Google TV Ads, launched two years ago, created an online market space for television advertisers. With recent new partnerships and features, Google has conquered an even bigger market space, now reaching 95 million U.S. households.  

The system is auction based, built on the basis of Adwords. By logging in, a user can select from a hundred different networks in which to advertise, set budget ranges and pricing according to different inventory items, and target audiences and channels.

A user can specify “only programs for men over fifty who are interested in motorcycles and have a dog." All the programs are indexed for such categories, and the user can then execute a campaign, all in one, end to end, using the system," Michael Steib, head of Google TV Ads said in an exclusive interview with AlwaysOn.

One customer, Oakland-based Golden Gateway Financial is in the reverse-mortgage and life- settlements business. The target audience is senior citizens, seventy-five or older, who watch a lot of television. The company has been using the product since May 2008. Now Google TV Ads is a main driver of their business and a substantial proportion of their marketing expenditure.

The company also uses the television ads to explain how to use the services offered on their website. This represents a big step for a company that didn’t use television advertising before and is now running four to six campaigns per month.

“As a small company with a limited marketing department, I thought it would be too hard to use television advertising. But Google TV allows you to quickly, efficiently plan and execute national television campaigns,” CMO Bob Purcell said.

He explained to AlwaysOn how the company uses Google TV Ads: “You set your campaign up. Then there is an auction for your campaign, for the next day, during the evening. You get an e-mail early next morning, saying you’ve won these bids, and your ad is scheduled to air at those times.”

Golden Gateway Financial is an example of a new type of advertiser that Google take credit for introducing to the television market, making television commercials affordable, especially in financial crisis when budgets for such campaigns are getting tighter.

Bob Purcell compares the simplicity of working with Google TV Ads with his own experience in television advertising. “I’d been working for Dunkin’ Donuts, where we spent $48 million in national television. I had a staff of eight, just buying national TV, and three different media-buying agencies. Now you can set up a television campaign, with only two people.

Use of the system is free, but Google takes a share when a successfully transaction is made.

“Advertisers indicate how much it will be worth for them to run an ad. The owner of the inventory says how much it will be worth for them to put the ad in their system. If that transaction isn't successful, Goggle doesn't get paid,” Michael Steib said.

Google TV Ads has grasped several converging opportunities since its launch. Such as uploading the commercials on YouTube as well, or Google Analytics. And advertisers can see how much website traffic is driven by the TV Ads.

Most important, the audience has grown. Google is not only using data from set-top boxes connected to partner Dish Network (which itself offers 100 different networks) but also closed deals with new partners, both in the inventory-systems business, such as Bloomberg and CNBC, and in traffic and billing systems, such as with VCI Solutions.

Now the system reaches roughly 95 millions households in the U.S., compared with the previous thirteen million.

Reach is also part of the criticism against the system. Another is cost.

“It is a little bit more expensive on a CPM (Cost per Thousand) basis. So it is a little bit expensive and offers somewhat limited reach. They need to get more cable systems and more inventories. "As they add inventory, I hope the CPM will come down," Bob Purcell said, unwilling to disclose how big a proportion of the marketing budget the company is putting into Google TV Ads.

Google’s revenues from the system are not disclosed. Neither is the information of how many of its employees are engaged in development. But Michael Steib states that the company is happy with its progress, hopefully brighter than the company’s previous measurement tools for radio and print.

 “There was a fundamental problem with the products for both radio and print. Those were one-way media and with any one-way medium we can’t report back to the advertiser the effects, how well those ads work,” Michael Steib said, underlining the feedback Google TV Ads provides.

But there are examples of successful companies, developing measurement tools for radio online?

“Yes, we think that the radio online market is interesting, with a valuable future. We also indicated that in our blog post when we announced that we were getting out of the terrestrial radio business.”

Time will tell whether or not Google will try again to conquer the radio business, developing measurement tools for online radio as well.

“But I am a TV and video guy and I am pretty excited and focused about the $70 billion TV market here in the U.S.,“ Michael Steib said.