• by Wayne Friedman , April 5, 2007

Traditional media agency executives look at the Google-EchoStar advertising deal with a skeptical eye--especially against current media-buying practices. The two companies struck an agreement earlier this week in which Google will offer an auction system to sell TV network time on EchoStar's 125 channel service.

Steve Fajen--a principal of Morgan Anderson Consulting, a veteran media-agency executive--was skeptical. "It's [focusing] on household ratings, and, as we all know, everyone buys on demographics," he says. "Second, it's not a random sample. It is not indicative of the entire TV universe. It's a micro-sample."

That said, longer term, Fajen believes it's good for the business, and good for competition with Nielsen. "Five years from now, it's going to be different," he predicts. "The fractionalization of the media will make Nielsen less and less of a factor."

Lyle Schwartz, senior vice president and director of media research for Mediaedge:cia, agrees. He has observed many holes in the system--a major consideration for major TV advertisers. Still, he says, marketers can sometimes gain valuable research in experimenting, as they do with TiVo's new TV measurement system, which also covers a small TV universe.

Mike Kelly, executive vice president of advertising sales for EchoStar, admits there aren't any demographics yet. But he believes Google has enough sophisticated mathematical experience to project viewers in conjunction with networks that are being bought. Google already does some of this with its AdWords Internet buying service, which has been incorporating radio ad time.

Through Echostar's 13.1 million subscribers, viewing information will be fed back to Google--anonymously. "We are very focused on piracy," says Kelly. "We will not share shareholder information." From this, Google will also be able to target ads for clients geographically and via viewing habits.

Concerning the use EchoStar's subscribers as a TV sample like Nielsen, Kelly says, "13 million homes is a pretty big sample size. We probably do skew more rural. Google will take that data and customize it. They have a vested interest to make it right."

Primarily, EchoStar will look to get immediate results from those small cable networks that are not rated by Nielsen. Nielsen currently offers ratings on about 60 cable networks. EchoStar offers 125 networks through its Dish satellite service.

"We have a tremendous amount of advertising inventory," says Kelly. "A lot more inventory than any other cable provider. It will open us up to a whole bunch of advertisers." For example, he says, it could be a fishing reel company that couldn't buy expensive national ad time on ESPN, but through Google's auction system, may be able to get it cheaper. "We see this as an exciting segue into the online space for us."