NBC To Use MSFT’s Tech For Selling Some TV Ads; Staying Away From Auction Format
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Update: The release is out with the details of the deal, here: “NBCU (NYSE: GE) will sell advertising inventory through Microsoft’s Admira marketplace, enabling advertisers and agencies to plan and optimize media buys on NBCU’s national networks and local broadcast station, KNBC Los Angeles.”
SEE ALSO: It Doesn’t Have Jimmy Kimmel, But Google TV Ads Makes Upfront Splash
NBC is the first major TV network to experiment with selling some of its TV inventory online, using technology from Microsoft (NSDQ: MSFT), according to WSJ. An announcement will go out tomorrow. NBC Universal, the parent, already had a cable ad deal with Google for a similar experiment that they signed in September last year, though that was based on the auction model that the search giant’s known for. Unclear: if the Google deal will continue. We have a query into NBCU and will update this when we know more. Update 1: Sources tell paidContent that the MSFT deal does not impact NBCU’s arrangement with Google (NSDQ: GOOG). “The ad deals with MSFT and Google are entirely different models,” the source said. Update 2: A statement from Mike Steib, the director of Google TV Ads (who came from NBCU): “We’re happy to see other companies also innovating when it comes to TV advertising and we look forward to continuing our strong relationship with NBC Universal and our other inventory partners.”
The new MSFT-NBCU deal, slated to start in Q4 this year, will NOT involve auction, and the two parties will share revenue from the ads. Also, NBC is staying away from offering any inventory from the current upfront season, the story says. Mike Pilot, president of sales and marketing at NBC Universal, quoted in the story, says that this automated system will free up time for the company’s sales team to come up with more customized solutions, such as product placements.
Earlier today DirecTV (NYSE: DTV) announced a deal to start serving geo-targeted ads across its satellite network, though that’s not supposed to go live until 2011. Google’s slowly racking up deals in the space, after some early mis-steps, while eBay (NSDQ: EBAY) exited out of it mid last year, after struggling to get traction.
—David adds: It’s not surprising that NBCU is stressing that MSFT is not creating an auction platform similar to what eBay tried two years ago. The eBay effort was doomed when members of the Cabletelevision Advertising Bureau balked at participating in the company’s Online Media Exchange after damning the program as too narrow and ineffective. Google, on the other hand, has slowly tried to strike up alliances with networks like NBCU and ad firms like Publicis Groupe to build acceptance for its targeted ad buys. Still, it too has struggled to attract clients. In the meantime, Google has also tried to play to its strengths like placing marketers’ ads on broadband videos of TV shows. That suggests that the TV game, especially as advertisers continue to reduce spending on both traditional and new media, is a tough nut to crack. And MSFT, despite this high-profile deal with NBCU, will continue to face challenges on the ad front as well.
Posted In: Advertising, Media & Publishing, TV, Companies, Microsoft, NBC Universal, NBC
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