Animas Weblog

I was just typing an email (in GMail) to a family member about driving through Albuquerque, NM on the way to Colorado for Thanksgiving. I found the following AdWords ad alongside my email content:

Albuquerque New Mexico
Breathtaking satellite images of
Albuquerque on Windows Live Local
local.live.com

Curious, I followed the link to this Windows Live Local page showing satellite photos.  Very interesting indeed.  I would like to know who made editorial decisions as to which were the most picturesque coordinates to use for each location being advertised, and the how many locations Live Local is targeting through paid ads in this manner.

All three of the major search engines have products that overlap in one way or another with where TV is going. Of the three, Google has announced most explicitly its plans to offer an advertising platform for TV, starting with web-delivered ads and content targeted to the user by monitoring the user’s TV viewing selections. With Microsoft piloting its ContentAds counterpart to Google AdSense, I think Microsoft also has the ingredients to offer a pretty competitive ad platform for TV, although they haven’t said so explicitly yet.

When I refer to an ad platform for TV, I’m not talking about the current generation of TV, or the narrowly defined IPTV which preserves the broadcast nature of our current TV. I’m talking about a new kind of narrow-cast, non-linear, personalized TV that unites small audiences (individuals) with the specific programming they want. There are immense technological barriers to this happening (ISPs, bandwidth constraints, infrastructure for managing the economy of value exchanged by this kind of TV), and a lot of inertia from advertisers, cable/broadcast network operators, media producers who want to protect the status quo. But even so, I think that’s where we’re headed.

The ingredients for building a Microsoft TV ad platform are the following… Growing penetration into home entertainment via devices in the homes: Windows Media Center Edition HTPC’s, Media Center Extenders (via XBox products and 3rd party extenders), the Media Center capability that will be built into Windows Vista. And not least of which, devices developed through Microsoft TV technology partners and distributed through Microsoft TV cable and broadband customers. The Microsoft TV platform itself could be deployed with minimal interactivity so that the continuity of the business model of a cable operator, for example, is maintained across the deployment. However, the more interactivity is possible through the platform, and the more platform customers are willing to adopt this more personalized and interactive TV paradigm, the more opportunity there would be for some other Microsoft technologies to be used for ad targeting.

Demographically targeted contextual ads could be offered as a plugin to the MS TV platform for the cable/broadband operators who really want to go after interactive models. The 360 has a great writeup on the granularity of demographic targeting that is possible through MSN AdCenter and the Lab. From that post:

The AdCenter Lab is also working on new methods for data mining to improve search ads, contextual advertising, behavioral targeting and emerging media.

This sounds like exactly what would be needed for ad targeting based on TV viewing patterns. Imagine the power of exposing this kind of demographic control to marketers who can reach viewers with high impact targeted TV ads.

Google and Microsoft could both potentially gain from the fragmentation of the TV ad market, if the paradigm shifts toward a more personalized interactive model. Small technology companies might have a chance to get into this vacuum and provide innovative ways for advertisers to reach viewers in the chaos of content. But Microsoft also has a very strong play if they can drive adoption of their IPTV platform, first as as a mere technological substitute for a broadcast-oriented customers, and then by offering value added services to customers that move toward a more interactive format to win and retain subscribers. If Microsoft could broker ad placement across large cable operators’ programming just as AdSense and YPN do across pages on the web, advertisers could place their ads directly with Microsoft rather than through the cable operators. Microsoft’s IPTV may be the fox in the hen house.

These two posts from Battelle (advertising is content) and Godin (what happens to radio) intersect with a tangent from this post of mine about Google competing for the TV ad market. I refer to the fact that “IPTV will come along at some point and scramble every paradigm about TV programming, advertising, consumption, control, and everything else”. I still maintain the bit about the scrambling, but as I’ve read some good sources about this over the past couple weeks, I’ve realized that part of that statement may be wrong, technically. Take the following from a clarification by Shelly Palmer about the precise definition of IPTV:

IPTV is not television over the Internet. It is television over Internet protocol. It is an alternative method of distribution — a transport mechanism, nothing more. The systems are not open to the public anymore than a cable set-top box from Comcast is open to the public. IPTV systems are walled gardens that will be used by operators to achieve optimum bandwidth efficiencies while enabling them (either cable or telcos) to provide television-like services, on-demand content, broadband connections, and voice over Internet protocol (VoIP telephone service) over a private, inherently interactive, two-way network. Neither Verizon, Comcast, or any other serious IPTV provider will use the public Internet to deliver their services.

