commercials to viewers.
So rather than everyone seeing the same commercials, Google would deliver TV commercials only after accessing databases with information about demographics of your neighborhood while simultaneously analyzing the content of the program being watched before sending you the applicable TV commercial.
Some examples given: if you live in an area with lots of children, you would likely see more minivan commercials over sports cars. Wonder why you’re seeing so many dog food commercials? Your neighborhood is probably home to a multitude of pet lovers.
Right now, though, federal privacy law restricts what cable companies can do with “personally identifiable information.” Google is hoping that consumers will recognize the value in seeing more relevancy in advertising and perhaps be willing to share info on their interests and habits. Schmidt is undoubtedly right when he says, “Advertisers in particular will pay much higher rates for ads that are targeted than ones that are untargeted.”
But what about the consumer? Is relevancy really worth giving up some of your privacy?
I suppose we’ll have to wait and see how the test market reacts. As of now, Google is using the Concord test to analyze the computer and network infrastructure needed for the company to broker and deliver commercials. An auction system is already setup through which advertisers buy TV commercial placements. Currently the buys are being handled manually by Google salespeople, but a fully automated auction like the one Google uses to sell ads online is likely in the works.
*Update* VentureBeat is spreading a rumor that Google is about to sign a deal with Dish Network (the second largest satellite TV company in the US) to deliver ads on Dish’s network.