In a recent press release by Google, the company announced that they will be expanding their advertising ideas to television.  The article can be found at Google’s Press Center:

http://www.google.com/intl/en/press/annc/tv_ads_trial.html

By using a similar model of their online advertising, the television ad spots will be auctioned off and advertisers will only pay for how many people viewed the ad.  Google claims that they will utilize “set-top-box technology” to keep track of how many times an ad was viewed and how long it was watched for.  Additionally, advertisers will be able to target specific demographics, time slots, and channels.  According to Scientific American, Google has already made a deal with Dish Network and is currently talking with DirecTV:

http://www.sciam.com/article.cfm?alias=google-talking-to-directv

This new method of advertising will benefit advertising companies, television networks, Google, and even the consumer.  The statistical feedback that Google will provide on each commercial will be invaluable to advertisers.  Companies will receive information about the effectiveness of their ad, the channels on which the ad was most effective, and the target market to which they are advertising.  Television networks will also benefit because they will be able to generate more profit by charging more money for more effective ads.  Additionally, Google will receive a cut of the ad revenues for providing the hardware and software to keep the statistics of an ad.  Ultimately, the consumers will benefit the most because more entertaining ads, specifically directed towards their interests will be aired.  Over time, companies will stop wasting money on ineffective ads and will spend more money on designing create ads that captivate a large audience.  Also, if the new ads become more effective and more expensive, companies will purchase less ad time and there will be fewer commercials.

However, there are certain problems with their model.  Google’s biggest obstacle will be estimating how many impressions that a certain commercial has made.  An ad that is aired during a commercial break could make a wide range of impressions.  There is no way to tell if the TV is on with nobody watching it, or if ten people are watching a particular commercial.  One solution would be to have the consumer press a button each time he or she watched a commercial before the show returns.  Additionally, the new advertising model brings up many privacy issues.  Google stated that relevant ads will be only based on “demographic, daypart, and channel”, but once Google starts tracking which commercials that you watched, they are collecting information about your personal interests.  Eventually, Google could sell this information to companies, so advertisers can air different commercials specifically directed towards millions of different viewers. 

Although there several problems with Google’s new advertising approach, overall, it has the potential to start a new advertising revolution.