Google Fiber gets more attention for its broadband aspirations than its television service, but that doesn't mean the company is ignoring the TV opportunity.
Google Fiber Inc. announced on a product forum that it will begin testing targeted advertising with subscribers in Kansas City, KS and Kansas City, MO in the coming weeks. (Hat tip, Engadget.) Ads will run during live and recorded programming, and will be matched up with viewers based on geography, program type and/or viewing history. Subscribers can opt out of having Google track their usage patterns through the settings menu, and, as with Google's ad business on the web, advertisers only have to pay for ads that actually air.
The move comes as Google Fiber, which has made its name on the broadband end, is struggling to boost its video customer base. The provider ended 2014 with about 30,000 TV subscribers across its initial markets, including about 27,000 in the Kansas City metro area, according to the latest data dug up by Wall Street analyst firm MoffettNathanson. In the Kansas City area, Google Fiber competes against such incumbent pay-TV providers as Time Warner Cable Inc. (NYSE: TWC) and AT&T Inc. (NYSE: T).
The cable industry has been chasing the promise of targeted advertising for decades. However, while pay-TV providers are finally making progress -- particularly with digital ad insertion for video-on-demand programming -- there is still a lot of work to be done. (See Canoe Floats Its 10 Billionth Ad.)
As cable slowly makes the transition to IP video delivery, operators will find it much easier to line up relevant ads with individual TV viewers. Addressable advertising is a potential goldmine because it allows companies to pay only for audiences that would consider buying their products. (See Comcast Spins Wheel for FreeWheel.)
However, Google isn't sitting still on the TV front, and by the time cable companies migrate to IP, they may find that the web giant has already claimed valuable ad territory on multiple screens.
Google said in its Fiber TV announcement that the current targeted advertising test is just a small trial. The company will look for feedback from both advertisers and viewers in the coming weeks.
— Mari Silbey, special to Light Reading