With all the buzz about Google acquiring Motorola Mobility, a lot has focused on the patents Google acquires and also on the set-top boxes. What could be of key import is the set-top box. Certainly, the patents have both short and long-term value, but their value is already known. Depending on how Google moves forward with that entry into the boxes, there could be a game-changing advertising feature with tremendous upside that I don’t believe most people are even thinking about.
Many pundits have talked about how the set-top box element makes up for their disappointing GoogleTV rollout. Having heard a bit about what GoogleTV was planning to do, I don’t even think they had a grasp on the upside value of their product. Much of what they were focusing on was content delivery and perhaps subscription-based revenue for that content. What could be the biggest development is the possibility to optimize on-air spends in the same way online spends have. Honestly, I think the market would ultimately head in the direction I discuss below without Google. I just see it as being one step closer now.
First of all, let’s take an extremely over-simplified look at the ad-sales revenue model for commercial-supported television. For Broadcast channels, the network sells a certain amount of inventory and leaves inventory for the local affiliates to be able to sell. For the non-Broadcast cable networks, there is really no affiliate equivalent, so inventory is released to the cable distributors (in some cases, inventory from the broadcasters is made available to the carriers.) So far, it has been a one size fits all system for markets – national, regional and local – where the same ads are seen by everyone in the market regardless of personal tastes or demos.
Imagine if technology were able to ensure that every home would only see specifically relevant commercials in those slots that are not centrally booked. What if the set-top box knew enough about the viewer (from billing and historical viewing patterns) that it could effectively select the most relevant spot from a pod of available spots. So, instead of serving up the “I’ve Fallen and I Can’t Get Up” spot to younger viewers during an off-peak show, it could dynamically pull and serve up an ad for an energy drink. There are obvious privacy concerns, so there would have to be careful communication and simple options to opt out.
The ability to layer information on top of content is also a possibility as the boxes get smarter. As we use Google search now – where we have to type in terms for findings to be spit back at us – this would be able to present contextual responses based on shows we are watching in real-time.
Not only does Google have the technological brains to pull this off effectively, they already have the sales infrastructure in place – based solely on how they sell ads now – to make it work on the needed scale. Sure, the immediate reduction of viewer-base and the complexities that would come along with the planning might bother those who simply want quantity of reach without concern for quality impressions. But the actual returns on those lower targeted numbers would more than make up for it as the buys would be more cost-effective.
Yes, Yes, Yes. I know this is probably not at the top of their list and that I might be oversimplifying things. And, there might be other things we need to be worried about – like Google running the world. But there’s some absolute benefit that is not too far in the future.
Ultimately, it will take a lot of work and tweaking on the technology, sales and distribution side, but the possibilities could be game-changing – especially in a quickly-evolving world of time-shifted viewing and lessening relationship between viewers and commercials.