• by October 24, 2000

It's official - traditional advertising can and is being bought with the help of the web. Confirming a mention in the Myers Report last week, the H.J. Heinz Company officially announced today that it has conducted the first-ever reverse auction for television advertising.

With the help of FreeMarkets, Inc., Heinz sourced a contract for national television advertising. The advertising is for its Bagel Bites brand of frozen pizza-topped snacks.

"We are very excited to have pioneered this cutting-edge method of purchasing advertising," said Heinz Media Director Charles Lanphear. "By sourcing our contract through FreeMarkets, we were able to lock in advertising spots on the right network at the right price and on the right programs. In short, we're maximizing our advertising spending and efficiency."

Working with the FreeMarkets' market making team, media buyers within Heinz, as well as representatives from the company's outside advertising agencies prepared a detailed Request For Quote (RFQ) which not only specified the time period during which advertisements will air, but also the kind of programming during which they will be broadcast.

According to company officials, FreeMarkets and Heinz identified broadcast providers who could supply advertising space during programming and times that would attract Bagel Bites' target audience of teens. As first reported in the Myers Report, Heinz sent a memo to the cable networks, inviting them to participate in the "multimillion-dollar" cable TV buy for the first quarter of 2001 and nearly half a dozen suppliers participated in the auction, including a number of national television media outlets.

The suppliers were trained in the use of FreeMarkets' BidWare technology, which creates an interactive environment in which suppliers can submit bids in real time and respond to subsequent bids made by other suppliers.

According to the announcement, more than 20 bids were submitted for the Heinz contract during auction, which lasted about one-half hour last Friday.

"We are very pleased with the results of this event and with the FreeMarkets process," Mr. Lanphear said. "Media buying is a complex task, and FreeMarkets helped to simplify it by enabling us to source exactly what we need, while saving considerable time, paper work and hassle."

"Heinz has clearly set a new standard for media buying with this auction, and we are extremely happy that they chose to work with us to make it happen," said Jason Reneau, director of consumer business at FreeMarkets. "Our eMarketplace is ideal for sourcing complex goods and services in markets where supply is tight, and we are happy to have successfully leveraged our technology, information and services to create a market for a strategic purchase that delivered results to Heinz."