[privacy] Google Gains on Goal of Controlling And Targeting TV Commercials

["'Richard M. Smith'" <rms () computerbytesman com>]

http://online.wsj.com/article/SB117349709482933055.html?mod=todays_us_page_o
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Google Gains on Goal of Controlling And Targeting TV Commercials


By KEVIN J. DELANEY and PETER GRANT
March 10, 2007; Page A1

Google <http://online.wsj.com/quotes/main.html?type=djn&symbol=goog>  Inc.
has established a toehold in pursuing of one its next big ambitions:
controlling which television ads viewers see and tailoring them to
consumers' interests.

The Mountain View, Calif., company honed the highly profitable Internet
model of search advertising -- that is, selling ads targeted directly at
consumers based on the terms they enter into Web search engines. Last year,
the eight-year-old company racked up more than $10 billion of revenue by
brokering online ads for itself and its partners.

Now, Google has begun a test run serving up TV commercials to cable
subscribers in Concord, Calif., people familiar with the matter say. The
pilot project to bring its approach to cable boxes represents a foray into
the $54 billion U.S. market for TV advertising -- much bigger game than
Google's online turf.

Google since last year has been steering TV commercials to subscribers of
cable provider Astound Broadband, a unit of WaveDivision Holdings LLC,
according to four people familiar with the matter. When Astound's customers
watch TV, some commercials spots they see have been sold to advertisers by
Google and delivered to the cable company so they appear in the normal
breaks in programming as other ads do.

While the effort is in its early stages, it underscores how Google could
bring changes to how TV commercials are sold and delivered to viewers. Other
Internet companies are also pursuing an entree into TV advertising, and any
major Google success could eventually challenge the traditional TV and
advertising powers.

If the system is successful, Google could eventually try to establish itself
as a middleman for purchasing TV spots, furthering its stated goal of
offering advertisers one-stop-shopping across virtually all media. There is
no assurance, though, that Google can repeat its success in online-search
advertising -- a field in which it had little serious competition -- in the
crowded, highly competitive arena of conventional media.

Google Chief Executive Eric Schmidt in January told analysts the company is
experimenting with TV advertising, without offering specifics. But he said
the company intends to use its technology to better target TV commercials to
viewers. Rather than every household seeing the same commercial, Google in
theory might tap databases with information about the demographics of an
individual's neighborhood and examine the content of the program being
watched at a given moment to better select which ads to beam through the TV.
So, for example, a household in an area with lots of children might be more
likely to see commercials for minivans than for sports cars.

While federal privacy law restricts what cable companies can do with
"personally identifiable information," the theory is that consumers will be
better served seeing ads more relevant to them and will perhaps agree to
share information about their habits and interests with Google. Such data
eventually might allow Google or others to more specifically tailor ads to
individual households -- such as showing ads for dog food to viewers who own
dogs.

"Advertisers in particular will pay much higher rates for ads that are
targeted than ones that are untargeted," Mr. Schmidt noted.

The Concord effort, being conducted with a small group of advertisers, is
aimed at testing the computer and network infrastructure needed for Google
to broker and deliver commercials to cable systems more widely. In the test,
advertisers are buying commercial placements through an auction system,
people familiar with the matter say. But it is at an early enough stage that
the buys are being handled manually by Google salespeople, rather than
through a full-fledged automated auction like the one Google uses to sell
ads online, one of the people says.

At this stage, the commercials aren't targeted to specific households in
Concord, which isn't far from Google's Northern California headquarters,
people familiar with the matter say. And the company likely won't on its own
tap information about a specific household's buying patterns or other
behaviors in order to choose the commercials because of the privacy
concerns, one of the people says.

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