NBC (s GE) announced a deal with Microsoft (s MSFT) today to implement technology that will make selling broadcast and cable TV commercial time more akin to selling online ads, The Wall Street Journal reports. This is the second such ad deal for the NBC, which also has an agreement with Google (s GOOG). But the battle to bring targeted ads to TV is just warming up, and other heavyweights are ready to jump in.
The NBC/Microsoft deal will use technology from Navic Networks, which Microsoft acquired last year, to analyze set-top box data from multiservice operators as well as other data such as consumer purchasing habits and location. Using this information, Microsoft will be able to look at where an advertiser currently places ads, make recommendations for other shows that would reach similar audiences and sell the ad time on those recommended programs.
This deal doesn’t impact the arrangement NBC has with Google, and does not use the auction model Google implements. Networks have concerns that auctions for selling TV ad space lower the value of commercial time. eBay’s (s EBAY) early attempt to use auctions for TV ad buying failed and Google has struggled to find traction for its TV Ads service, though it has struck deals with NBC (for cable outlets), Hallmark, Bloomberg and satellite provider Dish Network (s dish). In March, Google connected its TV Ads service with YouTube to streamline the process of selling ads across old and newteevee.
The notion of delivering more highly targeted ads to TV audiences is an enticing one, and activity in the space is kicking into high gear. Yesterday, DirecTV (s DTV) announced that it will be using INVIDI Technologies to deliver targeted ads to its subscribers by 2011. And Canoe Ventures, the consortium of cable companies including Comcast (s CMSCA), Cablevision (s CVC) and Time Warner (s TWC), was built from the ground up to fend off the likes of Google with better targeted and interactive TV advertising.
UPDATE: Whoops. Looks like we spoke too soon when it comes to Canoe. Multichannel News reports this morning that the the company is scrapping its Community Addressable Messaging (CAM) product that would have let advertisers run different spots in high-income cable zones nationwide. Evidently, there were problems:
Specifically, Canoe determined CAM spots would have needed to be booked 11 days before air date; the insertion could only occur following the local break; and an unknown number of Motorola receivers in the Canoe footprint would have required an upgrade to properly display alternate spots to individual zones.