Google's new initiative: Google TV ad platform

Google has launched an advertising platform that aims to copy the success of its AdWords pay-per-click online advertising programme in the world of digitally encoded TV.

The search giant has signed an agreement with satellite TV provider EchoStar, which operates the DISH Network, and cable provider Astound Cable to host a new TV ad programme.

In a process similar process to AdWords, advertisers will bid against each other to determine the price of available slots based on demographics, time of day and TV channel.

Advertising charges are based on the number of people that viewed the commercial, and advertisers will be provided with a detailed audience report through data collected from set-top boxes.

Google claimed that the programme will open up the TV market to small advertisers just as AdWords did for online ads.

AdWords is credited with popularising the pay-per-click advertising market. In addition to introducing an auction model to set prices for popular keywords, Google pioneered the text advertising model.

The latter allows firms to ensure that marketing messages show up only with specific keywords.

Google also offers companies control over their advertising outlay by allowing them to set advertising budgets. No more ads will be displayed after a daily budget is exhausted.

AdWords motivates advertisers to use relevant keywords by ranking ads based on the number of clicks from users. The ad with the most clicks receives the top spot, while the one with the least clicks is ranked at the bottom.

Google is already trying to apply its AdWords model to radio advertising. The search provider acquired dMarc Broadcasting for $1.2bn in cash last year, and has undertaken small-scale experiments in print advertising.