Google has missed on TV again and again. Is now the time?

Breaking down how the search giant could finally crack TV ads in a meaningful way

About a year ago, I asked the question “has Google given up on TV?”

Now I wondering - is this the perfect time for Google to make a TV comeback?

Why now? Well, a few stories caught my eye recently that have led me to shift my thinking, and wonder if something big is brewing. First, in this terrific deep dive by The Information’s Sarah Krouse on Google’s ad business, among the areas cited where Google is intending to ramp up its efforts is in selling CTV ads. (Caveat – if you want to sell more TV ads, you need TV ads to sell. I’ll come back to that later).

Next, during a recent investor event, Roku’s CEO Anthony Wood predicted that the number of companies vying to own the TV operating system (and by default, a nice chunk of the streaming TV ad business) - won’t last.

Meaning that one or more of them capitulate, make a deal, or get taken out. Which doesn’t sound crazy to me - even as the CTV ad market remains hot, do TV manufactures all have the stomach and will to be in the ads business over the long haul? It’s at least a fair question.

Ok, so let’s think through why that matters to Google is in TV, and where things could go:

·      YouTube -even though it’s roots are on desktop and mobile, is increasingly a major CTV player, even if it it still doesn’t get enough credit from marketers for commanding a ‘living room’ audience. There seems to be plenty of upside there.  

·      The subscription-based YouTube TV has carved out a decent niche as a cable replacement for cord cutters. But price hikes and fights with networks appear to have limited its growth. Like any cable provider, Google controls two minutes per hour of linear TV ad space. But to the best of my knowledge, YouTube hasn’t done anything all that innovative or creative on that front. But they could.

·      Google of course, owns Chromecast, which is a solid if unspectacular device. But unlike Amazon Fire or Roku sticks, people that use Chromecasts don’t navigate their TVs using a Google-centric interface. And because of that, Google doesn’t control a chunk of CTV app ad like Roku or Amazon do.

·      Google’s software is baked into a growing number of TVs, as Innovid’s Tal Chalozin recently pointed out. This is where Google’s stealth play may lie. I’m just not sure how that gets them more ad inventory- unless Google TV owners are somehow forced to start using Google Play or another interface to access TV apps.

·      Google’s ad serving tech is used by a number of big TV companies. That product – a competitor to Comcast’s FreeWheel, has a good reputation in the industry, yet for every big win (Disney) there seems to be a big loss (Paramount+).  I’ve always theorized that Google having a direct, vital ad-serving relationship with big TV companies would lead Google to get its hands on more ad inventory to sell or handle. That hasn’t proven true.

Therefore, restating the obvious, if Google really wants to make noise in TV, it either needs control of ad space, or to become an essential targeting or measurement layer for TV ad. buying in general. (BTW, you could make a very sound argument that Google will be just fine if it never cracks the $70 billion TV ad business and it can just focus on self driving cars or web 3 or whatever. The flip side of that is that Google, with its targeting data and automation tools, could turn a $70 billion ad market into $200 million – theoretically of course)

So what do they do?

-Revamp Chromecast to make it work more like Amazon Fire or Roku? (You could argue the world is moving away from TV sticks).

-Strike a bunch of deals with the Tubis and Plutos of the world to handle their ad serving ad and sales? The problem there is that these platforms are owned by big media companies who are cleaning up in CTV ads right now. So why help Google?

-Make a Google TV set that completely nails search across the insanely fragmented TV ecosystem.

-Make Android software distribution in TVs contingent upon getting some ad inventory to sell.

-Dramatically drop the price of YouTube TV to drive up subscriptions. Google would lose a lot of money, but ratchet up its inventory supply.

-Buy Roku. The argument against this has always been Roku’s price. Now it’s way down. However, Roku has its own ad tech, which Google may not love. Oh and regulators may not love such a deal either.

-Buy Vizio or LG. You’d get an instant large footprint, an OS that you can flip, and ad space since these manufacturers all have their own free ad-supported channels. Then again, you’d also inherit a problem. Brands don’t necessarily want to advertise to just consumers who buy one kind of TV.

-Build an arbitrage business that is better than what’s out there (like an awesome Google TV SSP.  Would the industry want that?)

-Build a better metrics platform to compete with Nielsen and all the new guys (seems too late)

-Get in through gaming somehow?

It’s fun to speculate, but again, you can start to wonder, is this all worth it? Can Google afford to just let TV go? It’s only 70 bill…

But, as mentioned, Google’s prowess lies in its ability to make markets grow exponentially. The company is awash in first party data and ad targeting tech that could be applied across the web and TV, theoretically.

Plus, do they really want Amazon to have this space to itself, especially if and when TV-commerce takes off?

I don’t know the answers – but I do feel like Google hasn’t given up yet.

What am I missing?