The Real Reason Google is Shutting Down TV Ads

Google Ads

This is a guest post from Bill Wise, CEO of ad tech company Mediaocean.

With Google sunsetting its TV Ads program, it’s worth asking what really made Google pull out of that line of work—so we can get real answers on who, if anyone, might be best positioned to take up the mantle of using technology to finally monetise unsold TV inventory.

Surprisingly little has been written about what was really going on behind the scenes of Google TV Ads; but I’ve managed to pull together the conversations my teams and I have had with industry insiders over the years, and I’ve to come to two basic conclusions.

Essentially, Google TV Ads didn’t last because of two issues: 1) Workflow and 2) Mistrust.

I’ll start with workflow.

Despite Google’s well-deserved reputation as a leader in usable tech, Google TV Ads just weren’t designed with a TV buyer’s day-to-day operations in mind. Most buyers spend the bulk of their workday within a media buying software, which they use to execute and record the hundreds to thousands of technical details they handle regularly, from viewing inventory RFP’s, to responding to invoices, to contract negotiation. (Disclosure: Mediaocean is the largest media workflow systems provider.)

I’ve seen many otherwise stellar products fail because they couldn’t sync with these workflow systems. If a product doesn’t live within a buyer’s workflow tools, there’s a huge burden involved in leaving the native workflow software to engage with the external product, only to return to the workflow system again and manually record the transactions in workflow recordkeeping tabs.  It’s a process that’s both highly frustrating—which media buyers don’t appreciate—and woefully inefficient, which agency C-levels don’t want. The net result is that everyone in the media agency avoids the product, and the product dies of neglect.

That’s a large part of what happened with Google TV Ads. To use the product, marketers needed to operate through a Google ad management system that’s part of the DoubleClick / AdWords universe—but that they couldn’t use through agencies’ native workflow systems. It was a huge hurdle that kept media agencies away.

Without the support of the major agencies from the start, Google needed to achieve scale by bringing the long tail of new TV advertisers into the fold, with the goal of eventually moving up-market to attract the bigger media players as well. And while that strategy worked very well for Google in search and display, TV is different: TV’s huge production costs create huge barriers to entry, even with programs to help marketers build TV creative on the cheap. Google faced an uphill battle on bringing new advertisers on board, even while the largest TV spenders stayed away. That’s hardly a recipe for success.

That’s the workflow side of the picture. Now for the mistrust.

At its core, Google’s TV ad play was simple: buy inventory that existing networks couldn’t monetise, make it financially viable with the help of technology-driven algorithms, and sell it at a higher rate. And using technology as a means to buy low, sell high, sounds like a straightforward path as any to a successful business.

But it’s hard to escape the fact that Google is the perennial frienemy that, between YouTube, Google TV, and Google fibre, seems dead set on encroaching on the major TV business models. It doesn’t take much imagination to view Google TV Ads as one step down the road of taking significant media share from the networks’ core business (even if it isn’t entirely clear how to connect the dots along the way). Plus, many network executives’ had the uncomfortable feeling that Google was running off with profits that the networks rightfully owned, if only the networks could have cracked the code on best monetizing their hardest-to-sell inventory. Add it all together, and you realise that a huge store of mistrust existed between Google and its actual and potential TV Ads partners—which is a large part of why major networks shied away from the program.

To be fair to Google, my understanding is that Google TV Ads was a great product that managed to gain significant amounts of spend. But ultimately, it didn’t gain enough participation to make the product worthwhile for Google to keep afloat. Media buyers didn’t want to deal with a company that couldn’t fit in its workflow. Networks didn’t want to cede power to a perceived threat. Between the two, Google TV Ads was doomed to fail.

The silver lining for Google comes from its decision, coupled with shuttering TV Ads,  to “double down” on its own digital video initiatives—like YouTube and AdWords for Video. That’s a smart move. If Google can’t make it in traditional TV, its one chance for real leadership in video will come from drawing audiences off of TV sets, and on to YouTube channels. If you can’t join ’em, beat ’em.

There’s a silver lining for the rest of the industry, too. Both buyers and sellers know that there’s real potential in unsold TV inventory, and that data-driven technology is the way to unlock its value. And so it’s inevitable that a business will come along to seize the opportunity. But that will have to be a business that understands the buy side, the sell side, and the workflow that connects them.

I’m excited to see what company that will be. But for now, Google isn’t that company.

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