With Google TV Ads’ announced partnership to auction inventory across 11 national networks carried by DirecTV, the search giant begins to try to rebut skepticism about its ability to achieve significant reach. Now it must demonstrate the ability to generate healthy revenues, driven largely by SMB platform adoption, to avoid the pitfalls it suffered in similar newspaper and radio consortia.

DirecTV’s 18.7 million households, combined with Google’s existing relationship with Dish Network, more than double TV Ads’ overall reach to 33 million homes. The networks — including brands such as Bloomberg, FOX Business, Fit, Fuel and TV Guide — are generally lower-rated, with many highly targeted to specific demographics.

However, Google Ads will have access to local inventory across all dayparts, a breakthrough that previously impaired its perception as a primary TV advertising vehicle and was absent from the radio partnership.

For SMBs, there is a give-and-take. Google TV ads is effectively an extension of its lucrative, popular AdWords platform that enables businesses to create, target and track their own self-provisioned campaigns. As Mike Boland has written about extensively on this blog, the self-service nature of the platform can make the process more seamless for SMBs with existing AdWords accounts, which can tailor their buy according to channel, daypart, geography and demography.

Additionally, the tracking analytics that Google offers through data it extracts from set-top boxes can afford these advertisers a more transparent and targeted approach to offline spending.

If an increasing number of new clients are drawn to the service by its granularity, then advertiser demand may drive more traditional media companies — the more prominent names that have not opened up their inventory — to reconsider partnering with Google. To this point, most cable and telco providers, as well as prominent cable networks — the ESPNs, TNTs and USAs of the cable universe — have shied away from Google, not wanting to share their own audience data and fearing the possible commoditization of their inventory.

Conversely,  SMBs must adopt the Google TV Ads platform en masse for the search giant to sell at scale and generate substantial revenues. Again, this relies on self-service, which stems from both awareness and user-friendliness of both campaign creation and bidding. Much of that awareness connects Google TV Ads’ aforementioned reach-and-prominence dilemmas.

Colleen Brown, president and CEO of Fisher Communications, keynoted morning sessions at DSB 2010, arguing for a warmer embrace of new technologies that can unlock traditional TV broadcasters’ core strengths.

“Broadcasters have so many inherent strengths. In the barrage of coverage we receive sometimes we forget those things,” she said, citing content, brand recognition and intimate knowledge of local communities as examples. “We need to embrace technology to make sure those opportunities come to full fruition, and to diversify revenue streams.”

One example playing out at Fisher is a series of community sites. This started with 2007’s acquisition of Pegasus news (see past writeup), and has since evolved into a network of about 125 sites. These include user-generated content and 24-hour news reporters armed with iPhones for contributing timely (though rough) copy and images.

“We’re rediscovering the long tail of content and making it searchable,” she said. “As the ecosystem of news is becoming more vibrant, we’re providing UGC, local news reporting and historical content. It’s becoming the key currency to drive traffic to local advertisers.”

This opens a door for lots of local advertisers that previously didn’t have the resources to advertise on traditional television and radio, she argues. For Fisher, this has played out to the tune of 1,500 new local advertisers, which can be sold by a combination of traditional sales channels as well as new telesales for lower margin ad buys.

“As an organization, we need to be able to sell everything from a $60,000 television spot to a $35 directory listing. It’s okay to roll up nickels. they’re adding up,” she says. If a Web site brings in $2,000 per month, that’s not a lot in our business, but if you multiply time 150 sites and 12 months, that’s over $3 million.”

-Change is inevitable, although GROWTH from change is optional. The advertising ecosystem has vastly expanded – and is continuing to expand. In the process, consumption and consumer expectations have changed, standards have evolved, and a deeper level of understanding is required.

-Accountability is a key issue for advertisers – i.e. knowing just how their ads are performing. So there’s a big need to talk data, analytics, benchmarks, testing, iterative improvement and performance optimization.

-Integrated selling is crucial in this multi-platform environment; explaining how all the pieces work together (different ad formats and platforms). Without an integrated approach, it’s just “robbing Peter to pay Paul”.

