Google is already the certified king of online advertising, and Chromecast serves to expand on that dominance. With 95 percent of total revenue stemming from advertising (around $50 billion total), it is not surprising that Google's newest product serves to expand their lucrative ad revenue strategy.
While Chromecast may at first seem like a device targeted specifically for consumers, the truth is that advertisers will benefit just as much if not more from the innovative dongle. At $35 per device, it is unlikely that Google will be aiming to profit from hardware sales alone. In addition to providing consumers an innovative means of interacting with the content on their multiple devices, Google Chromecast serves as a new variable for valuable marketing data.
Bridging the gap for the second screen
With 89 million mobile shoppers and 88 percent of U.S. consumers using smartphones and tablets while viewing television, Chromecast is a well-timed release from the search engine giant. As digital marketing and mobile application development becomes a necessity for businesses competing in today's market, Chromecast serves as a way to unite the second screen with an updated TV experience. Advertisers already have taken aim at the second screen as seen by Verizon's app for "The X Factor" reality show, as well as Redbull's collaboration with Shazam for the Redbull Signature Series snowboarding event. There are also some media startups like SnagFilms, which at first served independent films through a website but now have mobile streaming apps that generate increased ad revenue.
Thanks to this linkage, a more pervasive perspective of customer viewing data is now accessible thanks to Chromecast. With the connection between the user's mobile device or computer and their video consumption habits, a new context for targeting ads has surfaced. Jackie Danielson, a marketing professional at Century Interactive, sees a definite opportunity for advertising, given that, "Chromecast provides a path for Google to gather extensive data about what people are streaming, and when, to sell video advertising to advertisers."
This device and the data stemming from its usage by consumers will allow for more precise targeting and more accurate timing of ads. A deeper view of consumer data can benefit campaigns leading to increased business for the brand and a drive in advertising revenue for Google. Given that Google already owns 24 percent of the market share for display ads according to IDC, the company can offer expanded ad models and options for targeting, but at a higher price. In addition, the move by Google serves to solidify the importance of reaching multi-device users in a more precise and contextual fashion.
Google attending to media consumption trends
Marketers have struggled with reaching digital omnivores on multiple devices and channels for several years, and Chromecast may offer a way to better attend to that challenge. The new device is not Google's first foray into television and video. There was the ill-received Nexus Q and the unsuccessful Google TV set. But who could forget Google's crucial (and successful) acquisition of YouTube in 2006? If anything, YouTube was the preliminary success that paved the way for the eventual production of Chromecast. The device is seen by some as a way to revitalize interest in YouTube, especially in light of the site's win of a technical Emmy for its "video recommendation algorithm." With Google's primary success in video being the acquisition of YouTube, the Chromecast can be seen as a way for the company to further extend into the wider media market.
Not only can the new device serve as a new component for the company's existing advertising model, it can potentially lead to valuable new partnerships. Google can potentially certify itself as the leader in TV 2.0 through collaboration with additional streaming video services, media producers, and existing cable networks to host and deliver content through Chromecast.
The post-TV era
According to a report from eMarketer, time spent on digital will exceed time spent viewing TV in the U.S. for the first time ever. On average, U.S. adults spent a little more than five hours per day on digital and four and a half hours watching TV in 2013. The findings are further solidified by Facebook's announcement to sell 15 second video spots in their news feed, starting at $1 million to $2.5 million per slot. What were once prices only associated with the Super Bowl, social media and mobile have propelled digital to the forefront of marketing strategies across the globe.
With the billions of dollars spent on digital marketing each year, data have been valuable resources for assuring the accuracy of targeting and identification of specific consumers. Now that Google has introduced Chromecast as an intermediary between video consumption and multi-device usage, the data generated will assist advertisers in targeting the ever evolving multi-screen consumer.
Prasant Varghese is a technical analyst at Icreon Tech.
On Twitter? Follow iMedia Connection at @iMediaTweet.