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How Google Plans to Control TV Advertising and Crush Agencies

Authors: Jay Baer Jay Baer
Posted Under: Digital Marketing
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AdWeek ran an interesting story a few days ago about Google’s foray into television advertising. As I’ve been saying for years, Google’s ultimate plan is to be the middle-man for all advertising, everywhere.

There are clearly inefficiencies in the buying and selling of traditional media. It requires multiple phone calls and emails and spread sheets. Why? Because sellers of media will not make their inventory and their pricing transparent, believing (perhaps correctly) that to do so will result in lower prices.

The Internet Puts People Out of Business

Let’s see if there are other industries that were based in large measure on a slow, inefficient buying process with a lack of transparency. How about travel agents, financial agents, and insurance agents?

The Web does a lot of things well, but its long-term legacies will be instant knowledge and the creation of efficient markets in either broad (amazon, ebay) or targeted (expedia, eTrade, Geico) categories.

Google Has Chosen Advertising as Its Market

To me, the agency community seems frighteningly slow to realize that Google is looking to take away all agency services that are not strategic and creative, and replace them with Google-owned software. Google Ad Planner. Google Analytics. Google Web Optimizer. And now Google Radio, Print, and TV ad insertions. ALL of these are services that agencies could charge for as recently as 30 days ago in some cases.

TV is the Final Frontier for Google

pixelThere are 2 components to Google’s TV strategy that if successful, will put a ton of broadcast media reps (buyers and sellers) on the street.

First, Google wants to deliver their menagerie of hundreds of thousands of advertisers directly to TV networks – and especially local stations. Imagine if your local CBS affiliate only needed 1 salesperson instead of 7 because most ads were bought direct through a Google interface. That’s the plan.

Second, Google wants to deliver precise, real-time results tracking for television. They want to do away with Nielsen and all forms of panel and meter measurement. Already, Google is serving ads in the EchoStar satellite network, and providing second by second data on which ads are watched, skipped, paused, etc. They then combine data from online marketing and print and radio campaigns to provide advertisers with a comprehensive report on which media tactics and which creative executions are driving sales.

Are there any clients out there that might want to know precisely how their TV fares versus their radio and print? Ummm, yes.

Old Media is Denying Their Own Peril

What’s equally amazing and aggravating in the AdWeek article are the quotes from all manner of old guard TV folks and their hand maidens. They point to the newish effort by cable companies to join forces to provide the type of online marketplace and measurability for TV that Google is offering. The problem is, it doesn’t matter how great Project Canoe is (which is literally what it is code named – so much for futuristic nomenclature) – they have a grand total of zero advertisers on board. Whereas, Google has hundreds of thousands of marketers logging into their system every day.

Ultimately, efficient markets will win. It’s as inexorable as water flowing to a point of least resistance. Even Forrester is ignoring the eventuality of Google getting a major foothold in the traditional media buying space, as analyst David Graves was quoted “It seems that the television establishment, both buyers and sellers, are likely to want to buy it person to person.” Not for long, and when Google opens up the billions of dollars in spot TV revenue pent up in the mouse clicks of their PPC user base, watch how fast those “face to face” advocates start learning how to buy and sell remotely.

Other posts about Google and its plan to squeeze out agencies>>

5 Great Workshops to Train Agencies on Digital Marketing>>

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