Google, TiVo Deal on Data Sharing
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Google (NASDAQ: GOOG) began experimenting with TV advertising in 2007. Google TV Ads was greeted with considerable fanfare, but the project has languished on the sidelines of the company's balance sheet, which receives about 97 percent of its revenue from Internet advertising.
On entering the TV space, Google's guiding principle was the same that governs much of the search giant's activities: that better data and audience insight leads to better decisions and bigger revenues.
So with the TiVo (NASDAQ: TIVO) deal, Google has scored licensing rights to the real-time viewing data collected and stored in set-top boxes, which it plans to integrate into its auction platform for selling television ads.
"Google TV Ads is focused on enabling advertisers to target and measure television advertising more effectively," Mike Steib, Google's director of emerging platforms, said in a statement.
Steib noted that all of the information about what shows people are watching is anonymous. The accumulated bits are merely fodder for Google's dataset, which is parsed for insights that will help inform the decisions that advertisers make.
Google is hardly the only player casting hungry eyes toward the troves of data that pass through set-top boxes.
A ambitious joint venture comprised of the nation's largest cable companies, dubbed Canoe Ventures, is working to tap into that same repository of data and pair it with existing sources of information, such as subscriber demographics, to form the cornerstone of a new and highly targeted form of television advertising.
In both cases, the idea is to make a static advertising process dynamic through new technology that can parse the vast stores of information about consumer preferences. Ideally, only households with dogs would be shown commercials advertising dog food.
Google claims its TV Ads program reaches up to 96 million households, and has served more than 1 billion ad impressions since its 2007 launch.
For TiVo, the Google tie-up is the latest in a series of partnerships as the firm looks beyond its subscription business for new revenue models, many of which involve advertising, such as its recent partnership with Amazon (NASDAQ: AMZN) and its ongoing trials with cable companies.
Industry observers have noted the mild irony of TiVo as an ad play, given that the company burst on the scene in 1997 with a revolutionary technology whose principal selling point involved the ability to skip past commercials.