Google Folding Its Google TV Ads Effort

Faced with a tough market, Google is giving up on selling Google TV Ads out of a separate unit and will merge the efforts into existing Google businesses.

Google is pulling the cord on its Google TV Ads business, just five years after launching it in 2007 to sell advertisements on traditional television networks for its customers.

The shuttering of Google TV Ads was announced in a post on the unit's blog by Shishir Mehrotra, vice president of YouTube and video at Google. "In 2007, we launched Google TV Ads in AdWords to bring digital buying and measurement technologies to traditional TV advertising," wrote Mehrotra. "Since then, lots of our clients have bought traditional TV advertising for the first time."
Now, though, the market is continuing to change as users are watching across multiple devices, and Google's efforts will follow those changes, he wrote. "So we've made the hard decision to close our TV Ads product over the next few months and move the team to other areas at Google."

That will mean more offerings for customers through Google units such as YouTube, AdWords for Video, and ad serving tools for web video publishers, wrote Mehrotra. "We also see opportunities to help users access Web content on their TV screens, through products like Google TV."

The idea for Google TV Ads was to give the search giant more ways to sell ads, away from its online search-based ad sales. Customers were supposed to be able to advertise their businesses on national cable television with help from Google. Customers were to get the ability to build ad campaigns that would air nationally across more than 100 cable networks. The Google TV Ads system promised to deliver at least 1.5 billion ad impressions weekly, according to Google's sales pitch.

Google TV Ads worked through Google's AdWords interface to make it easy to use for customers.

So why is Google dropping the stand-alone product now?

"Clearly, this is one of their efforts that wasn't working well," said Rob Enderle, principal analyst with The Enderle Group. "So reorganizing it into another group makes sense."

The television marketplace is proving to be a tough one for Google in general, especially in comparison with its incredible success in the digital world of the Internet and online search, said Enderle. The fate of the Google TV Ads business has been similar to that of Google's other attempt to break into the television market with its Google TV content services.

Google TV, the company's ambitious effort to wed Web surfing with channel surfing by putting its Chrome Web browser on TV sets and making all TV broadcast and Web content searchable, launched in October 2010 and has not had the huge success the company hoped to establish. Google TV is an Android-based service that lets users surf Websites and TV channels and access Web applications. The first version of the platform launched on Logitech Revue companion boxes and Sony Internet TVs and Blu-ray players.

"I already have my doubts on whether Google will be able to pull off their efforts with Google TV in general," he said. "And it's not just Google. Moving against the traditional television companies has proven daunting, even for Apple and its television efforts."

What surprises Dan Olds, principal analyst with Gabriel Consulting Group, is that Google recently made related moves to sell the home set-top box division from its Motorola Mobility unit, which Google acquired in May for $12.5 billion.

Now with the shuttering of Google TV Ads, it could be another sign that Google believes that the future of television is not through cable companies and traditional service delivery but through a move to total IP address delivery. "At least that's how Google is betting now," said Olds.

"I've always thought that the set-top box business was a jewel," said Olds. "With Motorola's set-top box unit, that gave Google instant communications with the traditional television companies. With that Google would have been in a good position with those providers and with their relationships with the digital content providers."

That could have helped Google with its overall strategy in the television market, said Olds. "The blood enemy of the cable providers is the Internet, where users can get same services online for $50 to $60 a month instead of for $150 a month from cable providers. Google was in a really interesting position to be able to play that to their advantage, but it looks as if they are punting on it."

In January, Google TV, which has been having a tough time selling itself in the consumer marketplace, underwent what was seen as a "revival" with new partnerships with hardware vendors that were to help boost the Google TV platform. LG, Sony, Vizio and Marvell showed off products running the Web television platform.

The new partnerships came after Logitech killed its Revue business last fall after suffering heavy financial losses trying to sell that system for $300 a pop.