Wednesday, 03 May 2017 15:29

What Google’s Newest Venture Says About the Future Of TV Ads


Back when Alphabet Inc. was just a massive search engine called Google, skeptics wondered whether the company was a one-trick pony. Search was a cash cow, but then what? There was no clear diversification plan. Flash forward to today, with Google’s DoubleClick and YouTube the reigning forces in display and online video, and the skeptics seem to have gotten their answer. Alphabet is a company that’s diversified to own the digital present, and its future.

Or maybe not. Facebook, not Google, owns the social space. And while video views on Facebook may have been overstated in the past, the social network is clearly poised to compete with Google’s video business long-term. Plus, there’s another looming question in Google’s future: digital convergence.

Ten years ago, linear and digital advertising were completely different worlds. A year from now, 6% of the TV ad market in the United States will be managed programmatically. At some point along advertising’s long path to convergence, close to 100% of the TV business will become a linear TV/digital hybrid. Given that digital and TV ad spending are currently neck-and-neck, the convergence of linear TV and digital advertising will bring every digital player into a much larger, more diverse world. In that new world, “who wins” will depend largely on who adapts best to working with the other end of the digital/traditional divide.

For digital players—Google among them—this means being ready for the future means being ready to sync with new partners from the traditional media ecosystem. But based on its track record, Alphabet faces real hurdles in getting the offline traction it needs. The company’s Fiber cable businesses—a potential access point into television—has achieved extremely low market penetration over its seven years since launch. In 2014, Google went deep into marketing analytics with the acquisition of analytics player Adometry; a Forrester report published last October finds Google strong in online measurement, but relatively weak when it comes to offline measurement. Finally, Google’s previous foray into TV ad buying—its Google TV Ads program—was shuttered in 2012, largely, I argued at the time, because of Google’s miscalculations around how TV ad buyers execute their work. Based on what we’ve seen to date, it’s not clear much has changed in the nearly five years since then.

On Monday, Google announced that its new foray into the TV ad buying business would center on allowing marketers to manage programmatic TV buys through its DoubleClick Bid Manager. While any major announcement from Google stirs interest, this one was met with some deep skepticism surrounding the unknowns. One open question is what kind of TV ad inventory DoubleClick can actually provide. Another is whether DoubleClick can bring its TV buying offering into the full process of TV ad operations—or whether, instead, it will deal with TV ad buyers in a vacuum, cut off from the broader strategy and systems that guide their work. If it’s the latter, that could be a real sticking point for TV media agencies considering using the platform. Compounding these and related issues is the complicated relationship that Google—the constant “frenemy”—has with those same media agencies, for which Google plays the sometimes-contradictory roles of technology provider, media seller, and, in the long run, potential displacement threat.

When we talk about winners and losers in a converged advertising ecosystem, we tend to focus on whether the traditional media players can function in a digital future. But the digital businesses will be disrupted by the coming convergence, too. For every time we ask whether the traditional businesses can go digital, we also need to ask whether the digital players can go linear. The answers to both questions will determine the future of the ads industry.


Bill Wise is CEO of Mediaocean. Google is not a client of Mediaocean

This article was  published in fortune.com by Bill Wise


Association of Internet Research Specialists is the world's leading community for the Internet Research Specialist and provide a Unified Platform that delivers, Education, Training and Certification for Online Research.

Get Exclusive Research Tips in Your Inbox

Receive Great tips via email, enter your email to Subscribe.

Follow Us on Social Media