The Cabletelevision Advertising Bureau said it would pull out of an online ad exchange program proposed by auction firm eBay, explaining it is the "best decision for the industry and its advertisers." eBay's test product, dubbed "Media Exchange," was cited by the CAB as having several shortcomings.
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The nation's largest cable TV trade group is dropping eBay (Nasdaq: EBAY) from its prime-time lineup, saying it would withdraw from an online advertising exchange program proposed by the auction giant.
The Cabletelevision Advertising Bureau (CAB), which represents big-named networks such as ESPN, Discovery and A&E, said, "it is the best decision for the industry and its advertisers."
eBay's test product, dubbed "Media Exchange," is an auction-style ad buying and selling program. CAB cited several shortcomings with the system during testing -- Media Exchange's failure to capture "idea-driven intelligence" were among the reasons given, as well as the fact that not everyone in the agency world was sold on it.
The CAB was hoping the proposed experimental program would leverage eBay's auction expertise and technology to help media companies buy and sell TV advertising.
Cooperative Efforts?
Although the deal was designed as a cooperative effort, the CAB clearly is pinning its demise on eBay.
The refusal by major members of the agency community to consider eBay's proposed interface led to the CAB's decision to pull out, Sean Cunningham, president and CEO of the CAB, told the E-Commerce Times.
"Throughout our review, it became apparent that the Media Exchange was too narrow an application, had clear connectivity issues related to cable's emerging end-to-end e-business platforms, and lacked the provisions necessary for capturing critical strategic and idea-driven intelligence during a buy," Cunningham said.
Few Backers
Although some advertising big spenders had backed Media Exchange, including Home Depot and Toyota, others had concerns that its online system would remove too much of the human element from the buying and selling process.
eBay had planned to use the online exchange to sell cable broadcast time -- as well as radio and print ads -- to advertisers. The busted deal now puts serious crimps in their plans.
Starting Over
The CAB is expected to go back to the drawing board and look at other companies and digital opportunities to bring a feasible ad-selling model to life.
However, the organization was quick to point out that it hadn't put too many of its eggs into the eBay basket.
Initially, the group intended to invest US$50 million in the program. That is less then one percent of the cable industry's yearly ad inventory of $60 billion, according to CAB.
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