IPTV refers to using IP technology to distribute broadcast programming, with the added benefit of two-way communication to support more interactive entertainment, according to Palmer. Numerous comments differ with this definition, so I suppose there are different working definitions of “IPTV” and it’s not possible to use the term without dragging one connotation or another into the discussion. IP protocol as a means of distributing broadcast content is not what I was referring to, so I’ll stay clear of the IPTV term. I was referring to the departure from a strictly broadcast distribution system for TV programming (and advertising). Palmer also says the following:

Are we likely to see a public television product that mimics the current television experience utilizing the public Internet? We might, but it’s highly doubtful. Television provides a pretty good television experience and for broadcast business models, it is extremely efficient…. IPTV is not a threat to television, nor is it a threat to any existing advertising models.

Palmer’s assumption is that linear broadcast television as a business model and media consumption model is safe and sound. Perhaps IPTV itself, given a narrow enough definition, isn’t a threat to broadcast television. Irrespective of the technology used for distribution, I think consumers will drive a change in the linear and broadcast nature of TV. Let me start with some thoughts about the viewer demand for the long tail of content. These are a few excerpts strung together from an outstanding Bob Cringely post in 2005:

There is an audience, however small, for just about every show ever made. What we need to do is to find a way to make the cost of keeping those shows available less than the benefit derived from people seeing them…The broadcast distribution network isn’t efficient for small audiences…[but,] the Internet could be an ideal medium for serving small audiences…We need a way of rewarding the content creators when someone enjoys their work.

Broadcast might work for news, first run programming, and any kind of media that is likely to be consumed by a large percentage of viewers at the same time: this is the head. The Cringely quotation above is a perfect description of increasing the granularity of both content and viewership in order to match up the long tail of both. In the tail, more viewers can see exactly what they want to see (more obscure choices of content), and more obscure content (re-runs, specialty shows) can be viewed by satisfied viewers rather than going to waste. Best of all–and most interesting to me–in the long tail of viewers and programming, the targeting of TV ads can be increased dramatically because marketers don’t have to paint with broad strokes as they do in a broadcast context. Advertising in the tail of TV media will be extremely fragmented vs. the status quo, but marketers who have embraced the tail in other media will be able to increase their efficiency in the TV medium as well.

This is precisely the kind of environment that I believe Google is targeting for their TV ad platform. Google will want to leverage their track record as a trusted ad distributor in other fragmented ad markets. Google will attempt to lock up as much TV ad distribution as possible so that it can provide great reach for marketers weaned from broadcast media buys and unable to cope with the fragmentation of the new TV ad market.

One big unknown is how advertising will be incorporated into TV content as TV becomes less linear as a part of becoming narrow-cast. I want to talk more about that later, but in light of Battelle’s statement (I agree) that advertising is content, what of Google’s recent claim that they’re not in the content business? If ads are content, and Google is in the business of serving ads, and Google is working on more video ads, then isn’t Google in the business of serving video content? over IP.

Next up, technological barriers to long tail TV content, how user-generated video and YouTube/Google Video fit in, and some activity around technologies that might power P2P video distribution to start making some of this a reality.

I have wondered how a service like Digg could stay true, in practice, to the democratic ideal that made it catch on. I just read this post prognosticating the Downfall of Digg, and I guess the answer is that it does not. I don’t follow it that much, but it seems inevitable that a service with incredible reach of Digg and a strong commercial incentive to manipulate the “democratic process” would be prone to manipulation. Similar to a dimension of search, Digg is becoming a marketplace for attention.

I would have assumed that opportunists would have made Digg bots with all the sophistication of the best PPC fraud clickbots. When I first dugg a few articles, I understood that wrapping a captcha challenge around digging helped prevent that, despite many smart folks working on breaking visual captchas. In fact, the manipulation is occurring through the same sorts of processes that happen in real human politics and social evolution. This is really just SEO lifted into a more explicitly democratic Web 2.0 environment where diggs, rather than links, determine how merit gets modeled.