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CBS, Google Deal Impending; Could Involve Radio, Local TV

A major ad sales agreement between Google and CBS is imminent, and would likely include both advertising and content components, believes Merrill Lynch.

Merrill Lynch expects that such an ad sales arrangement would primarily involve CBS’s radio inventory, and likely would not include network or local TV station time, writes MediaPost.

Merrill Lynch analyst Jessica Reif Cohen believes that the deal would include low-quality radio inventory for use with Google’s dMarc radio service.

Were the deal arranged so that Google Audio would sell 10 percent of CBS Radio’s ad inventory, it could generate approximately $200 million in revenues, while CBS would likely attract new advertisers to its platforms and create a more efficient sales model that would reduce the cost of selling advertising, according to Cohen.

Google’s move into offline ad sales has caused concern on Madison Ave., not without reason. Such a deal “could involve disintermediation of traditional advertising buyers over time,” Cohen is quoted as saying. She points out that Google deals could commoditize ad time and cause related pricing pressure.

AdAge writes that the radio agreement is all but sewn up, and claims that Google and CBS are now in heavy negotiation for other content and inventory deals, the most interesting of which would be local TV ad inventory. If local TV inventory does make up part of the deal, it could be Google’s wedge into the $60 billion U.S. television advertising industry.