The new Google (GOOG) deal with Echostar (DISH) to sell advertising on the satellite network and measure audience viewing patterns may seem insignificant at first. The head of the Digitas advertising agency told The Wall Street Journal: "I don’t think anybody is thinking this is going to change large national broadcast."
The deal is small until it gets big, and advertising agencies, which could see a slow bleeding out of their broadcasting ad buying business, are right to play the Google initiative down in public. But, Echostar does have 13 million subscribers.
The status quo folks in the TV ad business want Wall St. to belief that TV networks will set prices for their advertising and that it will be brokered through advertising agencies to large national marketers. It has always been that way.
But, what it Google’s system works? What if it can target advertising for TV that way it does on the internet? What if large national marketers come to see the Google system as more efficient as a marketplace to buy their ads?
Google has been slow out of the box selling radio and newspaper advertising. But, the way its starts may not be the way it finishes. Buying ads through advertising agencies has a cost. The middle man takes a lot of money. The TV networks ultimately don’t care how they get their money, as long as they get it. And, the more efficient the system, the more the national marketers like it.
If the results of the Google hook-up with Echostar are promising, Katie bar the door.
Douglas A. McIntyre
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