Monday, January 15, 2007

Google Selling TV Advertising

Advertising Age has a look at the pending Google-CBS deal.

From the article:

"Under the deal, Google would offer CBS revenue guarantees for content licensing and the reselling of traditional media inventory. Those close to the talks said negotiations have included CBS making local TV spots available for Google to resell.

"Google is poised to be a major player in national ad markets in all media," said Barry Parr, analyst at Jupiter Research. "They've learned some things about self-service ad sales that will be useful to them in other markets." And he believes the struggles of local markets -- thanks to consolidation of advertisers, competition from the internet and competition with non-media marketing tactics such as direct mail -- will provide an opening for a player like Google.

Jessica Reif Cohen, an analyst with Merrill Lynch, issued a note last week and said if the CBS-Google pact included 10% of CBS Radio's advertising time, that portion of the deal could involve about $200 million in revenue. She also suggests it could lead to the disintermediation of traditional advertising buyers over time.

Indeed, a deal with CBS will help boost its struggling radio and, possibly, local TV ad sales divisions. CBS Radio revenue is down 7% through the first three quarters of 2006, and local TV is expected to face difficult comparisons in 2007, since it got a boost last year from the 2006 elections. Contrary to many assumptions, the deal wouldn't be just for remnant inventory, and would be instrumental in helping Google get its audio-advertising business off the ground."

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