Tuesday, November 24, 2009

Google and Tivo Team Up

While this is hardly a newsflash, Google is positioning itself to take over the advertising universe.  What's their latest move?  MediaWeek reported this today (read the whole thing here):

"Google has signed a license agreement with DVR company TiVo that enables the Internet search provider to integrate TiVo set-top-box viewing data into its measurement of audiences for ads sold through the Google TV Ads platform.

The deal adds approximately 1.6 million subscribers to the universe of set-top boxes that Google TV Ads has to draw on to analyze second-by-second TV viewing behavior of audiences. Google also has a deal with Dish Network and access to more than 13 million set-top boxes via the satellite carrier."

So What Does This Mean For TV Ad Serving and TV Ratings?

On one hand, this is a step toward the inevitable destruction of Nielsen Ratings by Google.  While Tivo customers are a smaller group than cable subscribers with DVRs, 1.6 million people is a big enough sample to make a huge difference for anyone who is gathering behavioral viewing data.  This data will help Google build even smarter profiles of segments.  Smarter profiles mean a greater likelihood of an ad reaching the right segment, and advertisers are willing to pay more.  If the advertisers like what Google is doing for them, they will begin to tell the media companies like Time Warner, Comcast, and Viacom that they want the same service that Google is giving them for their ad buys.  This will then force the media companies to either tell Nielsen to up their game and get the same viewer data, or the media companies and the advertisers will finally force Nielsen out and Google will replace one monopoly with another. 

On the other hand, this is a step in the wrong direction for Google if they really want to crush Nielsen.  As much as I love my Tivo, if Google wants to become the number one ratings research center and ad server then they have to introduce their own DVR and free service to consumers.  This is the sort of slap in the face that only Google can do to cable providers.  Right now cable providers have Tivo on the run.  By partnering with retailers to sell their services in stores, cable companies are getting retailers to exclude Tivo from their shelves and it's working.  (As a bit of anecdotal evidence, my girlfriend and I had to go to three different stores before finding our Tivo at a Best Buy.)  Plus, Tivo has the additional roadblock of the monthly subscription fee.  Some consumers would rather just have a DVR fee tacked on to their cable bill and not think about what they are not getting by owning something that doesn't work as well as a Tivo.  Google is the only entity that could get away with introducing their own DVR and taking away cable providers' revenue from DVR by promising higher ad revenues in return.  Besides, the cable providers would be able to save on the maintenance fees of their extremely cheap and poorly crafted DVRs that they currently have.

No comments: