Google is setting its sights on the lucrative television advertising market, which is worth around $70 billion a year in the United States alone. The company is working with satellite broadcaster EchoStar to explore ways of transforming the business of television advertising. It is also believed to be in talks with DIRECTV.
Eric Schmidt, the chairman and chief executive of Google, will address members of the television industry in a keynote presentation at the National Association of Broadcasters annual convention in Las Vegas.
Google is hoping to extend its success in online advertising to traditional television commercials. The search company has entered into a partnership agreement with EchoStar to introduce an automated system for buying, selling, delivering and measuring adverts on the Dish Network in the United States.
The alliance is currently limited to a trial of a portion of the advertising inventory on the Dish Network. It is believed that it will involve analysing anonymous data from the set-top boxes of satellite television subscribers. However, only a proportion of subscribers have a return path enabled to provide interactive services.
Charlie Ergen, the chief executive of EchoStar said: “Through this groundbreaking partnership with Google, we are confident we will be able to bring increased efficiencies to Dish Network’s advertising sales and more accurate, up-to-date viewer measurement with easily accessible online reporting to advertisers.”
Eric Schmidt has said that the Google partnership with EchoStar is important as the company begins to offer a television advertising more broadly. “We think we can add value to this important medium by delivering more relevant ads to viewers, providing better accountability for advertisers and better monetize inventory for TV operators and programmers.”
There has been speculation that Google is also in talks with DIRECTV, the leading satellite television platform in the United States. DIRECTV is expected to come under the control of Liberty Media, headed by John Malone, following recent approval of a share deal by News Corporation shareholders. This will see Rupert Murdoch leave the satellite television market in America while strengthening his control of News Corporation.
There has long been a view that DIRECTV and EchoStar could ultimately join forces, subject to regulatory approval.
Vincent Dureau, the former chief technology officer of OpenTV, which provides interactive television software for EchoStar, last year became head of television technology at Google.
As previously reported by informitv, Google has previously piloted an advertising project with Astound Broadband in the San Francisco suburb of Concord, California. However, Google may face more of a challenge in engaging major cable television operators like Time Warner, Comcast or Cox, who seem to feel that they can manage advertising without the assistance of the search company.