Backchannelmedia

Business 2.0 Beta, April 4, 2007

Google's Rival TV Ad-Trackers

by Owen Thomas

Since Google executives started talking about selling TV ads two years ago, and began hiring engineers for the project last fall, the hype and anticipation about Google's television foray has only grown.

That's precisely what makes Google's (GOOG) recent announcement with EchoStar (DISH) so disappointing. Google's not just failing to innovate; it's entering an already-crowded market of startups and small tech companies working on improving the performance of television advertising.

Here are the existing players Google's taking on:

• Everstream- A division of Concurrent Computer (CCUR), Everstream already tracks ad- and content-viewing data for EchoStar, Cox, Comcast, and Time Warner Cable, among others.

• Rentrak- Comcast uses this company, which started out tracking usage at video-rental stores, to track video-on-demand watching.

• Nielsen- The venerable TV-research firm is working with Comcast on analyzing set-top box data.

• Backchannelmedia- Taking a different approach, this company measures response to television ads, rather than viewership.

Something to remember is that all of the players, including Google, are playing with more or less the same data garnered from cable and satellite set-top boxes, which has inherent limitations. All they can do is tell you that the set-top box is tuned to a particular channel, not that anyone's in the room watching it, or, indeed, if the TV is even on. (My remote control often manages to turn off my TV without turning off my set-top box.)

Even with that limitaiton in mind, actualy tracking what the set-top box is doing second by second requires a massive amount of storage. Everstream executive Barry Hardek, whom I spoke to yesterday, points out that someone's got to pay for storing that second-by-second data, and the service providers Everstream works with, to date, haven't been interested in paying for that. (That's where Google may actually have an advantage, since it's used to dealing with a huge volume of information in searching the Web.)

Once you have that data, what good is it? For small cable channels not tracked by Nielsen today, set-top box data may have some value in establishing actual audience numbers. But beyond that, viewership data doesn't really tell you much. There's no equivalent of click-through, as there is with Google's Web ads, to tell you that a particular person is actually interested in an ad.

And then there's the real problem: Regulations and strict privacy rules at cable and satellite providers make it almost impossible to target ads down to the individual. Instead, Google and its competitors are stuck with the crudest kind of demographic and geographic targeting. While that may be a modest improvement over the untargeted advertising available today, it's hardly the revolutionary move that Google's pay-per-click Web advertising represented.