Google's Three Screen Ad Strategy Heralds Its Second Act - Jonathan Bokor - MediaBizBloggers

Many pundits have criticized Google as a one-trick pony that makes money from one thing – search on the desktop. There's certainly some truth to that, but Google's moves over the last few years foreshadow an audacious three screen advertising strategy that, if properly executed, would represent a ground-breaking second act for the company. By aggressively pursuing platforms on mobile and TV in addition to their traditional perch on the desktop, Google is positioning itself to deliver ads across all three screens and trump the capabilities of both Apple and Microsoft, who have made far less inspiring moves in the advertising world.

Mobile. On the mobile side, Google's development of Android as a mobile OS has been impressive both from a product standpoint and from partnership perspective. The latest devices from HTC and Motorola have won favorable reviews from both ultra picky tech bloggers and mainstream users, resulting in phone activations at the rate of over 160,000 a month. According to the most recent numbers, Android is the only mobile OS that is actually growing its market share. Although I haven't spent much time using Android handsets, I suspect they will favor Google search and garner most of the search traffic on those handsets, and when you add in all of the usage of their search apps on other handsets, Google seems set to duplicate its search dominance in mobile. Add in the capabilities they acquired with the (seemingly pricey) acquisition of AdMob, and their prior integration of DoubleClick, and they are well positioned to build a large scale mobile display ad platform as well. Sure, Apple has a pretty impressive combination with iPhone and Quattro Wireless, and they may even exceed Google's results in mobile, but Android/AdMob still looks like a serious player. Microsoft's efforts with Windows Mobile and Atlas have allowed it to grab some market share, but it looks like an also-ran in mobile. So while Apple looks like a very powerful ad player in mobile, Google will be a strong competitor and has a chance to be the long term leader.

Television. The television side of the business is more complex, and more of a mixed bag for Google. While Google TV Ads embodies some very good technology and has actually been able to aggregate some meaningful cable inventory, it's hard to avoid the conclusion that it has stagnated for a while now. Google seems to have fallen into the same rut as its competitors, relying too much on a technological approach and failing to bow to the realities of the TV ad business. For a variety of reasons, TV ad sellers simply do not want a pure auction model for the bulk of their inventory, and Google's stubborn insistence on retaining it is a mistake. Similarly, agency buyers, particularly those buying on behalf of the largest spending advertisers, reasonably insist on receiving volume discounts, and Google has not sufficiently addressed this point. Nevertheless, the upcoming launch of Google TV raises some interesting possibilities, particularly the prospect of a meaningful search platform for TV. It remains to be seen whether search will be a commonly used function on TV, but if it is, GoogleTV could end up being a blockbuster. AppleTV on the other hand, one of Apple's rare duds as a product, isn't an ad platform at all and gives Apple no hand to play in TV advertising. As for Microsoft, it is astounding how much time and money the company has poured into television (remember the $5 billion investment in Comcast?) with very little to show for it. Sure Xbox has done well as a game platform and it streams Netflix content, but it doesn't look like a strong ad platform. So although Google has a ways to go with TV, its prospects look far better than those of Apple or Microsoft.

Desktop. Need I even address this one? Google's combination of search and display capabilities is unmatched. It's acquisition of DoubleClick was a smart strategic move that instantly made it a player in display, and the price looks reasonable to boot. While Microsoft is a meaningful competitor with Bing and Atlas, it remains a distant second and despite some early gains with the launch of Bing, it seems unlikely to make up much ground for the foreseeable future. Apple isn't really a player in this segment, thus crippling any chance of it being a real player in a 3-screen advertising world.

Conclusion. By solidifying its position in mobile advertising with the success of Android and the acquisition of AdMob, Google now has 2 out of the 3 screens well covered. If it can successfully launch GoogleTV and combine it with GoogleTV Ads into a meaningful TV ad platform, it will be in a unique and enviable position. The key remaining task will be unifying the three platforms into a coherent whole that will allow agencies to easily buy, traffic and measure campaigns across all 3 screens in an integrated fashion. If it can do so, and that's a big if, Google will be in a position to dominate the advertising business in an unprecedented way.

Jonathan Bokor is a consultant specializing in monetization strategies and business development for both digital media and traditional media companies. Jonathan can be reached at jbokor@yahoo.com.

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