Saul Hansell has a thorough overview of Google’s ad ambitions in the Sunday New York Times. Hansell obviously spent a lot of time trying to peer into Google’s “black box” of advertising initiatives, and talked to quite a few insiders and observers to get a bead on where the meteoric advertising force might head.
My favorite quote is from Jeff Jarvis, who gives Google credit for helping to spawn the blogosphere with its Adsense for Content program.
“God bless Google,” said Mr. Jarvis, the BuzzMachine blogger. “They took the cooties off citizen media.” Until Google’s program came along, advertisers shied away from placing ads on individual user’s pages. But AdSense analyzed each page and tried - not always successfully - to find ads related to the page’s content.
One important point comes near the end of the piece. Google may indeed be moving beyond its superb engineering expertise into unknown territory if it tries to tackle television advertising.
“Advertising was not a business built by logic, and we don’t work by algorithm,” said Wenda Harris Millard, Yahoo’s chief sales officer. “Yes, we need to be more accountable, but that doesn’t mean you sacrifice art and creativity.” Mr. Schmidt acknowledges that as Google explores moving into television, it may well face a conflict between its core belief that advertising must be useful and the typical television commercial that is “based on feeling and emotion.”Posted by Cynthia Brumfield at 10:42 PM | Print | Comments (0)
The other day, Cynthia cited a New York Post article filled with quotes from TV and advertising executives skeptical about Google’s chances of success if it tries to extend its ad-sales reach into the TV market. While these execs no doubt have good points to make (the Post story ends with an Enron reference to underscore its cautionary message), the bigger picture is that the TV advertising business is in a transition that no one fully understands or controls.
For example, a day before the Post published its story, the Wall Street Journal ran a piece citing results of various studies on DVRs’ impacts on commercial-skipping. Though the results were somewhat mixed, the studies generally confirmed that a substantial amount of time-delayed DVR viewing involves commercial skipping. And, as a regular DVR user myself, its hard not to believe this tendency will increase in the future, as we get increasingly hooked on the convenience of watching virtually commercial-free pre-recorded programs.
The WSJ piece cites various attempts being made, including positioning spots at the end of commercial breaks, to minimize the impacts of skipping. Then there’s the move by Tivo, discussed in our recent Television 2.0 report, to run static ads when viewers fast-forward through commercials, including an option to click on an icon to watch long-form ads, receive more information or even make a purchase.
Noting that a “Pepsi ad featuring Britney Spears that ran during the Super Bowl a few years ago…was replayed more than the last-minute, game-winning play,” the WSJ piece concludes with ” Perhaps, if nothing else, the latest competition for viewers’ attention might inspire advertisers to create more ads that are actually worth watching.” IMHO, there’s a long way to go on that front.
A few days before the WSJ piece, USA Today ran a story on the “Start Over” service being tested by Time Warner Cable in its Columbia, SC system. Start Over allows digital cable customers who miss the start of a show but tune in before the end to push a button on their remote and go back to the start. While the service—which presumably uses the equivalent of a DVR at the cable system’s headend—allows viewers to pause and rewind, it does not allow them to fast-forward through commercials. I’m skeptical that this kind of service has much chance of displacing DVRs if it continues to force-feed commercials to viewers while DVRs allow them to watch 30-minute shows in 22 blissfully commercial-free minutes.
Which brings me back to Google’s approach to advertising, which is discussed by Omid Kordestani, Google’s senior vp for global sales and business development, in a 10/26 interview with John Battelle. As Battelle notes, Kordestani has played a key role in taking Google’s ad revenue from zero to $3 billion in a stunningly short period of time.
The difference between us and our competition is that we innovate through applying technology. The angle of a media company is you’re packaging content or advertising inventory. We look at ads as commercial information, and that goes back to our core mission of organizing the world’s information. When people in the media world hear this, they say, “What are these guys talking about?”
The measurability of online advertising will extend broadly to all areas of media. You have companies spending billions of dollars on television. As more and more consumers adopt technologies like TiVo, I think you’ll be able to have much more useful forms of advertising — more targeted, more measurable, and with new pricing models. Just imagine if we made it possible for our advertisers to quickly publish relevant ads that could range from the local plumber on one end to Super Bowl commercials on the other.
