Google considers selling broadcast advertising

Late on April 2, Google announced that it plans to sell advertising to broadcasters in an attempt to mimic the success it has had with its AdSense system, which allows anyone to buy online ads targeted to potential customers.

Google's first television partners will be satellite companies EchoStar and Astound Cable. Advertisers will bid against each other to determine the price of available slots based on factors that include time of day and TV channel.

Google's AdSense program for online advertisers charges them per-click; the television system would be similar, according to VNUNET.com; advertising charges would be based on the number of viewers, and advertisers would be provided with a detailed audience report through data collected from set-top boxes.

According to an April 2 Boston Globe report, Google already has 1,000 employees in its radio advertising division. Industry watchers also speculated that Google's executives realize that the online advertising market may plateau, leaving Google needing new sources for growth.

The company's dive into TV ads naturally has some worried. The Globe reported that some in the radio industry have regarded Google with a suspicious eye, fearing that the company's approach to selling ads could commoditize the business and cause broadcasters to lose relationships they have built with advertisers.

"It is a different model for selling radio advertising and it is controversial within the industry," said David Benjamin, president of Triad Broadcasting, which owns about 40 stations in six markets, in the Globe report. "There are those who believe that it could commoditize the product, leading to lower rates."

Benjamin agreed to try Google's system at some of the company's stations, and he said in the report that it has worked well so far, but added, "Am I a 100 percent believer? No. I just don't know."

However, Google's "self serve" advertising system could open up TV advertising to new buyers. "If you use some of the things that we understand about finding appropriate value and targeting, we might get folks who haven't advertised on radio before to advertise now," Douglas Merrill, vice president of engineering at Google, told the New York Times News Service. "New advertisers appear at the party. With those advertisers comes new money; with those, rates rise."

VAB Informal Poll

This is an informal poll and there is no guarantee implied or otherwise that the results accurately reflect the position of the VAB or any of its members.