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Google Seals Local Cable TV Advertising Deal with NBC - Are Dealers Ready To Rumble?

Google is expanding its advertising clout and moves further to TV advertising as it reached a deal with NBC Universal. Said agreement will provide a small amount of advertising time on NBC Network Cable programs including MSNBC, CNBC, Sci Fi and Oxygen for Google to serve its TV Ads program. The said deal would also be extended to other NBC Universal properties later on. In addition, Google and NBC have also agreed to make the Google TV Ads platform tailored-fit for the local markets covered by NBC Cable.

Certainly this deal would expand Google’s TV Ads inventory which have never really grown since it started offering TV ads to clients not so long ago. Prior to this deal Google serves ads on Dish Network and a small cable provider based somewhere in Northern Carolina.

But of course, Google’s venture into TV advertising which is strengthened by this deal is not without strong competition. The TV advertising campaign is going up against top cable providers Comcast, Time Warner Cable and Cox which are formulating their own TV ad platform known as the Canoe Ventures.

Now, whether Google can go up against Canoe Ventures depends on how well it can target its TV ads to the appropriate geographic audience.

“The only way that Google is going to take any share on TV is if they can take advantage of data to provide targeted advertising that is not available today,” said Ross Sandler, an analyst with RBC Capital Markets, in a statement with the NYT.

And to do this Google would certainly need whatever data that it can get from Dish Cable Network and use this for their ad targeting campaigns. But the problem is, Dish only has 12% of the household market in the U.S.

Certainly, it’s going to be a tough road ahead for Google to realize the full potential of its TV Ads Platform. And this deal with NBC is certainly a one step forward towards the end of the road.

Posted on September 9th, 2008 by Arnold Zafra



September 9, 2008
Google Strikes Partnership With NBC to Expand in TV Advertising
By MIGUEL HELFT and BRIAN STELTER

SAN FRANCISCO — Google will begin selling ads on some cable networks owned by NBC Universal in a new partnership that will expand Google’s efforts to become a force in television advertising, the companies said late Monday.

Under the agreement, NBC Universal will make a relatively small amount of advertising time on networks like MSNBC, CNBC, Sci Fi and Oxygen available for sale through Google’s TV Ads program in the coming months, the companies said. The partnership could later be extended to other NBC Universal properties.

The companies have also agreed to work together to tailor the Google TV Ads platform for local markets and to collaborate on research and development of new technology.

The deal suggests that large media companies, which have regarded Google with suspicion, may now be more willing to work with it.

Google first entered the TV advertising business 17 months ago, promising to help advertisers aim TV spots at specific audiences and to better measure their impact. The company also promised to attract many small marketers who were comfortable advertising online but had not experimented with TV ads.

But Google’s efforts have met with only moderate success. In particular, the company has struggled to gain access to advertising time, known as inventory.

Google is selling a small amount of advertising time on Dish Network, a satellite TV provider with a national reach, as well as on a small cable provider in Northern California.

The deal with NBC will help the company broaden its reach.

“NBC Universal is a big win for us in terms of distribution growth,” said Michael Steib, director of Google TV Ads.

Google will have access to a small slice of the advertising inventory that brings in almost $6 billion a year for NBC Universal. Advertisers will be able to buy time on Sci Fi, which reaches 1.4 million viewers in prime time, as well as lower-rated cable channels.

The amount of inventory to be made available to Google is “fairly small by NBC Universal standards,” said Ed Swindler, executive vice president and chief operating officer for advertising sales at NBC Universal.

Most of the advertising time on NBC’s cable channels was sold during an unusually strong upfront sales period last spring. Some of the remaining time — which the industry calls scatter advertising — will be made available to Google.

Mr. Swindler said the amount of inventory may be adjusted “to make sure this test is successful.” He said the deal was significant regardless of scope.

“Any deal that allows us to change the model in favor of the advertiser to drive return on investment is a great deal,” he said.

As it seeks to expand its reach into television, Google will face increasing competition. This year, the nation’s largest cable providers, including Comcast, Time Warner Cable and Cox, teamed up to develop their own system to place targeted ads on television. The effort is called Canoe Ventures.

Analysts said that while the partnership with NBC Universal represents a victory for Google, to effectively direct its ads the company needs to gain access to data from television set-top boxes. That data is collected and controlled by cable and satellite television providers.

“The only way that Google is going to take any share on TV is if they can take advantage of data to provide targeted advertising that is not available today,” said Ross Sandler, an analyst with RBC Capital Markets. “You need to work with an intermediary like a cable or satellite provider to target the data.”

Mr. Steib said Google would use data it collected through its partnership with Dish and project it onto the larger audience of the cable networks.

Mr. Sandler said this was a good first step, but added that Dish had access to only 12 percent of households in the United States, far less than Canoe Ventures.

NBC intends to work with Google to adapt the advertising platform for the 10 local television stations it owns. National advertising time on NBC will not be included initially.

Miguel Helft reported from San Francisco, and Brian Stelter from New York.

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Tags: Advertising, Digital Advertising, Google, Local Cable TV, NBC, car dealers, marketing

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