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I noted Tuesday that analysts are touting digital billboards as an increasingly important part of the advertising market. When I’ve asked Google (GOOG) executives about their interest in digital signage in recent conversations, they’ve been coy, declining to speculate on future products.

But a filing with the U.S. patent office dated Dec. 21, 2006, shows Google’s been thinking about the subject. The patent for “allocating advertising space in a network of displays” describes what sounds like a version of Google’s AdWords advertising system meant to slot ads for digital billboards:

Systems and methods for allocating space for advertisements in a network of electronic display devices are provided. Attribute information indicating retailer and categories of products available for purchase in the vicinity of a display device is maintained for each device in a database. Advertisers may upload advertisement messages to a server specifying information such as budget, price per impression, preferred billboards and/or other constraints. One or more keywords or other descriptors are specified for each advertisement message. The system then generates an advertising campaign specifying where the advertisement message is to be output and send the messages to the specified displays. The output may consist of various forms including video, audio, printed incentive, interactive data transfers and/or combinations of these.

Boy, that’s got to be a chilling phrase for every ad exec and “creative” type out there: “The system then generates an advertising campaign.” We don’t need you anymore, boys and girls.

Thanks to NewScientist magazine for pointing this one out, and my colleague Ed Lin.

The patent application is #20060287913.

Source: Going Digital: Google Revolutionizes Billboard Ads