Google’s Plan to Dominate TV

January 10, 2012 • Blog, Display, Search, Video • Views: 514

When most people think of Google, they think of search, Gmail, and Android. But flying under the radar of these hugely successful products is Google’s concerted, multi-prong effort to push into the TV industry.

It’s no surprise that Google’s eyeing TV. While the search giant dominates more than 44% of global Internet advertising, TV ads are a much bigger target, representing more than 40% of total global ad spend.

With billions of TV ad dollars at stake, Google’s attacking TV from all sides. The combined strategies of Google TV devices, YouTube as a content creator, and Google TV Ads, all meet at the same intersection point, in a world where Google wants take over television.

Google TV Devices

Connected TV is a technology on the tipping point of becoming mainstream, and Google is poised to lead the broad consumer adoption of the “smart” TV.

While Google’s been in the TV-device market for a while, last year’s GoogleTV launch faced some serious problems. Consumer adoption was low, devices were buggy, and reviews often poor. Initial launch missteps even caused Google partner to Logitech to loose an incredible $100 million on GTV devices.

However, Google seems undaunted by these failures, with chairman Eric Schmidt boldly claiming that next summer, “the majority of the televisions you see in stores” will be equipped with Google TV.

This ambition, while optimistic, might not be totally unfounded. The currently in-progress Consumer Electronics Show will reveal Google’s hardware partnerships with many major electronics manufacturers, including Samsung, Sony, LG, and Lenovo.

YouTube’s Push for TV Content

As the world’s most popular online video destination, YouTube obviously has huge potential to power Google’s TV offerings. And while YouTube’s popularity has a lot to do with 30 second videos of cute kittens, Google’s recently been stepping up YouTube’s viability as a true TV-content destination.

In 2010, Google launched movie rentals for YouTube, and although Google’s initial video inventory was small, it’s been growing fairly strongly since then. With HD support built-in from the beginning, YouTube’s video rental service seems to have been targeting big screens all along.

More recently, YouTube’s video portfolio has seen prominent upgrades. Late last year, Google announced a major video partnership with Disney, making hundreds popular titles like “Pirates of the Caribbean” and “Cars” available for rental on YouTube. Disney joined Sony, Comcast, and Warner Brothers, who had already been offering major motion pictures to YouTube users.

Beyond licencing content, Google’s recently made some heavy investments in generating content uniquely for YouTube. In October of 2011, Google announced plans to add more than 100 channels of unique content to the YouTube lineup. These channels will include content from publishers like Reuters, Jay-Z, and The Onion, who will produce not just a few videos, but an ongoing stream of content uniquely for YouTube.

This investment in original content didn’t come cheap – Google has secured these partnerships by laying out over $100 million in advances, a figure that Google hopes to recoup quickly through advertising revenue. For this investment, Google predicts that these YouTube channels will produce up to 25 hours a day of unique, niche content, that will not only attract viewers, but also advertisers looking to target precise audiences.

Google TV Ads

Google TV Ads is a system which allows advertisers to run TV ads directly through AdWords. Although many web marketers may not be familiar with the program, those familiar with AdWords will find it amazingly simple. In virtually the exact same way that search keywords and display placements can be bought, Google TV ads allows advertisers to upload a commercial, make simple targeting decisions, and run ads on actual TV programming.

The technology is impressive, and the basic value is obvious: bring the accuracy and accountability of web advertising to television. However, Google has traditionally struggled to build enough reach to attract serious advertisers. In 2009,  Russ Klein of Burger King noted, “The challenge for [Google] is scale…We don’t see anything seismic here right now.” This sentiment seemed to be echoed by most major brands, who generally haven’t adopted Google’s platform.

Google’s obviously aware of this challenge, and is working to grow their inventory. On January 9th, Google announced a partnership with Cox Communications, the 3rd largest cable operator in the US. Along with Cox, Google also has deals with DIRECTV, Verizon FiOS, and Viamedia, and is now at a total of reach of 42 million American households.

Between Google’s growing TV ads reach, YouTube’s increasing content inventory, and the emergence of Google TV devices, Google’s ambitions are clear. Google’s got the three core elements of television – the ads, the content, and the devices – all lined up, being developed separately but ultimately destined to converge.  When these pieces come together fully, Google might be able to revolutionize both television and the Internet in one fell swoop.

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