The Year of Living Efficiently
If recent economic history has taught the business world anything, it's that periodically, going back to basics is essential. Yes, we need to continually stretch and embrace new ideas, technologies and trends. But without our business fundamentals under control, embracing the trend du jour is like building a house on swampland.
In the media field, one of the foundational issues that needs fixing in 2010 is the buy/sell process. Especially in the interactive realm, it's beyond puzzling why transactions are still negotiated and consummated using a combination of paper, faxes, email and phone. There is significant room for new solutions that will speed information flow, increase visibility, eliminate paper/printing/postage costs, and shorten payment cycles.
It's been proven in one industry after another that when routine work processes are shifted to an electronic environment, efficiencies result for all parties. This is especially true for the buy/sell process. Visibility and fairness is increased, since opportunities are made available to everyone. Errors are reduced due to the reduction in redundant manual input. Negotiations go faster, revisions are less burdensome-and best of all, remittance times are cut considerably, resulting in better cash flow.
For too long, publishers, media agencies and media brokers have labored with a system that hinders commerce, instead of helps it. What's needed is a standards-based, online transaction platform that integrates with both sell-side and buy-side enterprise applications. For publishers, this means direct data transfer between the platform and CRM, accounting and inventory management packages. On the agency side, connecting with buy-side systems that manage media planning, buying, traffic and accounting allows budget-challenged buyers to complete more transactions, with fewer people, in less time.
A well-designed transactional platform could even handle the full circle of media tasks such as intelligent inventory submissions and insertion order performance monitoring. Publishers and agencies alike would be able to substantiate campaign performance with real-time access to impressions, clicks and acquisition data.
The means to facilitate these new possibilities are already in place-or soon will be. The Interactive Advertising Bureau (IAB) Ad Operations Council has realized the benefits associated with conducting electronic transactions and is in the process of driving full circle business set preliminary standards based on open XML specifications. The first phase of this effort has produced standard XML specifications for public use that will enable systems to send and receive electronic RFPs, proposals and IOs.
Even more, these same XML specs also will support EDI (Electronic Data Interchange), enabling buyers to pay invoices electronically. Such improvements will pare the accumulation of days, if not weeks, out of traditional media remittance processes.
For greater transactional efficiency to work, however, everyone must be on board. Publishers need to embrace the idea that an electronic platform will benefit them as well as their clients. A number of top agencies have already gotten a start by installing internal procurement applications that expedite buy-side workflows. Such applications are already managing tens of billions of dollars of media buys at some of the more innovative media agencies.
Now it's time for the rest of the industry to step forward and address the issue. Publishers and media outlets alike should take the initiative and explore channels for electronic commerce. It's imperative to take this first step because as electronic volumes increase, the benefits grow exponentially. Let's make 2010 more effective by reaching out to major trading partners and system providers to discuss electronic business transaction alternatives. Chances are there are solutions in place today that, if adopted, could provide measureable improvements to the current media management cycle.
As a business pitch, a common buy/sell transaction platform may not be as glamorous as the next social media app or real-time entertainment breakthrough. But sometimes, in order to get more profitable as an organization-and an industry-it's more important to look for opportunities in the back office, than in the lobby.