-The whole concept of a “brand” is being re-defined, since a brand is now represented by both analog and digital media, community dialog, etc. “Learning about digital means learning how to redefine your brand”.

-“We’re not selling inventory any more; we’re now marketing partners with our advertisers (and their agencies)”.

-Agencies are evolving away from “media buying” towards “audience buying” (in fact, Leslie predicted that the phrase “media buying” will disappear from the advertising lexicon).

-Advertisers want a better connection and engagement with their consumers; they want to be part of the conversation.

-There’s a need to change advertiser expectations – there’s more to the story than just click-through rates. Other metrics, such as ad impressions (nuanced by frequency) need to be brought into the picture.

-The entire organization needs to understand digital media (i.e. not just a few designated specialists).

-Talent needs to be reshaped (and in some cases, re-hired). Leslie cited the example of People Magazine, which has created an “advertising editor” position, designed to make their digital advertisers’ ads richer and more resonant with their online viewers.

-Digital ad providers also need to be able to look beyond the ad itself – for instance, to look at the landing page (to gain a richer understanding of ad performance).

-Different ads impact different segments of the purchase funnel (e.g. banner ads typically have more impact on the earlier stage of the purchase funnel, whereas blogs impact later on, at the time of transaction and after.)

Tim Reynolds is Meredith Local Media’s director of interactive media and a speaker at Digital Strategies for Broadcasting 2010. He recently shared his tips for growing station web revenues based on his experiences in trying to do so since 1996.

He recommends:

1. Use of large, eye catching display ads. Don’t be afraid to go big!

2. Video display advertising. This allows clients to use on-air ads on the web site.

3. Pre-roll video run before news clips or live feeds with a call to action.

4. Content sponsorships offering fixed position ads on the web site’s high traffic pages, particularly in combination with an on-air package.

5. Put enough weight into the web inventory, it may take 100,000 impressions or more to get the job done for the client.

6. Contesting builds databases and valuable leads for clients.
Mobile banner ads linking to a splash page are engaging. Location based services are technically feasible and just starting to enter ad inventories.

7. Leveraging the power of the mobile device offers great new powers of audience engagement.

To learn more about Tim’s ideas and what Meredith is up to, be sure to attend his session at DSB 2010, “New Ad Revenues for New Times: Monetize Digital Fast!”

While the choice of whether to drop Internet or TV may not be a likely choice faced by many people, it is not entirely theoretical. As we discussed in an earlier post dealing with the growing OTT trend; more households, especially those run by younger heads, are opting to forego video subscription services and rely soley on Over-The-Top (OTT) streaming video over their broadband connections.

Local television broadcasters have an interesting opportunity now to capitalize on this trend toward picking Internet over TV. For most Americans, that may actually come to a choice of managing their expenses and lifestyles between spending on broadband connectivity versus other choices. Broadband is essential and consumers are organizing their lives and value sets around this fundamental reality.

What local television broadcasters can do is start promoting OTA+OTT as the hottest new package on the street. Some younger consumers are honestly amazed that you can get free, wireless, HDTV service from local broadcasters. And coming soon, broadcasters will be adding mobile TV back into their offerings (analog TV could be received on mobile platforms, e.g., Sony’s Watchman, but not so for the first version of the digital TV standard selected in the U.S.).

We see all those cable and satellite commercials. Wouldn’t it be smart for local broadcasters and their networks who increasingly rely on OTT services like YouTube, Hulu and TV.com to reach audiences to start their own promotional campaign on the OTA+OTT value proposition? Networks like CBS and ABC are promoting their shows on the new iPad. How cool would it be to start branding the OTA+OTT experience as as consistent part of these deals. This would help tie networks and their affiliates in a tighter and sustainable relationship long into the future.

OTA+OTT could be this year’s killer app for local television. By binding the notion of what local television is in the minds of consumers to both OTA and OTT platforms, the stronger their bond with the Internet, the better it is for broadcasters. It becomes OTA+OTA versus “those pay services.” Working with innovative firms like Sezmi, broadcasters can even be part of a new type of pay television service to augment advertising revenue with recurring subscription revenue. Sezmi’s CEO, Buno Pati, will be discussing this more at our Digital Strategies for Broadcasting 2010 conference next May 17-19 in Jersey City.

