If Google wants to grow, it has to tap TV advertising budgets -- hence the original-content push underway now on YouTube. But it also wants to apply its self-serve auction-based ad model to TV advertising itself, which is why it has been pushing Google TV Ads for the past five years.
Today, Google TV added another chunk of TV ad inventory from Cox Media, the ad division of Cox Communications, the third-largest cable TV operator in the U.S. with 6 million subscribers. Cable and satellite providers typically get to sell a certain number of ads themselves as part of their deals to distribute TV networks like CNN or MTV , so this theoretically gives Google some pretty good TV ad inventory, albeit restricted to Cox's cable markets, which include Las Vegas, Phoenix, San Diego and New Orleans.
Google has had a tough slog getting inventory for Google TV, mostly because TV networks don't trust Google and certainly don't believe Google can do a better job of getting high ad rates for content. In October 2010, Google and NBC Universal dissolved a pact letting Google sell advertising inventory on certain NBC Universal cable channels almost a year early.
Google has a long history of attempting to break traditional media, with failed efforts to sell radio, newspaper and magazine ads. But TV is different for two reasons. First, the spending is huge, because that 's where most brand dollars go. And second, TV itself is going digital. It's not too hard to see TV being sold using the same platforms and technologies as web video.
Google says its new deal gives it national reach of just over 40 million households in the U.S., about the size of a fledgling national cable TV network. After five years of effort, that number won't impress anyone, but it's significant given the hurdles Google has had to overcome. Think of it: Google powering the back end of TV advertising. For the networks, it's a terrifying thought. But as viewers and networks fragment and multiply, and technology finally comes to TV advertising, it seems almost inevitable. One thing we know: Google's going to keep trying.