Android TV: Google brings its ad business to the big screen

For so long now we have been trained to not expect much from our TV’s on-screen guide, writes dunnhumby’s Nishat Mehta – can the launch of Google’s Android TV change all that?

For Google, a company focused on organising the world’s information, the largest screen in the living room represents a massive opportunity.

Google can target this space because of today’s limited on-screen guide interfaces, in addition to a growing separation between linear and over-the-top TV programming.

Android TV, a platform that will be available in a few set-top boxes later this year and built into a handful of new TV models in 2015, attempts to address these issues.

The company’s demonstration of the technology showed a card-based interface divided into three areas – Recommendations, Apps and Games.

– Recommendations will use Android TV history (what was previously watched and searched for) to suggest additional content from any source. In the future, this engine could leverage everything Google knows about viewers, including actors they have searched for on a mobile device, movie trailers they viewed on YouTube, or the confirmation email they received from Fandango for film tickets.

– The Apps area enables the Google TV platform to expand. Early apps will include Netflix, Hulu and ways to watch live TV. Access to the Google Play store means anything you can do on your Android phone or tablet can be shared with the entire family on the biggest screen in your home.

– Finally, Games enables Google to break into the lucrative gaming console market overnight simply by organising apps already available through other Android platforms. This was an obvious choice for Google and we can expect Apple to announce something similar later this year.

Additionally, Android TV includes voice search and Google Cast to stream content from any other device in the home, a capability similar to Apple’s AirPlay and that Google’s TV dongle, Chromecast, already performs.

Android TV provides numerous opportunities for Google. Firstly, Google has now released a software platform for every screen – with Google services such as search, YouTube, Gmail, and Chrome on a PC/laptop; Android on mobile devices and tablets; Android TV and its intent to go after the Internet of Things and all connected devices in the home.

Google has also pursued a hardware solution in each of these areas, although far less successfully, including Google Chromebooks, Nexus and Motorola phones and tablets; Google TV and Nest devices. While Google’s hardware choices have disappointed, Google learned its lesson after the Apple iPhone launch in 2007 and is diversifying its business to ensure that it stays in front of any threat to its domination of search and digital advertising.

Secondly, on-screen guides have not yet successfully been used as advertising platforms. Android TV, which can deliver more relevant recommendations to consumers due to what Google knows about viewers, could enable a new business model that helps content owners get the right content to consumers.

Finally, consumers are beginning to understand that if they received a service for free, they are the product, not the customer. Apple clearly makes money from its devices and, therefore, can afford not to advertise on most of its platforms (iAds are intended to incentivise developers and iTunes Radio is a small business based on minimal data enabled for targeting).

Google, however, by offering mostly free services, must monetise its platforms through advertising and recommendations. Customers are already beginning to react to the perception that Google knows too much about them and it’s likely the privacy debate will heat up over the next few years.

Google will need to be more transparent with its customers about what it does with their data in order to gain their trust, as it is now playing on the most important screen in the home.

As much as Google appears to diversify, all of its activity supports its advertising business. The release of Android TV is both a response to a potential risk of losing opportunities in the living room, as well as a massive opportunity to learn more about its customers that can be used to deliver greater relevance.

We have been trained to not expect much from our TV’s on-screen guide for so long. That is about to change.

Nishat Mehta is executive vice president, global partnerships at dunnhumby.