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– Hey, mom, what channel is GOOGLE on today? – Hey, mom, I am bored, can you turn on the radio? |
Information right from the source
Google CEO Eric Schmidt on "How big is the market for all these Google ads":
Today, the vast majority of our revenue is in text ads correlated with searches. In the last couple of years, we have developed what are called display ad products, including banner ads, video ads, click-to-call ads, and things like that. And I’ve also said that we are pursuing the possibility of television advertising. By that I mean traditional television advertising. And we bought dMarc Broadcasting to do radio ads.
So let’s rank the probability of them being affected by targeted ads. There’s search: That’s 100 percent affected. What about radio? Is it possible to get a targeted ad right to your car right now? Not yet because we can’t target the individual receiver in your car. If two cars are next to each other, the same radio station cannot have two different ads. However, if it’s at a regional level we can do it to the zip code level. So let’s call that partial targeting.
Now, let’s look at television. Every one of the next generation of cable set-top boxes is going to get upgraded to an IP-addressable set-top box. So all of a sudden, that set-top box is a computer that we can talk to. We can’t tell whether it’s the daughter or the son or the husband or the wife in a household. All we know is we’re just talking to the television. But that’s pretty targetable because family buying patterns are pretty predictable, and you can see what programs they’re watching. And if you’re watching a YouTube video, we know you’re watching that video.
My point of going through this little treatise is to say, if the total available market is ($600 billion to $800 billion, we won’t be able to target all $800 billion. It will not be a 100 percent perfectly targetable, straight into your brain, but we should be able to offer a material improvement (in response rates) to many businesses.