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17 february 2009 | 16:47

Google TV Ads: Still a Tough Sell

In the past two months, Google (GOOG) has abandoned its efforts to sell newspaper and radio advertising. Will it pull the plug on its initiative to sell TV ads, too?

Given the coming convergence of TV and the Internet as well as advertisers' hunger for Web-style measurements for their TV commercials, chances are good that Google will stay the course. But it faces a tough slog. A range of companies are also developing technologies that do a better job of allowing advertisers to target TV viewers. Then there is traditional media's deep-rooted suspicion of Google. "They're the pretty new girl in high school," says a senior ad sales executive. "We hate them for that."

When Google announced its television venture—dubbed Google TV Ads—nearly two years ago, it sounded promising. The search giant is trying to replicate its Web model for TV, offering a self-service, auction-based system for advertisers. Advertisers can choose shows that best fit what they are selling. For example, a travel agency can visit a special Web site, type in, say, "cruises," and Google finds programs through guide information that might mention cruises, like an episode of King of Queens in which the characters Doug and Carrie go on a cruise. Advertisers bid on the ads available for that program, decide what they are willing to pay, and upload their commercial, which is delivered directly to the TV network. Companies pay only for those TV sets tuned in to their ad for five seconds or more, data Google gets from set-top boxes. "We're about speed and flexibility," says Mike Steib, a former NBC Universal (GE) executive who runs Google TV Ads.
More Effective Targeting

Some advertisers see the merits of Google's system. After all, the $60 billion TV advertising business seems increasingly archaic in the Web Age. Companies still buy ads way ahead of time, months even, often in bulk, and TV outlets collect their money before commercials hit the air. It can be a hit-or-miss affair, with program ratings uncertain. While audience data have improved in recent years, advertisers tend to make educated guesses about who is watching what and when. Being able to target more effectively and buy on the spot is what attracted Chinese PC maker Lenovo, one of the first big advertisers to buy commercials through Google. "We needed to be super-efficient," says Deepak Advani, Lenovo's chief global marketing officer. "With Google, we were not forced to buy a package of ads at the same time. We could buy one ad at a time, and bid on the spot we wanted, and see it air two days later."

Lenovo, however, is one of only a handful of big advertisers to use Google TV Ads; others include Jenny Craig, Priceline (PCLN),, and some Johnson & Johnson (JNJ) brands like Lifescan and Centocor. Because the Big Four broadcast networks have shut Google out, the company has partnerships with relative small fry, including Dish Network (DISH), Hallmark Channel, Bloomberg TV, and NBCU cable channels such as CNBC, Sleuth, and Chiller. These outlets don't provide the number of viewers and reach that national advertisers require. Dish Network, for instance, is in only 13 million of America's 112 million TV households.

Some advertisers also say the slots Google is trying to sell are often at the most undesirable times of day—the middle of the night, say, when self-help guru Tony Robbins rules the airwaves. "The challenge for [Google] is scale," says Russ Klein, chief marketing officer at Burger King (BKC), which buys Web search ads through Google but zero TV time. "We don't see anything seismic here right now."

Another shortcoming of Google's automated system, say marketers, is that its technology, while impressive, usurps relationships that still mean a lot among Madison Avenue, advertisers, and TV companies. "There are important relationships and discussions that go on about how to develop programming and how to present your message on TV," says Klein.

Google TV Ads' Steib insists the company is committed to TV, noting that as television becomes more interactive, viewer data and targeting will become all the more important to advertisers. The challenge for Steib is to strike more partnerships quickly with TV providers (he says more will be announced soon) before traditional media buyers, cable operators, and even Microsoft (MSFT) get entrenched in the business. Google will play a role in the future of TV advertising, says Curt Hecht, a top executive for the ad conglomerate Publicis, but it will not dominate the way it does on the Web. For now, says Hecht, "Google TV Ads is a healthy experiment."
Автор: Tom Lowry
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