Google’s Tricky TV Audition

[Commentary] Google Fiber said it would test a system to deliver local ads to Kansas City subscribers. These would be transmitted digitally and targeted using real-time information on location, viewing history or the type of program being watched. US TV advertising was $63.1 billion in 2014, of which local ads were $20.5 billion, Pivotal Research estimates. That is a prospect worth considering when you are Google’s size. But the Internet giant would face big challenges to breaking in.

The ability to show ads only to a certain segment of the market isn’t new. When it comes to making money on their slice of local ad inventory, pay-TV providers already target based on location. They also use data from advertisers and third-party suppliers on income, interests and purchasing to determine which households should see a given ad. And this isn’t the first time Google has tried to be a middleman for TV ads. But the inability to get wary pay-TV providers to give up enough ad inventory may have played a role in that initiative’s failure.

With Fiber, Google gets its own TV inventory. And while the Kansas City test only uses the targeting factors listed in its announcement, they might evolve over time. Unlike cable firms, whose terms of service reflect strict privacy laws that govern them, Google’s broad online privacy policy also applies to Fiber. All subscribers are required to have a Google account, and all information collected about the use of Fiber, including use of programs and applications, can be tied to that Google account. That may point to Google’s ultimate goal: to get enough of a sample to show advertisers and holders of ad inventory that it can maximize the value of TV ads by targeting individuals not just there but across all platforms and the Web.