• by John Hallenborg , June 21, 2002

Forget the phone and fax. A growing array of websites is leading to direct online access to national, regional and local markets. It is no secret that workloads for media buyers and planners have gotten markedly heftier in recent years. With the proliferation of hundreds of TV channels, online commercial activity and print vehicles, Jane Groth, a senior vice president for Publicis Hal Riney, says that workloads have “quadrupled.” A key question posed by all this activity is how to get all that work done more efficiently.

If you are eager to diversify your work habits, direct online access to national, regional and local markets leads to a growing array of choices in the point-and-click domain, drawing users away from the phone and from fax machines. Online buying of offline time and space is still in a formative mode. Interactive bidding, for example, which will represent a breakthrough in online service, is probably a year or two down the road.

The personal touch is a key impediment to growth in this Internet sector, but there is no mistaking that a trend is underway and a few years hence, the Internet will become a significant support marketplace for traditional media deal making. There are basically two types of process models available. One is for basic bidding for spot and distressed inventory posted online and the other is a buyer-driven process whereby requests for avails are specified and posted by buyers. Sellers then peruse the postings and try to meet the specs.

One that utilizes the latter model is Buy Media (buymedia.com) which addresses broadcast media. Jackie Walts, marketing vice president, reports that the site is handling $2 million in avails requests per day online versus $100,000 per week only a year ago. Buy Media is a de facto marketplace, although Walts adds that, “negotiations will remain offline for now, as it seems that no one is willing to give up the person-to-person contact.” Buy Media makes money by collecting a monthly software licensing fee from users of the site. Users are not limited as to the amount of activity they process. On the bidding side of the equation, AdOutlet (AdOutlet.com) and One Media Place (onemediaplace.com) offer online, TV and radio inventory. AdOutlet CEO Alan Masarek says that “we come at the business from a unique platform perspective, using a proprietary web-based inventory system for all media. AdOutlet’s revenue model is based on the seller paying 5% to 15% of a transaction, depending on dollar amount and number of ads placed.

“The concept is to provide the buyer with a demographically targeted media search,” Masarek continues. “The system returns ‘avails’ that are tailor-made for a buyer’s particular needs at that time.” The system went live in mid-1999 and aggregate inventory today is about “a hundred million dollars, whereas six months ago the figure was about one third of that.” AdOutlet currently benefits from traffic generated by 8,000 buyers and 500 media property sellers. The service features a private bidding environment; i.e., only the seller and prospective buyer can see the numbers. Negotiation parameters are limited to accepting or rejecting bids as they appear at the seller’s terminal.

One Media Place (onemediaplace.com), formerly AdAuction, had enjoyed some success selling online and outdoor space. But under the fresh corporate banner, the outfit has repositioned itself, adding print and broadcast media to its roster. One Media’s Pat Paterson, director of corporate communications, judges that the market reflects users who are “in an early adopter stage with most of the verticals. Buyers are accustomed to buying online space but it takes time to get traditional media oriented people to try tools such as we are providing.”

Unlike most other services, “the majority of negotiating at One Media Place is occurring online. Requirements are plugged in and sellers respond with spots that meet the criteria,” Paterson says. This accept-or-reject level of functionality is another status quo for the foreseeable future, if you discount the potential for chatting online through instant messaging, such as offered by AOL. He extols the value of a “fully electronic interchange” as opposed to simply posting inventory. In terms of activity, Paterson reports about 300 RFPs per day, 11,000 registered buyers and 1,000 registered sellers. Paterson says that currently, although not every element in his firm’s transactions are web-enabled, (citing delivery of art and insertions as examples) “in the next couple of years, I expect One Media Place will enjoy one hundred percent web-enabled transactions. It (the web) just makes life so much easier.”

As its moniker implies, Media Passage (mediapassage.com) is a sort of conduit for ad activity, providing an integrated solution for magazine and newspaper buys. Carl Bryant, executive vice president, reports that as a “transaction platform between buyers and sellers, unlike other services, we are paid by both sides, on a fee basis with a cap.”

Media Passage began life as an offline buying service for newspapers for a disparate group of clients. They created many online tools for their own use in placing those buys for customers and now make those tools available to others at their website. Bryant reports that this year, transactions handled for both their own clients and by others through the website interface have numbered about 10,000 per month (in 2,200 publications). Almost all of those transactions have at least some online aspect to them. “Typically, planning, scheduling and art transfer (in contrast to One Media Place) will be handled online, although a few deals are a hundred percent web-enabled.” Also, the web may be the venue of choice for order confirmation and discrepancy notices. “There may be 15 elements to each deal,” Bryant notes, so it is difficult to quantify the amount of web activity for “typical” buys.

Jane Groth of Publicis Hal Riney, whose firm uses Media Passage, adds that a sea change toward online buying will take time. “There’s a big idea out there, but how you get there, the steps have to be precise. There are many kinks to work out and even though I see the Internet as a huge growth opportunity, I think that industry-wide, guarantees of accuracy (in ad content and placement) is a major issue that needs to be more fully addressed. There is no room for error on the client side.” While stressing her contentedness with Media Passage, Groth underscores the fact that there is uncertainty in the marketplace regarding such a fundamental transition to a new, largely unproven medium.

Bryant claims that most of the other services involve “selling somebody else’s inventory,” in effect, replicating a rep model. “We are an ‘avail’ model. And another difference is that we touch the money. When McCann-Erickson places an order, we bill it, we pay it, providing an end-to-end solution.” Thus, there is an audit trail from the moment a buyer places an order through the canceled check.

According to John Speck, director of marketing for Media Space Bank (mediaspacebank.com), MSB provides advertisers with web-based tools that integrate separate data sources. These aid in making informed media choices and minimize the number of “touch points” required to execute a national newspaper campaign. Their planning tool (currently in development) returns a thorough demographic analysis of the readerships of each newspaper being considered for a given buy. Once a media plan is created, advertisers can then submit their plans as an RFP. If the advertiser accepts the returned proposal, MSB will negotiate with each newspaper on behalf of the advertiser, building in their fee in the process.

Broadcast Spots (broadcastspots.com) is another site that should appeal to both buyers and sellers of radio spots. TV avails are forecast to become part of the service in the fourth quarter of 2000, with cable soon to follow. With their new Spot Avails service, featuring 24/7 access, one can send avail requests online to radio stations coast-to-coast. Purchases are just as easy to make, with a click or two of a mouse. Registered buyers enter purchase parameters and then select the markets and stations of interest. Once program schedules, formats and ratings are reviewed, a click or two submits requests. Then the Spots Avails system faxes or emails requests to selected stations. In May of this year, Broadcast Spots signed an agreement with the Arbitron Company, which allows Arbitron subscribers to access the resource tools provided by Broadcast Spots. With these online tools, one can determine audience delivery rates and cost projections.

The trend, such as it is, toward online buying of traditional space and time will continue, but adoption and growth rates will vary greatly across media platforms. Newspapers and magazines, as more predictable message vehicles, may evince the healthiest growth. Radio and TV, more flux-oriented as to content and in the demographics they try to reach, may drift more slowly towards online venues, and undoubtedly, some online buying players will fail or get swallowed up as the sector evolves. But for buyers and planners, this is just one aspect of an exciting industry experiencing waves of change.

Freelance writer John Hallenborg can be reached at jchborg@aol.com.