Google, NBC Universal End TV Ad-Sales Pact Early; Agreement Allowed Google to Sell Cable Inventory
By Brian Steinberg
Google and NBC Universal have dissolved an intriguing ad pact they established in 2008 nearly a year before it was set to expire, dealing a setback to Google's ambition to become a big player in TV ad sales.
Under terms of the pact, which was set to end in the fall of 2011, Google was allowed to sell advertising inventory on select NBC Universal-owned cable outlets -- such as Syfy, Oxygen, MSNBC, CNBC, Sleuth and Chiller -- with the potential to expand to other networks down the line. That was seen as an important step in Google's efforts to expand its reach beyond its main business, paid-search advertising on the internet, and get into TV in a significant way. For NBC, the agreement was described as a way to bring in new advertisers, particularly the local ones Google often deals with.
Rather than expanding, however, the pact has ended early. "We're not currently contributing inventory into the Google marketplace, but we continue to work with Google on multiple projects involving advanced advertising," NBC Universal said in a statement Wednesday.
"While we are no longer offering NBC Universal inventory through Google TV Ads, NBC Universal continues to be a great partner to Google," Mark Piesanen, director of strategic partner development for Google TV Ads, said in a statement. "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." The two companies are also both investors in Invidi Technologies Corp., a company involved in developing the technology behind addressable TV advertising.
The end of the arrangement, however, leaves Google without access to the broad inventory of a top-tier media company. It continues its TV-advertising efforts with satellite-providers DirecTV and EchoStar's Dish Network as well as some smaller cable outlets, including Hallmark Channel, Tennis Channel, Ovation and CBS College Sports.
NBC and Google's ad-sales agreement was an unusual one. NBC Universal raised eyebrows by allowing Google to sell some of its cable channels' inventory. At the time of the deal's unveiling, ad-buying executives suggested Google wasn't getting its hands on prime ad inventory, but rather less desirable stuff.
Under the terms of the pact, NBC was able to set a floor for pricing as well as quality standards. The company also maintained control over its inventory, so that if a Google TV ad were to pose a conflict with another advertiser on air, the Google ad would have to run in a different fashion.
A person familiar with the situation said NBC Universal felt the Google ad system worked but that it added the most value to smaller, unrated TV networks. While Chiller and Sleuth were unrated when the pact was established, they are both rated now.