Google's (Nasdaq: GOOG) AdWords for TV commercials program took a heavy hit this week, when its biggest network partner, NBC, declared that it isn't "contributing inventory into the Google marketplace" anymore. In other words, would-be advertisers can't bid on airtime slots via Google's ad system, because NBC isn't giving Google any.
NBC, currently majority-owned by General Electric (NYSE: GE) but soon to become a Comcast (Nasdaq: CMCSA) subsidiary, never did enter its prized namesake network into this deal; Google now has to do without channels like CNBC, MSNBC, Oxygen, and SyFy. In fact, AdWeek and others report that NBC only ever used Google's system to sell otherwise unsellable ad space on weekends and off-hours, at night or the middle of the day. Primetime shows were always handled by NBC's own ad sales processes instead.
Pulling out because Google underperformed under these conditions doesn't seem entirely fair, but the AdWords system was always sort of alien to the entrenched buyers and sellers of media space. Pulling off an instant revolution worked online, where Google owned the biggest, baddest search engine and could set its own rules. It's harder to tell NBC, Walt Disney (NYSE: DIS), and CBS (NYSE: CBS) how to run a selling process they've owned for decades and perfected to a high sheen -- at least in their own minds. Google's solution could target ads with unheard-of precision and report back viewership statistics by way of digital cable boxes, but the auction format made everyone just a little nervous.
Rumor has it that many of the remaining Google partners are thinking about jumping ship as well, and I wouldn't be surprised to see Tennis Channel, Bloomberg TV, Ovation, and others doing exactly that. Mark down this first iteration of AdWords-driven TV advertising as an abject failure -- but don't forget that Google is sticking a more direct finger in the marketing pie with the Android-powered Google TV platform.
Will Google ever make a grand entrance into our living rooms, or should Big G just be happy with its online presence? Discuss in the comments below.
Fool contributor Anders Bylund holds no position in any of the companies discussed here. Walt Disney and Google are Motley Fool Inside Value picks. Google is a Motley Fool Rule Breakers recommendation. Walt Disney is a Motley Fool Stock Advisor choice. The Fool owns shares of Google. Try any of our Foolish newsletter services free for 30 days. True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.
