Google abandons TV ad ambitions

31 Aug, 2012

After five years of trying to force the TV world to "go Google", the search company has abandoned its scheme to trade broadcast ads in the same way as it does online banner ads.

In a victory for the traditional media establishment against a digital insurgent, Google quietly announced in a blogpost on Thursday evening that it would close its TV Ads in Adwords product later this year.

The service, which at one stage partnered with NBCUniversal and the Hallmark Channel, was supposed to combine the speed, flexibility and targeting capabilities of the web with the emotional punch of the 30-second spot.

But amid resistance from some parts of Madison Avenue, Google struggled to obtain enough airtime upon which to sell ads.

"In 2007, we launched Google TV Ads in AdWords to bring digital buying and measurement technologies to traditional TV advertising. Since then, lots of our clients have bought traditional TV advertising for the first time," wrote Google's Shishir Mehrotra.

"However, video is increasingly going digital and users are now watching across numerous devices. So we've made the hard decision to close our TV Ads product over the next few months and move the team to other areas at Google."

The retreat comes despite new evidence this week that TV advertising fails to reach large portions of its target audiences. The news also follows remarks from Sir Martin Sorrell, chief executive of advertising group WPP, on Thursday that "Google as a media owner will rival our relationships with the biggest traditional media corporations around the world".

Google is pushing its popular YouTube video site to become more like a traditional broadcaster, with channels of professional and regularly updated content, in an attempt to attract more loyal viewers and more valuable advertising. It is also installing a cable network in Kansas City which will effectively make it into a cable TV operator akin to the likes of NBC Comcast.

But while Google is persevering in these ambitious attempts to reshape the media landscape far beyond its core search engine, its forays into traditional media have not always been successful.

In April, it closed One Pass, an attempt to help publishers charge for online content and create paywalls, after few customers emerged. Google TV, an internet-connected set top box, has also achieved limited popularity with consumers in its native US.

Dan Cryan, digital media analyst at IHS Screen Digest, a consultancy, said that Google's TV ads business failed due to a combination of industrial and technological factors, not least the logistical difficulties of showing digital advertising on live broadcast TV.

"The existing TV advertising business has a number of entrenched players with vested interests in keeping things the way they are and they control most of the ad inventory," said Mr Cryan.

"If you are a major broadcaster or pay TV operator, you are in a position to control the market and if people want to reach your audience they want to come to you. The battle Google was always fighting was to come up with a way to get around that control of eyeballs, which is an incredibly difficult thing to do ... None of them wanted to get into a position where Google was the intermediary selling the advertising and they effectively lost control." That would see broadcasters "reduced to a much more commoditised position", he added.

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