Google, Fiber and the Local TV Advertising Threat

By Stewart Schley

“In advertising, they’re going to have to start slow, because of the laws of physics,” said Dan Dodson, a fellow with the media industry firm IBB Consulting Group who helped Comcast develop its local digital-ad insertion infrastructure in 2004. Dodson says that even if Google can quickly rack up several thousand paying subscribers in Kansas City, “I’m not really clear on how they could have a big, vibrant, zoned local advertising presence.”

This circumstance – low penetration and hand-to-hand combat for every connected customer – is a huge departure from life on the Internet, where Google (and other content/advertising providers) have access to everyone, with entry barriers almost non-existent. Riding OPP: Other People’s Pipes, is a very different business model than being limited in access to households that are physical connected, or can be reached via cooperation agreements with neighboring operators – cable’s “interconnect” advertising model.

This is not meant to be critical of Google per se. The company’s footprint and record in revolutionizing advertising by tightly aligning messages with prospects is indisputable. It’s simply to say that the rules of the game are very different in television, and particularly in local television, where ownership and operation of a delivery facility – a TV station or a cable/broadband network – is usually a requisite for getting commercials messages distributed to TV sets.

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