NBC Universal, Google scrap ad alliance

Sources said media conglomerate concluded that there was little value derived from having an Internet company sell its ads.

NBC Universal and Google have discontinued their ad-sales partnership that began in 2008, the companies confirmed Wednesday. The split deprives Google's TV ad-sales unit of one of its major alliances, though it still has deals in place with Dish, DirecTV and a handful of smaller networks including Ovation and the Tennis Channel.

The NBC Uni 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 NBC Uni had concluded that there was little value derived from having an Internet company sell its ads. Some of the nets such as 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 NBC Uni, according to sources.

Buyers complained that the sales proposition was somewhat exaggerated compared to what actually was available through the Google service. "There was little if any primetime inventory available for Syfy," one buyer said. "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.

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."

But Google, which offers significant amounts of remnant and direct response TV 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.

Said Google: "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."

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