Google, Nielsen Form Alliance: First Step Brings Demo Data To Google TV Ads

After months of angst concerning Google's inroads into television, and potentially into television audience measurement, Nielsen Co. has entered into a strategic relationship with the online search giant. The first phase of the relationship will give Google access to Nielsen's demographic data, which will be integrated with the digital set-top data Google currently gleans from the TV operators partnering on its Google TV Ads network.

To date, Google has two providers--satellite TV giant EchoStar, and a digital cable TV operator in the San Francisco region--which license their TV set-top data to Google as part of the proof-of-performance metrics for Google TV Ads advertisers. The integration of Nielsen's demographic audience data is a step toward enhancing that data for Google's TV advertisers, many of whom are more comfortable with traditional TV audience ratings than the click-stream data generated by digital set-tops.

"We see this as a major next step," said Mike Steib, director of Google TV Ads. "We want to help make TV advertising more effective and more relevant for viewers and for advertisers."

Steib declined to say how much TV advertising Google has sold to date, or which advertisers have been buying time via Google TV Ads since it began operating in the third quarter of 2006 with Astound Broadband, a 197,000 household cable operator in the San Francisco area--but he confirmed that Google has begun working with the "top 10 advertisers in television." In April, Google expanded its TV Ads program to include national advertising inventory on EchoStar's 13.5 million household DISH Network in April, and Steib confirmed that Google is in talks with other major TV service providers.

He said the initial deal with Nielsen will enable Google advertisers to glean a better understanding of the audience composition of the digital TV households they reach via Google TV Ads, combining the best of Google's technology and census-based analytics with traditional TV industry measures.

"The focus of our business is that we have a technology platform that makes television advertising more measurable and more accountable from a workflow point of view," he said, noting that Google has been reporting millions of second-by-second data points to its TV Ads clients. While that has been attractive to marketers and agencies coming out of a digital orientation, Steib said Google is hoping the Nielsen demographic data will make TV Ads more accessible to mainstream TV advertisers.

"As we approached the television industry, the goal was to bring many of the benefits of online advertising in terms of accountability, optimization and measurement to the medium," he explained, adding that the process is reducing the costs of buying television by improving the workflow for advertisers and media buyers.

Steib said Google TV Ads has attracted some non-endemic TV advertisers from the offline world, and has renewed interest from some former TV advertisers--but that it's focused mainly on the traditional, bread-and-butter advertisers that make up the roughly $80 billion U.S. TV advertising marketplace, including most of the traditional advertising categories.

"Some of our advertisers are either new to television or are returning to television after a long hiatus. The ease of use and accountability of online advertising appeals to them," he explained.

He said the shift toward demographic composition data in no way signals a shift away from the kind of empirical, behavioral data that has been the basis of Google's online AdWords programs, and the pride of the online advertising community.

In the short term, he said, appending Nielsen's demographic data to Google's TV Ads clickstream data will make certain advertisers more comfortable buying and evaluating TV advertising via the system. Ultimately, he said, Google expects TV's interactive capabilities to improve to the point that it is generating the same kind of immediacy and backchannel as the Internet.

"In no way do we see that as a reversion," Steib asserted, adding: "When you talk about Google AdWords, there's a person sitting there with a mouse and a computer that can go right to a Web site and give you instant accountability. That doesn't exist in television today."

As for the burgeoning relationship between Google and Nielsen, executives from both companies implied this is the first step in what is expected to be a deeper and long-term relationship. Other likely elements include collaborations between Nielsen Online and Google, said Dave Thomas, president of media client services at Nielsen.

The two companies do indeed seemed destined to move in similar directions. As Google expands its leverage beyond its dominant base of online advertising into television, radio and print media, Nielsen is leveraging its dominance of the television marketplace to extend its reach online, into mobile and portable media technologies as part of its so-called A2/M2 initiative.

The deal also signals something of a détente from earlier this year, when Nielsen executives spoke with anxiety of Google's TV measurement plans during presentations at industry conferences and in calls with Wall Street analysts.

During an Advertising Research Foundation conference in New York in April, Nielsen Co. CEO David Calhoun expressed some anxiety, as well as some upside in Google's inroads into television. "Our only choice is to think about Google as creating opportunity," Calhoun said, repeating: "Our only choice."

How broad a role Google might ultimately play for Nielsen Co. is anyone's guess--but Google currently has a market capitalization of $211 billion, and Nielsen Co. is controlled by a group of private equity firms that ultimately plan to re-sell the firm to strategic buyers or the public market for a sizable profit.

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