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Google Fiber and Programmatic TV: Round Two

June 7th, 2017   ||    by Todd Wasserman

Programmatic TV may still represent a small portion of the market, but it’s growing at a pace that has—once again—caught Google’s attention. In April 2017, Google announced technology that will let advertisers buy TV inventory through DoubleClick Bid Manager.

The program, in test, marks the technology company’s second attempt to sell TV time. The first was a Google AdWords-like program that sold space via set-top boxes. Now Google is selling inventory directly from Google Fiber and through partnerships.

The fact that Google has previously tried—and failed at—programmatic TV means its current entry doesn’t cause the industry trepidation it might otherwise have inspired. But this is still Google we’re talking about! So, is it possible Google will finally add TV to its stable of profitable ad businesses? Perhaps—but there are some hurdles to achieving that vision.

Google Fiber’s Frustration

Google Fiber, which started in 2010, is a fiber-to-the-premises service that offers broadband Internet access and IPTV. However, at the time of this writing, it is only available in nine metro areas, with three more under construction or planned.

Fiber has been the victim of cost-cutting at Google, with the unit reducing staff and scaling back its expansion plans, according to Fortune. “Now the industry is debating whether Google’s fiber effort is just paused temporarily or perhaps on its last legs,” Fortune explains, noting that there were rumors last year that Google planned to spin off fiber entirely.

Industry watchers say Google has been frustrated by the high costs of laying cables across neighborhoods and the bureaucratic red tape that must be navigated. Google also raised its monthly fees in the Kansas City market by $20 in May, according to The Kansas City Star. This brings prices to $120 or $140 per month, depending on the package. Google blamed the increase on higher programmatic costs. Fiber’s small footprint also puts it at a disadvantage when negotiating with studios for content, The Kansas City Star notes.

A Cautionary Outlook

Google’s first foray into programmatic ran from 2008 to 2012. In a 2012 Business Insider column, Bill Wise, CEO at Mediaocean, blamed Google’s failure on its inability to integrate with TV buyers’ workflows—and on those TV buyers’ mistrust of Google. Google’s lack of workflow software integration made placing buys a painstaking process, which was a major reason TV buyers turned away. Mistrust, meanwhile, was heightened over fear that Google would come in and take major portions of business away.

It’s likely that Google has learned from its mistakes last time around and now figures it has a decent chance at breaking through. In its favor, the programmatic market has picked up considerably since 2012. And, as programmatic TV seems poised for growth, even a small slice of the overall market is worth pursuing.

Unlike search, where Google controls nearly 81 percent of the market, according to StatCounter, Google’s relatively small TV footprint is likely to keep its growth on the margins. That said, Google is a worthy competitor in any market, and—even at this stage—should not be written off just yet.

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