According to new research released by the Pew Internet and American Life Project, news is personal, portable and participatory:

• Portable : 33% of cell phone owners now access news on their cell phones.
• Personalized : 28% of Internet users have customized their home page to include news from sources and on topics that particularly interest them.
• Participatory : 37% of Internet users have contributed to the creation of news, commented about it, or disseminated it via postings on social media sites like Facebook or Twitter.

About 92% of Americans get their news from more than one platform; 46% use 4-6 platforms. The most popular news platforms are:

• 78% – local TV station
• 73% – national network such as CBS or cable TV station such as CNN or FoxNews
• 61% – online
• 54% radio
• 50% local newspaper
• 17% national newspaper such as the New York Times or USA Today

This study provides a lot of granularity to how local television and radio audiences are not only getting their news but how they are interacting with it. Users are much more active in personalizing their own experiences with the news and in sharing this with others. Seeing how the broadcast audience extends its experience across platforms in an integrated and active fashion argues for more multiplatform advertising campaigns by local businesses if they really want to make an impact. Local broadcast sales managers would be well served to take a look at this report and see what they can apply to their own sales initiatives.

Consumers are continuing their evolutionary ways for integrating traditional and digital media into their lifestyles. Increasingly, consumers are forming different kinds of relationships with their media and developing a continuum of experience across platforms. Content consumed on broadcast platforms now morphs into consumption of that same and other content on desktop, mobile and player devices.

As audience change their relationships with and uses of media, marketers also are changing their behaviors by leveraging cross-platform synergies to create end-to-end consumer experiences and maximize revenues.

According to McKinsey, while traditional marketers spend about 60% of the budgets on paid media placements, active digital marketers spend about half that amount. Digital marketers also spend about 50% of their budgets on content compared to only 20% for traditional marketers.

Advertisers tend to concentrate their media and marketing budgets on up front brand marketing and promotions at the point of sale. Incremental revenue can be increased by 10%-20% by creating a continuity of consumer experience across the purchase funnel from (1) Capturing traffic; (2) Engagement; (3) Qualify leads; and (4) Conversion and loyalty.

As shown in the chart below, McKenzie summaries the experience of three of their clients who made efforts to coordinate customer experience to drive customer loyalty and sales conversions. (Note: the full article is available free upon registration at www.mckinseyquarterly.com).

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According to an article in today’s New York Times, the goal is both to bring web functionality such as Youtube videos, Google search, Twitter social networking and using Picasa for managing photos. Presumably, “Google TV” would be a Chrome-like browser experience for the user.

Of course, Google has been trying to find a foothold in the television business by managing and selling local advertising inventory. While this has not made much of an impact to date, the company certainly has the resources to keep at it. By establishing a presence in the living room, Google can create its own television ad inventory to sell as viewers launch some version of a browser to interact with this latest box.

Generally, this move by Google and its partners continues the evolution of television’s newest distribution platform, Over The Top (OTT) video. OTT is now competing with cable, satellite and telco distribution as television viewers can access on-demand and linear video using Internet connections to watch network and local television programming as well as movies, Youtube video and other services.

For local broadcasters, this creates interesting opportunities. Local television operators have focused on retransmission and multicast carriage deals with cable, satellite and telco distribution. That’s been a successful source of new and high margin revenue. OTT video creates a new business paradigm and potential new revenue outcomes for broadcasters. Imagine being able to have your own apps in the Google Android app store which can be used to build audience for your OTA programming, drive new web traffic to your sites and add to the overall user experience with your brand by leveraging creative viewer enhancements to extend the viewing experience.

Will we soon see local TV promo spots pushing a new “OTA Plus OTT” solution? Local TV stations can create a consistent user experience by leveraging their over the air signal into TV sets and with the new DTV Mobile standard, mobile phones. Adding to the OTA capability, the enhanced functionality of OTT and this could be a winning combination breathing new life into local TV’s cross-platform growth prospects. Generic Propecia India
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