Google Deal Extension with Publicis Threatens TV Ad Sales

In an extension of the deal in which advertising holding company Publicis Groupe agreed to buy up tens of millions of dollars of YouTube’s advertising, the company’s agencies DigitasLBi and Razorfish will also buy $100 million of Google advertising across several of its platforms, including YouTube, Google+ and Hangouts. Publicis is getting a sizeable discount, and Google is positioning itself to compete more fiercely with TV advertising.

“The deal includes access to inventory through Google’s banner and mobile ad networks, as well as inventory on its actual websites such as YouTube and brand pages on Google+ and Hangouts, among others,” reports Advertising Age. “The groups will also work together on campaigns that include new creative content and Web videos through YouTube.”

According to Business Insider, major media buyers still spend more than 60 percent of their advertising budgets on TV, even though, these days, consumers spend more of their time online.

By reaching this agreement with Publicis, however, Google is working toward “mak[ing] big consumer brands more comfortable spending money on YouTube by making the online video ad-buying process more like the TV buying process those brands are used to,” notes BI.

But unlike the more traditional TV advertising model, YouTube also allows for advertisers to distribute “standalone branded content,” like the viral Dove Real Beauty Sketches ad that earned 56 million views.

“On television, the best brands can do is purchase what is called a ‘rented audience,’” BI writes. Which is why, it says, the deal between Google and Publicis should be “broadcast TV’s worst nightmare.”

“The DigitasLBi and Razorfish commitment comes on the heels of similar partnerships between Google and Publicis’ MediaVest and YouTube’s more formal content-creation program for its top agency partners,” notes AdAge. “Also, Yahoo recently inked a content deal with Starcom.”