• by Laurie Petersen , April 3, 2007

Amid mounting speculation about Google's plans for TV advertising, the Mountain View, CA-based giant announced a groundbreaking partnership with EchoStar Communications to introduce the first automated system for buying, selling, delivering and measuring television ads on EchoStar DISH Network's 125 national satellite programming networks.

Under the agreement, Google will have access to a portion of the DISH Network's advertising inventory that spans all channels and dayparts. The national test is on an invitation-only basis to advertisers. (See related story.)

"Our partnership with EchoStar is important for us as we begin to offer a TV advertising platform broadly," said Google CEO Eric Schmidt in the official press statement. "We think we can add value to this important medium by delivering more relevant ads to viewers, providing better accountability for advertisers and better monetize inventory for TV operators and programmers."

In an interview, Michael Steib, director of Google TV ad sales, would not specify the launch date, but elaborated on the plan. "We will be receiving [anonymous] aggregated data. While being very sensitive to user privacy, we are able to learn how many households watched each ad. Specifically, we're making available second-by-second commercial measurement."

The end result should be more relevance for consumers and better results for advertisers.

"It develops into this digital ecosystem where we are helping the advertisers put the ads in front of the right audience and the viewer will see more and more relevant ads," added Steib, who left NBC Universal in January to lead the Google effort.

Google has been testing the system with Astound Cable, a small cable provider, in the Concord, CA DMA.

"Ours is the only end-to-end system with auction-based pricing, full digital workflow and detailed commercial measurement to inform the advertiser and agency on the effectiveness of their campaign," said Steib.

The system is intended to add efficiency to the entire buying, selling and placing process, Steib said. It will use a Web-based system like AdWords. Advertisers will bid for inventory with an auction-based system and indicate their CPM bids. Google will run the auction--and report back in 24 hours whether the advertiser won the auction and if the ad ran, where it ran and the number of household boxes delivered.

Advertisers can then adjust their pricing based on how well creative performed in which conditions.

Participants in the beta uniformly pointed to the real-time measurement elements of the test as revolutionary because within 24 hours, advertisers will know not only what ads have been viewed, but where in the ads viewers have tuned out. Advertisers will also get to see how their ads perform in different dayparts.

"Consumers will have a real vote with the result they will start to see more relevant advertising," said David Kenny, CEO of Digitas and digital lead for all Publicis Groupe agencies.

"I see it as a quantum leap," said Bill Harvey, president of TRA Inc., who was briefed on the system on Friday. "It's never been possible to measure results in such real time with such a big sample size. It's part of the shift to measuring television the way it's supposed to be measured."

Unlike Nielsen's 10,000 monitors, Harvey said, Google's system will tap into the 4 million or so EchoStar set-top boxes.

In addition, Google will create a marketplace where advertisers can access television ad creative--the idea (not so unlike SpotRunner) of making TV accessible to advertisers who have never used it. "Google doesn't make ads," Steib emphasized. "However, we are going to launch the creative marketplace to connect people who want to buy with people who offer to buy."

In addition, Steib said, the measurement system will help channels that are not measured at all today--such "longer tail" channels as Weather Plus, which Steib once ran at NBC Universal.

"There will be a lot of agencies and advertisers who say, 'I'd like to try this,'" predicted analyst Greg Sterling of San Francisco-based Screenwerk. "Google's challenge will be to secure more inventory." As for the effect on agencies, Sterling said, they should embrace the system because it will make them more effective. "I think the agencies will not be disintermediated by this. With the fragmentation of the audience, good agencies and strategic thinking become more important."

Added Sterling: "It makes SpotRunner more visible and more valuable. Sometimes you need more competitors to validate what you're doing."