Batelle, co-founder of Wired magazine and author of a new book called “The Search,” appears to have coined the term “intent attached marketing.” The gist of it, he says in an online interview, is that “You’re not buying content attachment, you’re buying attachment to the intent as declared by a consumer.”
It seems likely that, in the future Television 2.0 marketplace— whether it be cable VOD, telco IPTV or Internet-delivered video by Google, Yahoo, AOL and MSN, or startups like BrightCove, Veoh Networks—successful advertising models will need to deliver real value to consumers, whether it be through an ad’s entertainment value or by providing relevant “commercial information” in a manner similar to that pioneered by Google’s search ads.
And, while privacy issues will need to be sorted out, it also seems likely that the targeting of TV 2.0 ads will be based on an increasingly rich mix of usage data and, for consumers willing to provide it, demographic and other personal data as well.
So, while it may be an uncomfortable time for traditional TV advertisers, networks and content owners, it seems reasonable to expect that the transition to Television 2.0 will ultimately provide both viewers and program producers increased flexibility in finding the optimal mix of ad-support and user payments as a financing mechanism. It will also feature ads that viewers are more likely to want to watch, and provide advertisers with far more certainty that their ads are reaching their target viewers and having a positive impact on their business. Who will be left standing and profitable as we move farther into the TV 2.0 transition is, of course, another question.
Posted by Mitch Shapiro at 3:46 PM | Print | Comments (0)
AT&T is once again a major player in the competitive mix…at least in name. Last week, SBC said it will change its name to AT&T following the companies merger, expected later this year.
At close, the new company will unveil a fresh, new logo. After completion of the merger, the transition to the new brand will be heavily promoted with the largest multimedia advertising and marketing campaign in either company’s history, as well as through other promotional initiatives. At close, the company will also announce the stock market ticker symbol it intends to use.
With SBC preparing to roll out IPTV services on a large scale using relatively untested hardware and software, its adoption of the AT&T brand could revive the latter’s tattered reputation for cutting edge technology. But, if the IPTV rollout seriously falters, the AT&T brand could receive its final death blow, especially as the generational shift continues from Ma Bell-loving grannies to iPod toting digital multitaskers.
The history of the AT&T brand in the past two decades closely parallels the major milestones and competitive trends in the telecom industry. To quote the Grateful Dead, “what a long, strange trip its been.”
Roughly two decades ago, AT&T’s long-distance unit was split from its local operations, which were immediately dubbed the seven Baby Bells. A decade or so later, Congress passed the Telecom Act, which was designed to break down regulatory barriers between local and long distance, and between voice, video and data.
Though the Act’s policy goals have been partly achieved, the decade following its passage has been characterized by an endless cycle of FCC rulings and legal challenges that continue to this day. Though the ride has been bumpy for the Bells, it has been truly grueling for AT&T and other IXCs, and for the many CLECs that came and went as investors and regulators opened then closed various doors to competitive entry and opportunity.
Along the way, AT&T attempted to extend and revitalize its brand in the emerging broadband space by buying TCI, the nation’s largest cable operator. The TCI systems were generally in poor shape technically and were not managed especially well by AT&T, which was under mounting pressure from Wall Street to get its financial and competitive house in order. After failing to convince Wall Street its cable investment was smart one and to wow consumers with its broadband branding effort, AT&T finally sold its cable systems to Comcast.
The next phase of the AT&T brand saga will be rolled out amidst the recombining of Ma Bell’s remaining long-distance business with the largest single chunk of its former local network operation. It also comes amidst mounting competition between telco and cable “triple-play (or quadruple-play) bundles, both of which are increasingly under threat from IP-based services delivered by independent service providers via the open Internet. It also comes at a time when Congress is considering a major rewrite of the Telecom Act that will likely have major impacts on the competitive prospects of these three (and other) industry sectors.
It seems somehow fitting (or maybe ironic?) that the AT&T brand will remain part of the mix in today’s raging battle over regulatory models, competitive advantage and customer loyalty. SBC is hoping that a revitalized AT&T brand will help it and its customers build a bridge from the past to the future. It may be right. If its wrong, the venerable brand will likely seal its fate as a symbol of a carrier-controlled analog past that was ultimately replaced by a consumer-controlled digital future.
Posted by Mitch Shapiro at 3:33 PM | Print | Comments (0)
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