Google Gets into TV Ads with EchoStar

Internet titan Google is set to enter the TV advertising business, inking a deal with EchoStar to automate buying, selling, and measuring the effectiveness of TV ads.

Google might be best known as an Internet search engine, owner of YouTube, and a purveyor of Internet-based services like Gmail, but the heart of Google’s billions currently lies in its advertising business. Today, Google launched that business in a new direction, announcing a partnership with satellite TV provider EchoStar to roll out an automated system to buy and sell ads on EchoStar’s DISH Network’s 125 channels. Google’s system will also be responsible for delivering the ads and, of coure, measuring their overall effectiveness.

"Our partnership with EchoStar is important for us as we begin to offer a TV advertising platform broadly," said Google CEO Eric Schmidt. "We think we can add value to this important medium by delivering more relevant ads to viewers, providing better accountability for advertisers and better monetize inventory for TV operators and programmers."

"DISH Network is focused on improving all aspects of our business, and advertising is no exception," said Charlie Ergen, EchoStar’s CEO. "Through this groundbreaking partnership with Google, we are confident we will be able to bring increased efficiencies to DISH Network’s advertising sales and more accurate, up-to-date viewer measurement with easily accessible online reporting to advertisers."

Google’s system aims to bring the fine granularity of ad reporting that the company instituted for its online advertising services to television, enabling even niche players to rate the effectiveness of their advertising, more precisely identify their viewers, and let buyers more accurately identify audiences which may be receptive to their pitches or products. According to sources familiar with Google’s system, advertisers will be able to access near real-time feedback and performance figures which will enable advertisers to assess and tweak their advertising campaigns as they unfold, rather than waiting werks (or months) for performance data from pay-TV operators or media metrics firms. Although no data on individual viewing habits will be available to advertisers via Google’s system, the technology will enable advertisers to target customers by highly specific geographic or demographic groups, sometimes as small as a few dozen viewers.

Google’s partnership with EchoStar is a strong start, and marks Google’s first deal with a national pay-TV operator. However, if Google is serious about the $70 billion television advertising business, the company will have to work hard to gain inroads with cable operators like Comcast, Time-Warner, and Cox Communications. Large-scale cable operators have historically guarded information on customer viewing habits with a great deal of zeal, which has left the bulk of television and advertising metrics measurement to industry stalwart Nielsen Media Research, which, although its methodology and figures have repeatedly come under fire over the years, remains the dominant player. However, as advertisers increasingly look to integrate television advertising with online marketing campaigns, Google’s dominance of the online ad world—and the enormously finer granularity of its audience data—may help the company make inroads into additional pay-TV outlets.

EchoStar is set to begin live testing of Google’s advertising system in May; once the system is up and running, EchoStar plans to let Google sell anywhere from 2 to 10 minutes of advertising per hour across its entire network; a typical broadcast hour currently carries 12 minutes of advertising.