Mountain View, California — The Internet search titan Google Inc. is testing a new service called “Google TV Ads Online,” an interface technology designed to expand its TV-ad brokering business to YouTube and eventually to videos on other Web sites, as it struggles to lure bigger advertisers to both services, The Wall Street Journal reported on Friday.
The newly conceived program will display advertising into the commercial breaks of online videos, Google spokesman Aaron Zamost said in a statement. “This is a part of our ongoing commitment to help Google TV advertisers connect with users across multiple video platforms, including YouTube,” he said.
Michael Steib, Google’s director of television ads, said in an interview with the WSJ that the company is working on technology that enables advertisers to purchase ads across Google TV, which sells on-air commercials; YouTube; and eventually websites running video using the same interface.
He continued stating that Google is currently testing the service, called Google TV Ads Online, with a limited group of advertisers. The newspaper quoted people familiar with the matter say the service — which would leverage Google TV’s targeting technology — is likely to be introduced in the coming months.
For the new program to work effectively, YouTube needs to obtain longer-form video such as TV shows and movies, for which users are often willing to tolerate longer ads. While it is in discussion with major media companies, YouTube to date has only signed a small number of full-length content deals with companies such as CBS Corp.
But the concept is also part of Google’s wider vision of tying together various platforms to make it easier for advertisers to manage and measure their spending across traditional and online media, says Shishir Mehrotra, YouTube’s director of product management for advertising. Google earlier this year postponed its efforts to broker ads across print and radio, but the company says it is confident that TV and video will be different.
Now whether Google TV advertisers — many of whom are just testing out the service — will take advantage of the online video integration remains a distant guesswork. Some TV ads may not be suited to run before or alongside online video. Steib said Google is working to determine the best formats.
There are big strategic battles at stake. As more consumers watch TV online, Google and other Internet companies see fresh opportunity to wrest business from traditional TV-ad sellers such as stations and cable companies.
Google’s move is aimed at developing a one-stop platform for TV and video advertising comes at a time when consumers are increasingly using the Internet to view television shows and full-feature films. Where consumers go, advertisers tend to follow.
Google is seeking to generate more income from advertisers and to capitalize on YouTube’s millions of viewers. Google paid $1.65bn in 2006 for YouTube.
News of the development came as the search engine said it was to axe around 200 sales and marketing jobs — its largest round of cuts yet. In a blog posting, Google said it had hired too many employees doing the same jobs during its rapid expansion.
“Making changes of this kind is never easy — and we recognize that the recession makes the timing even more difficult for the Googlers concerned,” wrote Omid Kordestani, the company’s senior vice president of global sales and business development.
However, at the same time Google is cutting costs in attempt to protect its profit margins and prevent its slumping stock price from falling even further. The shares have fallen 40pc since May last year, down from $594.9 to $353.29 last night.
The company is largely anticipating that the new service will make it easier for bigger brand advertisers to spend across both services, which are under pressure to ramp up their business despite the sour economy.