Mobile Technology News & Mobile Fun

Google TV is all about blood sucking television ad spending

By Joe Wilcox, Betanews

Did you hear the news? The Internet is coming to your TV. It’s going to be this big platform for which developers create applications. Pundits are saying the strategy is really impressive. Get this: Major television set manufacturers are going to support the platform, so you get the best of TV and the Internet. Oh you did hear about it. Google TV, right? Wrong! I just described variations of Microsoft’s television strategy as announced over the years: Web TV, Windows Media Center, Mediaroom and Mediaroom for Xbox.

Did Google execs not hear about Microsoft’s mostly failed living room strategy, which Google TV shockingly sounds like? Several former Microsofties are now Googlers. Surely somebody knew about Microsoft’s past TV bungles. If Microsoft couldn’t make Internet TV work, why should Google do any better? Google’s strategy sounds so similar that I’m stunned by some pundit’s early cooing over the strategy.

Early Google TV partners include Intel and Sony. Google claims that Google TV won’t replace but augment cable or telco services. But that’s really a load of bull. As I will better explain in a few paragraphs, Google is really launching a TV advertising platform — and that sure as hell will compete with ads carried on cable and network television.

Google TV will run on Android 2.1, bringing along supporting apps and the Chrome browser, too. Much of the rest of the strategy — the program guide, the DVR, the developer opportunity, the Web-meets-the-living-room mumbo jumbo — is tried and tired. Companies from Dell to Microsoft to TiVo — hell, even Apple — have talked up that big settop box augmenting but not really replacing the programming experience consumers get today. Each strategy is stamped with a big “Fail.” From software, services or platform development perspectives, Google isn’t saying much new. Even the marketing tagline has a familiar ring: “TV meets Web. Web meets TV.” Yeah, I’m just blowing my brains out with enthusiasm for this same old failed thing.

It’s All About Advertising

What Google wants from the living room is very different from Microsoft, although the fundamental concept is the same: To extend and preserve the existing monopoly — Windows for Microsoft and search/online advertising for Google. But Google is looking to cash in on a market with major players, who are likely to resist the informational giant’s embrace. For all the buzz in recent years about the decline of newspaper, magazines and radio, TV has remained largely immune to declining ad dollars — or at least massive shift online.

For years, television has been Google’s holy grail. Company executives have talked, often privately, about the importance of TV ad dollars shifting online. Google had its search and ad platform bucket out to catch those dollars, but they never really came. Google scooped up some advertising moving from print or radio to online, while waiting for TV advertising to do the same. It came only in trickles. So if the ad dollars won’t come to Google then, holy hell, the company will go get them. That’s really what Google TV is all about, scooping up television advertising.

In January, Forrester Research forecast that US TV advertising spending would rise slightly in 2010 to .5 billion. A month later, the analyst firm warned that, based on a survey of 100 national advertisers, media buyers were showing increasing dissatisfaction with television:

  • Sixty-two percent of advertisers complain there is too much clutter; they want fewer ads, and there is renewed interest in 30-second spots.
  • Seventy-eight percent of advertisers want targeted ads, but only 59 percent want to pay for them.
  • The majority of advertisers want new metrics; reach and frequency aren’t enough.

Forrester’s report might as well be a blueprint for Google TV. Google’s advertising business is all about targeting and metrics and delivered for low cost. Google could offer national advertisers what they want and something more: Better flexibility integrating ad campaigns across media categories. Microsoft talks about a three-screen strategy. Google has one, too — delivering search and advertising to mobile phones, PCs and TVs.

Who Will Give Up the Living Room to Google?

For comparison, US advertisers spent .7 billion online in 2009, down 3.4 percent year over year, according to IAB and PricewaterhouseCoopers. Online ad spending accounted for 17 percent of all US advertising in 2009. For this year, eMarketer forecasts US online spending will reach .1 billion — while an 11 percent increase, revenue falls far behind TV.

To push into the living room, Google is going to have to push somebody out. As Microsoft learned — and even TiVo — that’s not so easy. Cable and telco providers covet their subscription fees and local advertising revenues. Surely the big networks will fight against Google’s free economy, which could reduce the value of their ad space. Why pay networks big bucks when Google will sell ad space for much less?

Networks and cable and teleco providers have reason to worry, given YouTube’s popularity and some surprising data from the IAB and PricewaterhouseCoopers report. US online video ad revenues rose 39 percent to about billion last year. YouTube may yet be a big revenue generator for Google, which already offers rental content.

Would you stop paying big bucks to a cable or telco provider if Google TV could bundle up a tidy subscription price for good programming? Say 30 bucks a month? I would, but Google will have to get Hollywood to cough up the content against network and cable and telco provider resistance. That all circles back to Microsoft’s mostly failed attempts to conquer the living room, against less resistance. Can Google really do better? You tell me, please, in comments.

Copyright Betanews, Inc. 2010

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