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Bonds Are a 'Safe' Investment: A Big Lie Gets Even BiggerGoogle (NASDAQ: GOOG) and General Electric's (NYSE: GE) NBC have struck a partnership in which the search-engine juggernaut will sell some commercial inventory on a few of GE's cable properties. Examples of cable channels in this initiative include Sci-Fi and MSNBC.
This is a win-win situation for both Google and NBC. As the article states, Google gets to expand its ad-brokering universe by having access to cable inventory and reaching beyond its very successful web paradigm. For its part, NBC leverages the expertise of Google and its relationships.
It's kind of ironic when you stop and think about it -- media companies want to go beyond TV and stake a claim on the web, and Google wants to do the opposite, namely grab a piece of a more traditional pie. Nevertheless, the synergy here is quite clear, and if the slowing economy continues to challenge the advertising marketplace (as it undoubtedly will), a partnership like this one can only help the companies involved.
Yet, there's a side to this story that goes beyond the partnership itself that I find very interesting. Google can actually measure metrics that describe how a commercial is received by the public. It can do this because of a hook-up between it and DISH Network. Google can capture data from set-top boxes and analyze the stats behind broadcast-ad campaigns. This represents a great benefit for the industry as a whole.
I've always been a fan of collecting as much data as possible on ads so that they can be designed to deliver the maximum value and optimize the return-on-investment. I know TV execs might not necessarily think this is the best thing to do. After all, some advertisers could blame the content platform on which they're advertising when their commercials fail. Everyone better get used to ratings for ads, however, because the concept has been around for a while now. It's well known that ratings service Nielsen also collects data on ad viewership.
As time goes on, though, I think the industry will come to learn that technologies such as Google's can guarantee a more efficient ad-placement environment that will please all parties involved: networks, ad brokers, ad agencies, and buyers of inventory. If advertisers feel that they are getting a better bang for their buck, then NBC and Google will be able to more fully exploit the potential of content.
So, I have to say, it's the data-collection aspect of this transaction that excites me the most. Some critics will say that data on ads could influence content creation to a noxious degree, but from a business standpoint, it makes sense.
Disclosure: I own GE; positions can change at any time.
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Reader Comments (Page 1 of 1)
9-18-2008 @ 6:34PM
Ella Coley said...
You are not soo smart, you picked GE.You want to see a stock crash, wait till Obama gets elected, I predict a 5000 point fall in one day
I wish you good Luck.
Ella Coley