When Google acquired dMarc, a radio advertising brokerage network, in 2006 for $102 million, the move was seen as an essential diversification amidst criticism that Google search advertising was a “one trick pony.” Now that Google has exited the radio advertising business, following its similar retreat the print advertising business, some are seeing this as a sign that Google’s roll in advertising beyond the internet will be far more limited than some of its other aspirations.
The biggest near-term question is whether Google’s TV business will be next. Google’s TV aspirations, which began with Echostar and got a boost last year from a deal with NBCU, have not exactly taken off, but an exit at this point would clearly signal a change in long-term strategy, as it seems unlikely that Google could re-enter the medium any time soon, or that its future in multiplatform advertising could have great impact without that particular medium. For its part, Google insists it’s not abandoning television:
…we will continue to invest in our growing TV advertising business, where we can measure audience response and help advertisers understand how effective their ads are.
Google also notes it will not abandon audio ads, but instead use its technology, “to develop Internet-based solutions that will deliver relevant ads for online streaming audio.”
In pursuing advertising media beyond the web, Google sought to bring three key advantages it had mastered online:
- Self-service accessibility through AdWords
- Superior ad relevance through search
- Accountability through measured response (pay-per-click model).
While self-service has been a feature of all of Google’s offline adventures, Google’s statements acknowledge an offline gap in the core value propositions of relevance and accountability. Moreover, they indicate the company may have learned a key lesson about what it will take to deliver these in the future of advertising.
Both Google print and radio ads had targeting and measurement features built-in, but they were impaired by the underlying media. Targeting was limited to standard methods like demographic, geography, format and daypart (radio also included a novel weather event trigger), and feedback was limited to knowing when and where your ad ran (and potentially correlating that with website or telephone activity). This was simply not enough of a differentiator to take off.
Google TV, on the other hand, has access to a much more detailed and potentially valuable data stream: the set-top box data that can indicate when users actually tune out an ad. That’s something, but is it enough? For targeting, Google TV starts with basic demographics, then adds search to find programs to advertise in, but only the program metadata is searched making the context much weaker than what one expects from AdSense. Still, TV is moving quickly toward more interactive advertising forms that could give the Google approach more of an edge, if it can find ways to work with service providers, some of whom have their own designs on this business (for example, Canoe Ventures).
In sum, for Google to succeed in multiplatform advertising the way it has online, it will need two things:
- Improved targeting, either from deeper analysis of the underlying content or by exploiting the addressability of set-tops and handsets on a granular level
- Interactivity-based accountability and pricing models.
Offline media in general have some ground to cover before these capabilities are ubiquitous, and incumbent service and content providers may have learned something about the risks of intermediation from Google. But I would not take Google’s recent retreats as any indication that Google’s pony won’t keep trying new tricks in advertising.
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