Google Still Slow to Attract New Advertisers to TV

The upcoming switch to digital TV may bode well for the survival of Google’s TV Ads program, despite recent closures of its print and radio businesses. However, as with the failed print and radio experiments, the firm has yet to deliver on the key promise it’s made to its TV partners: to usher in a new crop of advertisers. Direct response TV ad buyers have great things to say about Google TV, but the company faces several obstacles to the success of its last remaining traditional media operation.

Google will not reveal details on what types of advertisers are adopting its system; however, all signs point to DRTV media buying agencies comprising the bulk of those clients. Although a lot of direct response TV advertisers also run search campaigns, this is a far cry from the promise of small contractors or Realtors flocking to place television spots through Google’s Web platform.

Even media buyers who are thrilled with Google’s efficient, data-centric platform don’t expect the do-it-yourself ad model that drives the search ad business to propel small search advertisers toward television. “You need a professional,” said one media agency exec who asked to remain anonymous. Not only do small business owners have little time — or even desire — to learn about TV advertising or create an ad, he argued that novice advertisers don’t realize they may not see a positive result from a TV ad trial right away, prompting them to get frustrated and give up.

Google last month officially launched a free ad creation tool through a relationship with SpotMixer, potentially opening the door to advertisers without pre-existing TV spots. The firm also pairs advertisers with ad production services. Yet, even Google admits the notion of creating and buying television ads is far more daunting to many smaller advertisers than building text ads for search campaigns.

Recognizing some small businesses just won’t want to make the effort to run television ads in the down economy, a Google spokesperson said, “It will always be a barrier for any sort of advertising efforts…but the point is well taken and I think we understand that.”

Google’s search product has always appealed more to advertisers with direct response oriented goals, so it comes as no surprise that direct response TV advertisers have gravitated to its television buying platform. But Google wants to attract brand advertisers — typically a natural fit for TV — to its TV product. The company touts its brand TV advertisers including Allstate, Lenovo, and Johnson & Johnson.

Unlike brand advertisers which are typically concerned with the quality of programming or content their ads are adjacent to, many direct response TV buyers consider media to be a commodity. Their goal is to drive ROI in the most cost-effective manner, and they rely on measurement data and campaign optimization to do it.

“I feel that media is a commodity and we trade it just like a commodity. And it is driven by supply and demand,” said Lynn Fantom, CEO of Interpublic’s ID Media, a DRTV media buying agency that has been using Google’s TV platform since its early days in June 2007.

Google’s data-centric TV offering has fans in the DRTV sector. So it’s fitting that the company has added reporting capabilities such as time-shifted viewership reports showing when ads were watched during recorded programs. Google told ClickZ News it intends to introduce hourly ad performance reports, showing how well ads perform during different times of the day or night.

“We’re always optimizing,” said another DRTV media agency exec who uses Google’s platform every week. “It’s just that the Google TV platform gives us a whole lot more data than we can typically get from other networks.”

At this point the system offers inventory from EchoStar’s DISH satellite network, along with ad slots in NBC Universal cable networks including Sleuth and Chiller, and on Bloomberg and the Hallmark Channel. The company promises to introduce inventory in other NBC networks in the future, across all dayparts, including primetime. Google said its network reaches up to 54 million households.

“We think that there’s a real value in the long tail and torso inventory that is out there,” said the Google spokesperson, who defined long tail and torso inventory as “more niche” and “not as mainstream.”

Though some direct response advertisers seem less concerned about the time of day their ads run, many advertisers or agencies — particularly brand advertisers — aren’t willing to place their ads against non-premium overnight programming. Some contend the quality of Google’s TV ad inventory is lacking, which is a problem that may have crippled its radio ad program. One DRTV advertiser who was displeased with Google TV after running a test campaign through the system recently wondered why a network would want to make premium inventory available through Google.

Another TV ad exec who also spoke on condition of anonymity concurred, stating, “The fact is that the sellers don’t want this to extend into things that are valuable.”

The company is also losing out on local media buys. Currently, Google has no way of targeting TV ads to specific localities. DRTV buyers that use Google for national campaigns often run regional and local campaigns on behalf of ad clients, too; yet, Google is missing out on those local budgets. A lack of geo-targeting capabilities is also a deterrent for local and regional search advertisers Google would like to try the TV product.

Keith Cohn, partner, at integrated marketing firm C&M Marketing and Communications, is a frequent user of Google’s TV program for his DRTV clients, but can’t use the system for a client that only advertises in certain markets where it has affiliates. Google has said it plans to work with NBC to enable the system for local market use.

Those familiar with the TV system point to another downfall that also plagued Google’s radio offering. “There is an inherent weakness in that you cannot develop a strong reach and frequency strategy,” said a DRTV exec. He lamented the fact that, because advertisers can always be outbid before their ads run, the system cannot predict how often an ad will be shown in a given time period, or how many viewers it will reach. This sort of information, and guaranteed placements, are available to advertisers buying through traditional processes.

The program also may be up against similar systems aiming to make TV buying more efficient via digital platforms. StandBuyMedia, a radio and TV-buying system from Media Commerce Systems, allows buyers to make offers to multiple networks in an efficient manner. More than one DRTV buyer ClickZ News spoke with for this story has been in contact recently with Media Commerce Systems or similar firms.

Many regular Google TV ad buyers have a positive view of the system and the service Google provides to its TV advertisers; yet even they are not entirely confident that the operation will survive, especially after seeing the print and radio programs die.

Google’s radio ad execs “were 100 percent caught off guard” by the company’s decision to shutter the program, said one DRTV buyer who also used Google Audio Ads.

Another observer suggested the TV product won’t take off until it enables more refined targeting and ad message customization. “I really don’t think that their system has enough value-add until addressability gets introduced.”

UPDATE: Google originally told ClickZ its network reaches up to 127 million households, but after this story published, revised the number to up to 54 million households. Also, the story originally noted that the Google spokesperson recognized some small businesses won’t want to make the effort to run TV ads. In clarification, the story has been altered to reflect the spokesperson was referring to all types of television ads during the down economy.