History Informs Google’s Latest TV Land Grab

TrifectaWill Google’s grand plans for TV, evidenced by its launch of DoubleClick Dynamic Ad Insertion on Wednesday, be successful?

Google’s move into dynamic ad serving across live, linear and on-demand programming marks a critical shift in the search giant’s strategy, which some industry insiders say was necessary to meet future business objectives.

“Google will not be able to grow market capitalization if it can't access the advertising dollars currently spent on television,” said Dave Morgan, the founder and CEO of TV audience platform Simulmedia. “Google must continue to attack the TV ad market from all sides – YouTube, Google Fiber and, now, DoubleClick video ad serving. They clearly want to penetrate as many parts of the ecosystem as they can.”

Google first entered the TV space in 2007, with its “TV Ads” product, which applied an auction-based model akin to AdWords to television.

But the company shuttered the business four disappointing years later, after it realized slapping a web-based model onto a legacy business like TV, wouldn’t work.

With DoubleClick Dynamic Ad Insertion, Google was more cognizant of TV infrastructure requirements. Consequently, it rebuilt components of its digital-focused stack to be TV- and video-first, said Rany Ng, director of video ads for Google.

Dynamic Ad Insertion needed to apply nondigital functions to a TV commercial ad load, including added context around programming, competitive separation and frequency caps. It also needed to support the ability to reserve inventory for certain distribution partners.

Because Google didn’t just want to tackle the linear TV opportunity, DoubleClick Dynamic Ad Insertion was groomed also for video-on-demand and over-the-top inventory.

“We had to move beyond being a desktop and mobile ad server to enable seamless cross-screen monetization, regardless of where the ad is served – connected TVs, game consoles, to even the traditional set-top box,” Ng noted. “We also needed to be able to inform a broadcaster’s or distributor's ability to forecast based on the content schedules and seasonality.” 

One small but important piece of the TV stack came through Google’s acquisition of video ad startup mDialog in 2014, a tool that helped broadcasters stream and monetize content across iOS, Android and connected TV devices like Roku.

Last April marked its first integration with the DoubleClick stack and Google had tested the solution with beta broadcasters before it rolled out DoubleClick Dynamic Ad Insertion this week.

But transitioning traditional TV programmers to new digital distribution points like connected TVs and set-top-box VOD requires more than the basic ad decisioning, yield management and forecasting functionality common in linear.

For instance, some programmers were concerned about a lack of support for dynamic ad insertion in both live and time-shifted content on OTT. Technological gaps still exist between broadcaster’s linear TV and digital planning systems and their set-top-box or VOD inventory.

“This was precisely why we’ve decided to go deeper into the video technology stack,” Ng added. “To bring TV scale and reliability to this technology we scaled the mDialog technology across the Google ads platform.”

MDialog solved a critical need in Google’s stack, namely by providing “adaptive” streaming capabilities for VOD and IP-enabled devices; in other words, it provided support for more variables in streams irrespective of channel.

Addressable advertising is a formidable area of growth for traditional programmers.

Much of Google’s early-stage work has been in VOD, particularly beyond the C3 window. Ng cited this as one reason why Google is enabling programmers to dynamically stitch ads into set-top-box VOD through DFP.

“We see more opportunities for [dynamic ad insertion in] set-top-box VOD coming to market globally in 2016.”

Bracing The Buy Side For The ‘Google TV’ Buy

2014-2015 read like a novel: “The Year Google Courted Brand Budgets.”

Google aggressively sought to create the perception YouTube was a “premium” video environment.

“Programs like Google Preferred and Partner Select were a way to cut through the clutter because there was still this perception that 95% of YouTube was still cat videos,” said one source with knowledge of Google, who requested to remain anonymous because of their relation to the company.

“A lot of this stuff is bought on tonnage still, with major upfront deals and commitments from the OMGs and GroupMs of the world,” that source added. “We’re looking at billion-dollar deals.”

With Google’s move into dynamic ad serving for linear, OTT and VOD, it’s reasonable to expect the company’s next move will be packaging new features such as TV listings within search, YouTube and cross-screen ad placements to buyers.

From a sales standpoint, it’s unclear what will funnel through Google’s own demand-side platform, DoubleClick Bid Manager and the company’s own direct sales teams versus third-party DSPs, many of which have growing relationships with TV programmers through direct-order deals themselves.

In other words, what worked with its own platform YouTube (removing third-party DSP access to YouTube inventory on the DoubleClick Exchange) might not fly with the big TV buys outside of Google’s own control.

Some buyers say they’re waiting on Google to share more details around its converging TV and video stack, too.

At face value, it’s difficult to gauge the full impact of Google’s new TV products until there's clear evidence MVPDs have chosen it over incumbent providers like FreeWheel, BlackArrow (now part of Cadent Technology), Invidi and Visible World.

“From an OTT standpoint, I think that would represent more immediate opportunity for DFP customers,” said Patrick Rubin, director of advanced TV strategy and investment at Dentsu Aegis.

The key pitfall, however, is few OTT providers have organized their registration data for audience targeting or one-to-one device targeting yet, he said, “which seems to underpin the Google announcement” for dynamic ad insertion based on audience at an impression level.

But that’s a 2016 problem and Google’s eyeing the long game.

 

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