• by Mitch Oscar , Op-Ed Contributor, April 10, 2007

Last week's press coverage of Google and satcaster EchoStar's ensuing partnership generated a lot of questions from friends and family concerning its efficacy. The following is list of random thoughts I had -- not necessarily in order of importance -- about the engagement and its interim success. Please share yours when you have a moment.

1) So far, based upon public record and comments from participating media constituencies, Google has not had much success with their initiatives to become third-party sales representatives of commercial inventory in the radio and print arena. At present, the majority of the inventory that Google does represent is comprised of what is referred to as "remnant" by its owners -- that which is less desirable to the ad community, and therefore commands little revenue or generally goes unsold. However, with that said, Google's success in these endeavors has been in its ability to garner revenue from small advertisers that traditionally couldn't afford national, regional and many multi-market campaigns. In this sense Google has achieved a success but not a business.

2) Over the last umpteen months Google has expressed interest in expanding its video empire, whether through the creation of a consummate video search application, its YouTube acquisition, pronouncements of video aggregation aspirations and third party sales representational forays. After all, TV advertising expenditure by the ad community is the $60+ billion mecca. I recently read an article that pegged the global TV spend at $110 billion, of which the U.S. reaps only 20%. Naturally, there has been significant domestic partisan opposition:

a. It is my opinion that the cable operators have and will be resistant to Google's outreach. I think that the technologists, such as Invidi and Navic, which have been developing ad inventory/manipulation models, will be approached first by the cablers rather than going outside of the family.

b. The broadcasters will certainly not willingly give up control of their inventory for a long time, and if they do, it might only be with their extended digital terrestrial channels.

c. It's too early to tell what the telecos might think. However, it seems to me that at present, given their limited market penetration and audience aggregation, they might contemplate utilizing Google to help stimulate sales of their local inventory.

3) Which brings us to the satellite business and the central topic of this piece: GoogleStar, as someone coined the phrase. Since the satellite companies have stepped up their efforts to sell their local avails they have faced an uphill battle with the buying community. Although they collectively reach 27+ million pay TV U.S. households, the ad agencies that scrutinize their footprint have trouble determining if they are fish, fowl, or neither, a local or national play -- or for that matter, even a contiguous regional multi-market expression.

4) It is my understanding that DirecTV and EchoStar generate approximately $550+ million from ad sales. Unfortunately, most of the sales are generated from prime-time inventory, which is diminishing. The other dayparts continue to be undersold. These undersold dayparts should provide an opportunity for Google to exhibit its revenue-generating value proposition for the satcasters.

5) However, with that said, Google's present forays (print and radio) were driven by individual market campaigns. How will Google be able to sell EchoStar inventory locally, when the footprint is scattered across the U.S. in pockets -- not contiguous at that. This to me is a real problem. From the articles I've read, the Google/ EchoStar footprint will occur in the EchoStar PVR homes (nearly 5 million). That will further limit the efficacy of the experiment. One onerous way for them to approach this will be to divide all national spots by local market. Wow. That would create a lot of work. But algorithms can work miracles, and Google's monumental success is certainly a testament to this phenomenon.

6) Online-centric companies -- publishers, agencies, syndicators and third-party organizations -- continue to try to grab a piece of the $60+ billion TV business -- through ad delivery, ad auction and dynamic, addressable advertising. Atlas and DoubleClick are attempting this as we speak. It's only natural for Google to jump in and jockey for the lead position -- as is its heritage.

7) Automated selling, buying, bidding and tracking and reporting have been the pillars of the online community; however, I only hear lip service being given to its possible adoption from the traditional national buying and selling community. What about relationship, history and translation to current TV deals? What about all of those TV professionals (ad agency, vendors, distributors) who have spent their lives interacting in this ecosystem? Should they willingly hand over the keys to the kingdom and walk, unemployed, off into the sunset without putting up a struggle?

8) The GoogleStar arrangement suggests that advertisers would upload video spots to the system along with their desired target audience or network, and would specify the price they are willing to bid for the airtime. I don't know any client who has invested significantly in TV advertising that would truly be comfortable with this method, particularly in the EchoStar footprint. It's nice that based upon the perceived GoogleStar model, advertisers will be able to know if they won their bid and their spot ran 24 hours later. But I think that the traditional agency and client community -- the $254+ billion community -- needs to know ahead of time. Comfort level. And the "Fiddler on the Roof" "Tradition."

9) Then there is the set top box issue. If the set top is on, is anyone watching? Is Google counting set tops as their universe and thereby expanding its numbers threefold? Doesn't sound weighted to me. Someone should speak to Nielsen about weighted panels given their success with determining TV usage for the 114 million U.S. TV households by their relatively minute sample of 10,000.

10) If I have interpreted the myriad of articles on GoogleStar correctly, it can discern second by second viewing and when people tune out of channel. Do they have any expertise in this arena? Not to my knowledge. Maybe someone should ask TNS Media Research's George Shababb to weigh in. Someone give erinMedia President Frank Foster a call to get an expert opinion. Also, whereas the online world is populated with spyware and cookies to provide profiling of computer usage, our TV world is not. Therein lies a significant difference -- one that I think the government has a lot to say about, and has dictated that onerous penalties will abound if violated to the tune of $500 a day per subscriber.

11) Articles suggest that advertisers will be able to choose individual networks and a time of day, demographic group or geographic regions. So....

12) It's great that companies like SpotRunner, which creates quality cookie cutter commercials for $500 a piece, are around to help advertisers with no video to quickly and inexpensively generate content. However, if we start populating TV with poorly executed copy, then won't this product have a negative effect on commercial viewing and start providing motivation for viewers to actively skip commercials? If companies that create commercials in this fashion proliferate, then the ad community will not have to wait until every household in the U.S. owns a TiVo before commercial ratings plummet.

13) Ultimately I am sure that the GoogleStar initiative will generate some revenue from advertisers who don't traditionally advertise on TV. But at the end of the day I think this is another attempt by Google to try to break into the Fort Knox Traditional Advertising Market through another ancillary window rather than through the front door. Who knows, maybe deep-pocketed Google acquires DirecTV now that John Malone has re-emerged. Or the deal with EchoStar is the first nibble toward swallowing the entire entity. There seems to be a lot of possibilities when cash and flow are not the primary issues when contemplating Darwin's evolution or Captain Kirk's Prime Directive -- or am I confusing that Prime Directive with the Next Generation's Borg Prime Directive: "Assimilate. Resistance is futile." I'm going to check around town to see if I can garner any more details. If you have any thoughts, now's the time to speak up.