For Cable TV, No Interest in Selling Ads the eBay Way

April 6, 2007
For Cable TV, No Interest in Selling Ads the eBay Way

By LOUISE STORY
Auctions on eBay may be adored by millions of consumers around the world, but the large cable television networks have decided they want nothing to do with them.
Cable networks like Turner Networks, Discovery, Lifetime and ESPN have decided to boycott an online exchange designed by eBay to sell advertising time, the Cabletelevision Advertising Bureau, a trade group in New York, said yesterday.
Without the participation of cable networks, the eBay exchange will have no air time to sell to advertisers.
â€œWe donâ€™t believe that eBay is going to get this right,â€ said Sean Cunningham, president and chief executive of the cable association.
EBay was hired to build the exchange last year by a group of large marketers, including Hewlett-Packard, Home Depot and Intel. The group, which had pledged $50 million to test the project, has said that it thought placing ads in many types of media could be done more efficiently using an Internet auction rather than human negotiation.
But some television networks have worried from the start that automated buying and selling would reduce prices, and some advertising executives have said it would take creativity out of ad buying.
The refusal of cable networks to participate in the exchange not only disrupts the eBay plans but also raises questions about how companies like Google will fare as they try to bring ad auctions to traditional media like television and newspapers.
Google said this week that it would begin using its online auction system in a few months to sell television ads for EchoStar Communicationsâ€™ DISH Network. And DoubleClick announced that it had created an online exchange for online ad sales that could also be used in the future for offline ads.
Seven national cable networks tested the exchange during the last month, and executives at those networks decided it went too far in removing humans from the ad sales process, Mr. Cunningham said.
Fewer and fewer television commercials are sold alone and solely to reach a certain age or sex. â€œThe grand majority is about idea-driven packages that have got multiple consumer touch points,â€ Mr. Cunningham said.
Ad executives not involved with the eBay project expressed similar concerns.
â€œBy going to this online bidding system that eBay was sharing with us, weâ€™d be taking a step backwards,â€ said John Muszynski, chief executive of Starcom USA, an agency in the Publicis Groupe that buys ads.
â€œYears ago, you basically bought for the tonnage, you bought slots and you bought for the price,â€ he said. â€œWe have now integrated the buying process into the marketing process. Weâ€™re doing product integrations. Weâ€™re doing significant added-value. Weâ€™re doing promotions.â€
Many television networks have benefited from these broader marketing efforts, often selling 30-second spots as part of packages that include other promotions. The eBay system would not allow for that.
The group of companies that commissioned eBay said it would try to recruit other media companies to use the exchange and that it would continue to pursue relationships with cable networks. The system, they said, was never meant to support custom marketing programs.
EBay did not return a call seeking comment yesterday.
â€œThe idea of media exchanges is gaining momentum,â€ the marketersâ€™ group said in a statement. â€œWe are still bullish about the system that has been produced.â€
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http://www.nytimes.com/2007/04/06/business/media/06cable.html?ref=technology

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For Cable TV, No Interest in Selling Ads the eBay Way

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