Google strikes deal with Nielsen on TV ad data

By Michele Gershberg

NEW YORK (Reuters) - Google Inc (GOOG.O) and television ratings company Nielsen will announce a multi-year deal on Wednesday to provide demographic data to Google's system for selling television advertising.

The agreement is an important step for Google, which is viewed warily by traditional media companies as it tries to extend its dominance of Web search advertising into other outlets, from print to radio and television.

Its entry into selling television ads earlier this year had raised questions within the media industry about whether it would try to compete directly with Nielsen on ratings data.

Google TV Ads is a Web-based system that aims to make buying commercial time on television more efficient, both in terms of delivering the ads and by giving advertisers more precise data on their impact among viewers.

Google will combine the data it receives from television set top-boxes with information that Nielsen, the dominant TV ratings company in the United States, provides on viewers by gender and age. The information will become available in the coming weeks.

"Based on the early feedback, we are quite optimistic this will scale very quickly," said Keval Desai, product management director at Google TV Ads, referring to Google's television advertising system as a whole.

He said hundreds of thousands of advertisers already use Google's technology for buying search listings and the company aimed to make it easy for them to migrate to a similar system for television.

"If you offer television and even mobile ads through the same user interface, the friction is quite low in terms of starting to use that very quickly," Desai told Reuters.

Google and Nielsen described the data deal as the first phase of a new relationship. Nielsen Chief Executive David Calhoun said in a statement he expected the ties with Google would expand significantly in the coming months.

"For our agencies and advertisers, a key concern for them is the accountability of advertising," said Terrie Brennan, senior vice president of new business development at Nielsen.

Nielsen aims to make its data available in new ways, and hopes its partnership with Google will give it access to a new client base as well, she said.

"This is an opportunity to bring more advertisers to the television medium from the online space," Brennan said.

Google CEO Eric Schmidt had flagged the estimated $70 billion U.S. television market as an opportunity that "looks like it is going to grow very quickly." He made the remarks when the company reported quarterly earnings last week, including a 46 percent jump in profit.

U.S. television advertising spending declined 2.4 percent in the first half of this year to $31.6 billion from a year ago, but remained the largest media spending category by far, according to tracking firm TNS Media Intelligence.

Industry watchers expect far more of those ad budgets to shift to the Internet, where spending grew 18 percent in the first six months of 2007. Some believe an even quicker shift could occur as viewers spend more time watching TV clips online.

Google's TV Ads system has access to about 14 million U.S. homes through agreements with satellite television operator EchoStar Communications Corp. (DISH.O) and local cable provider Astound Broadband.