• by David Goetzl , August 3, 2007

The plucky Oxygen network has cut the first deal using the eBay-enabled online TV buying exchange--a prospect that appeared farfetched only four months ago. Inked with Universal McCann on behalf of the agency's client Intel, the agreement will make the tech giant a first-time advertiser on the female-targeted network.

While large cable networks and their trade group (the Cabletelevision Advertising Bureau) said in April they would have no involvement in the eBay Media Marketplace, Oxygen opted to break ranks in hopes of finding a pipeline for new business. And by adding blue-chip Intel to its advertiser base, it has.

"We want access to business that we may not normally get," says Mary Jeanne Cavanagh, ad chief at Oxygen, a CAB member.

The third-quarter scatter deal with Intel is valued in the six figures, and the tech company will use the time to plug a new Core Duo processor. In addition to spots, the agreement covers a sponsorship of an Oxygen movie package.

Cavanagh said Oxygen is working on a second deal via the eBay system--which is still in test mode--with one of three other marketers that has been a steadfast supporter of the Marketplace even in the face of network opposition. They are Hewlett-Packard, Microsoft and Home Depot, although she declined to name which one.

Oxygen's success at executing the deal via the Marketplace--which also has a radio exchange in addition to its cable TV capabilities--seems to contradict some of the reasons the CAB and other networks cited as to why they would not work with the buy-side to develop it.

One was a contention that the modern buying-selling process has become so complex--covering much more than peddling traditional spots and spreading into broader marketing initiatives--that it couldn't function successfully within a system that doesn't allow for one-on-one, face-to-face conversations. Yet the Oxygen-Intel deal goes beyond a run of :30-second spots to include a sponsorship aspect.

Some networks also argued that an online system could reduce their inventory to a commodity, perhaps bringing price erosion. But Cavanagh said the Intel deal involved pricing that "kept the integrity of the rate card" and offered no discounts relative to other advertisers.

A CAB rep said the group only made a recommendation that its membership not work on the development of, or participate in, the eBay system. Oxygen is "entitled to going in any direction they want."

A call to eBay inquiring whether other networks have joined Oxygen on the system's sell-side was not immediately returned.

Cavanagh, executive vice president, ad sales at Oxygen, said the Intel deal took about three weeks to execute. The network and Universal McCann went back and forth via an email function in the system, but didn't use the phone. She said she encountered no problems with the system's functionality--something the CAB had questioned.

The six-figure deal value would appear to indicate that marketers such as Home Depot and Microsoft, which are eager for the system to gain footing, have millions more that they're ready to spend in the process. The Wall Street Journal reported that the group had pooled between $5 million and $8 million to spend online during a test period.

Home Depot in particular has indicated that it may reward networks that sign up to sell via the system. In April, CMO Roger Adams said the home-improvement retailer buys time on about 12 cable networks, but another network's willingness to participate in the eBay system could thrust it into planning discussions at Home Depot. "If it's a network we're not advertising with, it would be a great way to get on our radar screen," he said.

Still, major cable network groups, such as ESPN and Turner, joined the CAB in disavowing any interest. In some 73 million homes, the independent Oxygen is growing, but is not yet a fully distributed network. Its ad revenues (in the $100 million range in 2006) place it on a level below what Disney and Time Warner channels command.