The battle for the conventional advertising segment
Google CEO Larry Page met with senior representatives of the US National Football League (NFL) at the end of August. On the agenda was the upcoming end of the NFL’s contract with DirectTV in 2014. DirectTV paid one million dollars for the broadcasting rights to games, shown on its Sunday Ticket pay-per-view slot, a figure perfectly within the budget of companies like Apple or Google, perfectly within the budget of companies like Google or Apple, who now see purchasing broadcasting rights as a way to spread the word about their own plans for a television platform, perhaps the last great advertising frontier.
This past weekend I watched two soccer games on television, one after the other. The signal for both came via the web, and the picture quality for both games was perfectly acceptable, with no interruptions, despite being in the countryside. Even up to a few years ago, this would not have been possible. But since then we have seen a notable increase in broadband availability, matched by televisions able to connect to the internet, along with content providers that have decided to explore this market, and in my case, to offer me it as an option.
However, the advertising shown during the half-time break was totally conventional. What might Google be able to do with this content and advertising space if it applied the personalization and selection technologies it has been developing for many years on the internet? What might this advertising market be worth if we were to drag it out of pre-history— i.e. broadcasting the same advertisement for all viewers and presented it unidirectionally—and instead place it in the 21st century? How much would advertisers be prepared to pay for a higher level of quality and for a wider range of possibilities to reach potential consumers?
What impact might suppliers have on talks with organizations like the NFL that are able to think and act globally, rather than being restricted to a single country? The talks between Google and the NFL might have been limited to a product like Sunday Ticket, which is relatively restricted to around two million clients, of whom around one third are local advertisements for bars and restaurants… or they could have been about establishing a much wider reach.
The ongoing roll out of fiber optic cable to a growing number of homes, along with developments like Chromecast— a simple device that is selling well, and one that at 35 dollars a pop is within anybody’s reach—means that for Google a deal with the NFL would allow it to make serious inroads into the television advertising market, while raising many questions about the opportunities in the different European leagues.
The web now garners more advertising revenue than any other segment after television. Can you imagine the impact that the mythical advertisements shown during the Super Bowl would have if they were managed by Google? Are we about to see the first serious attempt to take over conventional advertising?
