LOS ANGELES -- Google wants to take the ad-targeting capability that powers Internet ads and marry it with the "emotion" provided by television advertising, said Vincent Dureau, the search company's head of TV technology.
"Television is a unique medium. It creates emotion," Dureau said, whereas the Internet is much more adept at matching ads to people who would be most receptive to them.
"If we can combine the addressability of direct advertising with the accountability of the Internet, with the emotion of television -- that's when we see television ad spend growing again," he said.
Dureau, former chief technology officer of interactive TV software firm OpenTV, spoke on a panel, "Advanced Advertising Technology: Driving the Next Growth Engine," here Tuesday at the Society of Cable Telecommunications Engineers' Conference on Emerging Technologies.
Dureau said analyzing viewing patterns of cable TV ads can help advertisers create more effective spots. He noted that Google's analysis of set-top box clicks shows that a certain portion of viewers, somewhere under 20%, decides whether to click away from a channel 5 to 10 seconds into a 2-minute ad block.
"There's a segment of the population that will decide to stay on a channel -- or not -- based on the ad," he said. "We're zeroing in on the population who decides to tune away, to find out how to keep that audience."
Google's TV advertising business unit currently has two trials underway to auction ad avails on Dish Network and small cable operator Astound Broadband in Northern California.
But of course, the opportunity to exploit interactive and targeted TV ads is not Google's alone to reap.
"I suspect, in the end, there will be continued collaboration with Google... but there will also be a whole lot of innovation in the cable industry itself," said John Morrow, vice president of strategy and business development for Scientific Atlanta. "There are smart people in the cable industry that would like to create the same value that Google has created in the Internet space."
Morrow showed an analysis of a hypothetical cable operator, in which an increase in ad revenue from $400 million to $800 million per year translated into a doubling of its market capitalization, from $11.5 billion to $22.8 billion.
"Advertising is a very profitable business, so all those incremental revenues would essentially fall to the bottom line," he said. "This is not 2020, this is 2008. This is the opportunity the cable industry has today."
Arthur Orduña, senior vice president of policy and product for Advance/Newhouse Communications, who moderated the panel, said interactive and addressable advertising is "not a maybe -- it's a 'have to have it.'"
He said Advance/Newhouse systems are, for example, already selling interactive overlay ads to let viewers request more information from a sponsor. "It is, and can and will be, an extremely effective element to sell for our media sales folks."
However, Orduña added, "It's double-edged, because it can confirm that no one cares about a particular advertiser."
And panelists noted that standardized means of buying and delivering advanced TV advertising have yet to become reality, in spite of the progress on new specifications such as SCTE's DVS 629, which is designed to provide interoperable, multivendor advanced video advertising solutions.
Adam Tom, executive vice president of business development for RGB Networks, said advertisers need a common ad type that can be played across all cable systems -- akin to the 30-second spot.
In the absence of such commonality, Dureau said, Google had to do a lot of ad-hoc work with companies like C-COR to get its cable-advertising system to work.
He said that what's needed is "a common standard for ease of deployment, and a distributed architecture for scalability," adding: "That sounds like the Internet."
As always when it comes to ads that are delivered based on an individual customer activity, panelists said, privacy is of utmost importance. "You can't use personally identifiable information [about a subscriber] unless you think you look good in an orange jumpsuit," Orduña said.
SA's Morrow said even just based on ZIP+4 information, "it's incredible what marketers know about a particular household."
"At the end of the day, in all likelihood, people are going to receive advertisements that are much more relevant to them," he said.
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