The Wall Street Journal is reporting (paid sub. required) that Google is now testing TV commercials that it sells, showing them to cable customers in Concord, California (a city best known to me as home for my mother and sister — guess I have an excuse to visit them more). Some highlights from the story (I’ve added the links):
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….
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….
A spokeswoman for WaveDivision couldn’t be reached for comment, but an executive with Astound, which has more than 25,000 subscribers, confirmed the test with Google is taking place.
Google’s been saying for some time that it would be moving into television, and details of planned "scatter buys" came out last week, plus the company did say it was experimenting with TV ads during its earnings call last January. This is the first confirmed implementation of any experiments, however.
Related Topics: Google: TV
I think that pent-up frustrated niche advertisers could quickly saturate inventory. We’ll probably see an increase in placment costs that will “seek their own level” with other ways of buying time. Inventory expansion to billboards, games, software on demand, and web video distribution would have their own dymamic.
The personalization is the wildcard – saturation by major buyers could simply take away the ability for focused buys from niche businesses. I suppose we’ll soon see some sort of quality score on video ads as well. Now that will be interesting.
@Scott – very interesting point on saturation from the huge buyers – perhaps a very important issue in the beginning when there would likely simply be more custom buckets, rather than completely customized ad inventory streams, but seems like with the ultimate more customized (individual level) streams, there would be too much inventory for even the mega buyers?