As a TV company, CBS (NYSE: CBS) has long skewed older, a notion CEO Les Moonves has both embraced and bristled at. The company's $1.8 billion purchase of CNET (NSDQ: CNET) Networks could help alter that image, even as CBS has made notable strides on its own with CBS Interactive and digital acquisitions like WallStrip and Last.fm. I spoke with several digital ad agency execs about their initial impressions and, so far, it's hard to find much downside for either company. The main points: CBS gets access to a younger audience interested in tech products - meaning, unless CBS flubs things somehow, it will have an easier time attracting consumer electronics marketers, in much the same way having MarketWatch brought in financial services advertisers.
Although the announcement was made a day after CBS' upfront presentation, during which Moonves and company highlighted the network's wider focus on new media in addition to TV, the combination isn't likely to impress buyers and advertisers all that much yet. Greg Smith, COO of Neo@Ogilvy, OgilvyOne's digital and direct media unit, told me: "I think the acquisition will be mentioned in passing, but the upfront is still all about TV. Buyers might congratulate CBS and then say, 'Okay, let's talk about Wednesday night primetime.'" More after the jump.
-- Cross one item off the wish list:Tim Hanlon, EVP-Ventures, Publicis' Denuo: "It's a smart, focused vertical buy that gives [CBS] credible content in the tech genre that can easily be leveraged across multiple CBS properties, especially radio and news. Simultaneously, it gives CBS broader reach online with a top publisher. I could easily see this becoming a template of sorts for other vertical content forays, and you've got to think Weather Channel/weather.com might be next up on CBS's wish list."
-- CBS' life line: Curt Viebranz, the former head of Tacoda and AOL's (NYSE: TWX) Platform-A, said he views CBS' move as buying a new lease on life - or at least it has the potential: "CBS is in a dying business so making a digital bet makes sense to me. In the meantime, CNET has had two ex-Time Inc.-ers Jack Haire and David Morris - Haire as a consultant and Morris as an employee - with deep brand sales experience courting traditional brand advertisers and trying to raise CNET's profile in the ad community. I presume that CBS feels as if they can improve the performance of the business with minimal cost cutting. Remember the days of MarketWatchand I actually say that CNET is a better fit than MarketWatch."
-- All about scale: Alan Schanzer, managing partner, at WPP Group's MEC Interaction said this deal won't affect the current TV marketplace negotiations but it will help CBS follow through on the emphasis it gave to "the portability of content" at Wednesday's upfront presentation. Schanzer: "It gives them more places to showcase their programming or invite audiences back to view their programming. This is where scale becomes critically important. It's not always going to be the case where people go home and turn on their TV to watch CBS. It will be much more about CBS going out to this mass audience of people and saying we have this content, come watch it. That's why we think the blended marketplace that this deal creates is so interesting, because the flow of content works in both directions."
-- A place inthe valley: There aren't many CNETs out there, said Dave Morgan, Tacoda's founder and also a Platform-A alum, lauding CBS' decision. "It diversifies an advertising base for them, because the tech advertisers were not ones that CBS could historically reach It also gives them a big Silicon Valley footprint. It makes them a player there now. I know Michael Marquez [VP, strategy and corporate development at CBS Interactive] has been out there. But buying CNET gives CBS greater access to talent, to deal flow. A lot that happens in this space happens in the Valley, and if you're not there, you're not part of it."
-- Mutual benefits: In the end, said Neo@Ogilvy's Smith, the deal is about the need for CBS to acquire content and update its identity as a media company that is mainly known as a broadcaster. "CNET has been moving from a heavy-duty tech site to more of a lifestyle site, albeit with an emphasis on technology. By having CNET as part of the family, you can have CNET's talent, content and authoritative reputation on CBS TV and its other properties CBS is primarily a TV company. The news division has been increasingly under-financed and this can provide a shot in the arm. Plus, CBS isn't getting any younger over there."
By David Kaplan