Google Fiber brings Targeted Ads on TV based-on geography, type of program …

25 Mar 2015 | Author: | No comments yet »

Google Fiber Plans Experiment With Targeted Ads for Television.

The company is starting a small trial of local TV ads with subscribers of its fibre fast internet and video service. Advertisers will pay based on the number of times the ad was shown—the people who watched aren’t fed back into a database and matched up by data and purchaser info. The company recently announced a trial program for Google Fiber in Kansas City that will deliver ads from local businesses based on subscribers’ location, current programming, and viewing history. Google, like a handful of other companies, is trying to bring some of the big-data advantages of online advertising to a TV landscape that still often runs on Manhattan lunches and handshake deals. Earlier this year it was revealed Google’s super-fast Internet service – up to 100 times quicker than basic broadband – is heading for four more US metropolitan areas as the technology titan ramps up pressure on cable service giants. ‘We can’t wait to see what people and businesses across the southeast US do with gigabit speeds,’ Google Fiber vice president Dennis Kish said in a blog post announcing the expansion.

Using data from its set-top-boxes, Google (and advertisers) will know precisely how many times a particular local ad has been watched in homes with Google Fiber service. That super-narrow targeting represents something nearing a holy grail for television advertisers, even as it raises privacy issues about a company selling TV service tracking what its customers watch. And while Google isn’t the only company experimenting in the targeted TV space, the company’s enormous ad prowess online will likely pique marketers’ interest in terms of what it can do on TV.

Users can opt out of the targeted ads using their remote control, according to Ars Technica, which added that once you’ve done so, the company will stop collecting your data for advertising purposes. Google is meanwhile working on a new generation of applications designed to capitalize on Internet speeds available using Fiber, but did not disclose details.

On a post to its online product forum on Friday, Google Fiber said the targeting “allows you to see ads for nearby businesses — like the car dealership downtown or the neighborhood flower shop.” It says it will start “a small trial” in early April. For Google, this hints at a broader strategy to leverage its advertising prowess in all sorts of physical-world platforms, such as driverless cars and mobile phone service. Fiber TV ads will be digitally delivered in real time and can be matched based on geography, the type of program being shown (eg, sports or news), or viewing history. Expansion of the Fiber program comes amid media reports that Google is getting ready to sell wireless telephone services directly to US consumers after reaching deals with carriers T-Mobile and Sprint. The story behind the story: Google Fiber’s program will likely raise privacy concerns since the company wants to target advertising based on viewer habits.

While this is a no-brainer for Google and simply applies the same formula to TV that we’re already familiar with when it comes to Gmail, YouTube and other Google properties, it’s a significant development for TV viewers that for decades were served advertising in a shotgun-style blast whether they were receptive to the messaging or not. Advertisers have had to estimate the reach of the commercials based on services such as Nielsen ratings and have only been able to target ads based on specific shows, not on specific viewers. Google is already in a powerful position in the wireless world, with its Android operating system running on more than 80 percent of the world’s mobile phones.

Google will use some viewer data, like what show you’re watching or what shows you’ve watched in the past to try and target the ads for maximum effect. From all this activity, the company gets anonymous information that gives it clues on people’s age, gender, income, location and interests and uses that to show more relevant ads online. The company even hints that ads can be fine-tuned for where you live — for instance, you might see a different local ad during the football game than your friend who lives on the other side of town. That lets Google charge a premium for those ads because it can commit to a marketer that only the right sliver of the online audience will see the messages. Cable and satellite operators are all racing to offer targeted ads — or as they’re called in the industry, “addressable” advertising — the theory being that a candidate can maximize their budget by sending ads only to those people who are likely to be persuaded or mobilized as a result.

It could also change how ads are sold by giving advertisers more leeway over when ads are shown, to whom and how often — the same kinds of control they have when advertising online. Instead of aiming for broad demographics by placing ads on TV shows that demographic is likely to watch, local businesses could target the exact television viewers who are most likely to respond to their ads. Tracey Scheppach, executive vice president of Precision Video, a division of the agency Starcom MediaVest, said Google could implement dynamic advertising in different ways.

Cable companies have long sold advertising time during nationally-broadcast shows to local small businesses — that’s how that goofy ad for your local used car dealer makes it onto your TV during the latest episode of your favorite show. It’s not clear what “viewing history” means, how granular that opt-out process will be, or whether this type of targeting will be available to both national and local advertisers. In many ways, this is exactly what privacy advocates feared Google Fiber would become: yet another way for Google to collect even more data about you. Advertisers buy most television commercial airtime based on broad assumptions about what type of consumers are drawn to various flavors of programming. That may be why it took a company like Google to harness the power of set-top boxes to even try out this idea on a traditional medium like television.

That’s why pickup trucks are pitched during football games and commercials for fabric softeners appear during “The View.” Google Inc. makes its billions analyzing Internet searches and Web views to tailor online ads to match what consumers appear interested in. Broadcast media, meanwhile, has been largely stuck in the dark ages, unable to match advertising to individual viewers or even say with any certainty how many people saw any given ad. According to a recent report from research firm MoffettNathanson, in the fourth quarter Google Fiber had just under 30,000 video subscribers across Kansas City, Mo. and Kansas City, Kan. “To Cable & Satellite investors, Google Fiber is a bit like ebola: very scary and something to be taken seriously… but the numbers are very small, it gets more press attention than it deserves, and it ultimately doesn’t pose much of a risk (here in the U.S. at least),” the report said. With the possible exception of TiVo’s little-known research division, which offers second-to-second, randomized viewer data to marketers, there’s simply no way to get the kind of data Google is promising with its new service.

Over the last year, many entertainment companies like HBO have announced new services that allow “cord cutters” who do not have a traditional cable connection to watch their shows over the Internet. The TV industry works off of Nielsen ratings, which pulls viewership data from a relatively tiny cross-section of viewers with meters installed in their homes. But imagine placing ads during such a high-rating event that recognize one viewer spends several hours a week watching kitchen shows and might be a sucker for an ad for knives. As shows become more like the Internet, it is natural for ads to follow the same path. “It will matter less and less how you get your connection and more what you can see, when you want to see it,” said Jonathan Nelson, chief executive of Omnicom Digital. “Wherever there is people’s attention, that’s where we need to be.” A version of this article appears in print on 03/24/2015, on page B2 of the NewYork edition with the headline: Google Plans an Experiment With Targeted Ads for Television. For example, political campaigns are now able to measure and test the impact of their online advertising, non-profit organizations can use information gathered from petition sites to target only the most passionate people for donations, and retailers can rely on affiliate advertising they only pay for if someone actually makes purchase.

Nevertheless, despite the opportunities for advertisers, it’s hard to imagine how Google could expand its TV ad service to the more lucrative national market — the system is dependent on Google controlling the hardware in people’s homes. As more advertising shifts to the web and mobile, it only makes sense for cable companies to offer more measurability, even if it means charging less for ad time in the long run.

And since Nielsen ratings have proven incredibly resilient over the years despite technological advances, it’s unlikely Google will take over any time soon. This may have already been going on for years, thanks to set-top boxes, but Google’s move could raise greater awareness of the practice and finally cause a backlash. Still, with new services like the Dish Networks’ Sling, Sony’s PlayStation Vue and Apple’s long rumored TV streaming service poised to make paying for a separate television subscription redundant, the difference between TV and internet will only continue to blur. That blurring will include a melding of business models, one where knowing exactly what viewers are watching will be worth a lot more than an educated guess.

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