Google has been experimenting with the sale of TV ads for some time, brokering ad time on EchoStar Communications Corp.'s Dish network. Under the system, known as Google TV Ads, Google acts as a middleman of sorts, helping advertisers upload video advertising so that it can be played on networks that the marketer picks. The concept, if successful in more widespread fashion, would give advertisers more ability to customize their ad plans, and select media outlets they think help them reach audiences based on demographics or even common interest.
Zeroing in as audiences fragment
NBC Universal sees the alliance as a way to develop better ad-effectiveness measures for current advertisers and a way to bring new clients to TV, Ed Swindler, chief operating officer, NBC Universal ad sales, said in an interview. "Google has access to many, many clients that are not currently buying television," Mr. Swindler said. The system is "well positioned to attract" smaller advertisers "who just can't be serviced by traditional TV channels. As TV continues to fractionalize, these clients will play a more important role in growing TV ad sales. That's true for national advertising. It's particularly true for local advertising."
But Google's idea has been a controversial one. As Mr. Swindler indicated, Google often deals with smaller advertisers who are unaccustomed to national promotions of the sort that run on cable and national TV networks, so its effort is seen as one that might bring new advertisers to TV. But its work in this area has made TV networks and media-buying agencies wary, because it sets the search-advertising company up as an interloper in an area that more traditional players have long controlled.
Indeed, many TV networks were initially aghast at an online-auction idea floated by eBay and other marketers that would have allowed advertisers to bid electronically for advertising inventory. While cable channel Oxygen took part in that effort, before its purchase by NBC Universal, the idea was ultimately scrapped.
Much to gain, if successful
Under the plan, NBC and Google will form a multiyear advertising, research and technology partnership and "will work together to develop more effective advertising metrics, attract non-traditional advertising partners to NBCU" and help marketers "incorporate self-service buying opportunities," the two companies said in a statement.
NBC Universal, owned by General Electric, will make national advertising time available to Google from cable channels Sci-Fi, Oxygen, MSNBC, CNBC, Sleuth and Chiller, with potential to expand to NBC properties in the future. The company's broadcast network, NBC, is not part of the pact at this time; certain technology issues may be at play. The two parties also agreed to work jointly on adapting the Google technology for local advertising.
As part of the agreement, NBC Universal will "maintain its direct relationships with agencies and advertisers and can set parameters around the purchase of the available ad time." The two companies said they will share in all ad revenue.
The pair said they will also collaborate on a series of marketing and research projects using Google TV Ads, which can report second-by-second set-top-box data. That measure has become more popular as companies such as Starcom USA, TNS and Nielsen have offered plans to help advertisers get more precise data about how viewers watch TV, skip across channels, and use digital video recorders.
Getting "better metrics that are clearer, richer, deeper" is an "imperative" for NBC Universal, said Mr. Swindler. "And it doesn't stop with set-top-box data."