Last month, Google announced that Google Fiber (its ultra-fast broadband and interactive TV service which is being trialled in a handful of US cities) will now include real-time programmatic TV advertising. This is intended to help advertisers in two ways: (i) by enabling advertisers to assess the success of their TV ad campaigns; and (ii) by allowing advertisers to target TV ad campaigns at specific audiences based on their demographics and previous viewing history.
Background to targeted advertising on TV
Traditionally, TV content has been delivered by a one-to-many broadcast: all television sets receive the same transmission and the same content. The practical reality of TV broadcasting has therefore meant that in the past the same TV adverts have been delivered to all TV sets at the same time, without the adverts being tailored to specific audiences. Whilst the advent of VOD and equivalent services online has given advertisers better opportunities to place relevant adverts alongside TV content, in terms of live TV broadcasting, adverts on TV are some way behind digital ads when it comes to targeting audiences and tracking audience engagement.
How will Google Fiber address the challenge of delivering targeted adverts on TV?
In the past, Nielsen (the TV ratings agency) has estimated TV viewing figures based on a sample cross-section of society who happen to have a Nielsen box installed in their house. The box determines audience engagement with an advert by registering who sat through the advert and then multiplies that out to create an estimate of viewing figures. The difference with Google’s new service and others like it, such as Sky’s AdSmart in the UK, is that all households which are delivered adverts through Google Fiber will also have a Google Fiber box installed, which is able to track and register individual household’s viewing habits and then overlay relevant adverts. This means that the measuring of audience engagement (and the success of an ad campaign) is much more accurate and granular, as it shows which individual households were happy to watch particular adverts (or at least those households which did not change the channel!). This then enables advertisers to build a more detailed picture of which households respond to their adverts and to run more efficient TV campaigns in future. According to Google:
“Fiber TV ads will be digitally delivered in real time and can be matched based on geography, the type of programme being shown, or viewing history. Like digital ads, advertisers will only pay for ads that have been shown, and can limit the number of times an ad is shown to a given TV.”
From a commercial perspective, whilst TV advertising has yet to catch up with digital advertising when it comes to targeting audiences, it has remained a consistently strong source of revenue for broadcasters (with consistent year-on-year increases of 10% on TV ad spend according to AA/Warc). As such, broadcasters have largely been content with the status quo of TV advertising. But as services like Google Fiber, Sky’s AdSmart and others like it, begin to expand and become more effective, advertisers may begin to expect more tailored and targeted TV ad campaigns from their media spend.
ADTEKR is currently considering these issues and the future of programmatic TV advertising in depth. Look out for our in-depth report to be published soon.