Future Of TV Ad Market: A Lot Like Online's -- Ad Networks, Behavioral Targeting, Etc.

by , Jan 24, 2008, 8:15 AM
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The future of TV advertising will probably be a lot like current state of the online advertising: aggregated advertising networks, behavioral targeting, and automated buying systems enabling small, "long-tail" advertisers to compete alongside the TV industry's biggest marketers and agencies. At least that's what a panel of TV industry executives blazing that path said Thursday during one of the final sessions of the Future TV conference in New York.

"We have built technology and have an infrastructure that the industry can use to connect all those hundreds of thousands of advertisers with all the permutations that come," Mike Steib, director of Google TV Ads, said in the search giant's latest pitch to the TV industry that it can help it unlock underutilized, under-measured and undervalued advertising inventory, especially millions of local cable advertising avails that have become the ghetto of the TV advertising marketplace.

By aggregating the disparate local cable advertising in ways that deliver meaningful sub-segments of viewers, Steib said Google TV ads program is able to create audience mixes that likely would have higher advertising value than their remnant avails currently have on their own, and which theoretically could compete in value with some of the TV industry's most premium network TV inventory.

"There's all these opportunities to drive sell out," he said, "much, much closer to 100% and to take the CPMs up significantly when you start matching the right advertising with the right audiences."

Using an example of a niche rugby sports programming channel on a local cable system that might have little value on its own to a big national advertiser, Steib said that by pooling that audience with other similar, but disparate channels on other local or satellite TV systems, Google TV Ads could effectively create an unwired network of passionate, engaged viewers that are far more relevant for some advertisers than the in-program audiences of big network TV shows.

Those audiences, he said, would have value both for big national advertisers, as well as new-to-TV and "long-tail" advertisers who might be encouraged to buy the medium as a result of the easy-to-use, and efficient Google TV Ads buying system in a way that is similar to Google's online search ad buying system, Ad Words.

Joan Gillman, president-media sales at Time Warner Cable, and Barry Frey, senior vice president-advanced platform sales at Cablevision, concurred with Steib's vision, though they didn't necessarily think it would be the exclusive province of Google.

"Whether it's a Google, or networks performing a joint venture, there are lots of ways for that inventory to be aggregated," she said, alluding to the so-called Project Canoe initiative quietly being developed by cable operators like Time Warner and Comcast that many have dubbed the Google TV Ads "killer."

"We can give the data, that measurement is there, but the actual customer data is at the operator level," Gillman said, portraying a vision for aggregated TV advertising networks that are not unlike the kind that are becoming increasingly popular in the online world, which are based more on the behavioral targeting of consumers than traditional demographic targets.

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