Google, NBCU Cancel TV Ad-Sales Pact

NBC Universal and Google have discontinued their ad sales partnership begun in 2008, the companies have confirmed. The split deprives Google’s TV ad sales unit of one of its major alliances, although it still has deals in place with Dish TV, DirecTV and a handful of smaller networks like Ovation and the Tennis Channel.

The NBCU networks covered under the arrangement included CNBC, MSNBC, Oxygen, SyFy, Chiller and Sleuth.

Two years ago, when the deal was struck, it was seen as a groundbreaking boost for Google’s efforts to transform the TV business by providing a powerful online platform for ad sales.
But sources said that NBCU had concluded that there was little value derived from having an Internet company sell its ads. Some of the nets—like Chiller and Sleuth—were just getting off the ground at the start of the deal, and are just now being assigned to national sales teams at NBCU, according to sources.

Buyers complained that the sales proposition was somewhat exaggerated compared to what was actually available through the Google service. “There was little if any prime-time inventory available for Syfy,” said one buyer. “It was weekend or daytime or overnight. And with Oxygen you couldn’t even get daytime and it was mostly weekend or overnight. So there were a lot of issues that had to be explained to clients once you got under the hood.”

Buyers also have questioned Google’s approach—selling spots to the highest bidder via an online auction process—for some time.
Back in January, Rob Norman, North American CEO of WPP’s GroupM, said the Internet company’s approach to ad sales wasn’t that attractive to clients, at least for now. “What Google is good at—the matching of actual or implied intent with relevant messaging—is really hard [on TV],” Norman said at the time. “As a result, it’s hard to get very excited about the proposition, even if you are a long-tail advertiser. Only a mug writes Google off, but I don’t see their efforts as transformational in the short term.”

Others also criticized auctions as a device for selling TV advertising. “I don’t believe the TV marketplace is ready for that,” said Tracey Scheppach, svp, video innovation at Starcom MediaVest Group, earlier this year.

But Google, which offers significant amounts of remnant and DRTV inventory at low prices, is credited with bringing smaller businesses to the TV space that otherwise wouldn’t be there. It has said about a third of its clients are new to the medium.

Google doesn’t release sales figures for its TV ad sales service. But the company has remained steadfastly committed to the auction model for selling TV spots.

Of the decision to terminate the TV ad arrangement, NBC said: “We’re not currently contributing inventory into the Google marketplace, but we continue to work with Google on multiple projects involving advanced advertising.”

Google added: “While we are no longer offering NBC Universal inventory through Google TV Ads, NBC Universal continues to be a great partner to Google. Both NBC and Google are committed to bringing more relevance to TV viewership and advertising. CNBC is an important partner in the launch of Google TV and we are working together on research studies.”