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Auctions on EBay may be adored by millions of consumers around the world, but the large cable tel... Online auction sets up exc

Submitted by admin on Sat, 2007-04-07 11:00.

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 Thursday.

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 Communications’ 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, Cunningham said.

"By going to this online bidding system that eBay was sharing with us, we’d be taking a step backwards," said John Muszynski, chief executive of Starcom USA, an agency in the Publicis Groupe that buys ads.

"We have now integrated the buying process into the marketing process. We’re doing product integrations. We’re doing significant added-value. We’re doing promotions."

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.

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