• by Cory Treffiletti , Featured Contributor, August 6, 2002

Please imagine the following scene from a local diner:

The customers are eating their tuna melts and sucking down their vanilla milkshakes. Flo is colorfully singing out the orders with her hairnet pulled tightly back around her head while Mel is in the back, charcoal spatula in hand, sporting a filthy apron covered in 13-year-old grease. Mel hollers back, “Cheeseburger, extra pickles.” Ding! “Order Up!”

This is my impression of the technology behind most Inventory Management Systems in place for the major online publishers these days.

The planning cycle for the Internet is a fast one. That cannot be disputed. It’s not the exception to have a campaign go from RFP to Authorization inside of two weeks, but I think we would all agree that it is preferable to undertake a planning cycle of at least 4 weeks, if not slightly longer. Time provides the opportunity for deeper research, tighter strategies and better negotiations with publishers. For true strategic thought to enter into a campaign, media buyers and sellers NEED time. Time, however, does not appear to be a luxury currently afforded by most Inventory Management Systems.

I submit to you Exhibit A:

Recently, I placed a campaign for a client on one of the top 10 sites. The campaign was juicy, not a huge amount of money, but enough to get the reps interested. We issued the RFP, and received final sign-off from the client about 3 weeks later. This was a renewal of previously purchased inventory and when we went back to purchase it again, it was “No Longer Available,” even though it had already been offered just 3 weeks prior. We bickered back and forth, finally able to run approximately half of what was originally offered, and the campaign went live. After reviewing the weekly reports, we noticed that the placement actually overdelivered by 241%. Now, don’t get me wrong, I love overdelivery and all, but why was there an issue with the availabilities in the first place? And why didn’t we receive the right of first refusal on said inventory in the first place, thereby negating the issue entirely?

This is not uncommon, but it is very frustrating for advertisers. The need to confirm inventory availability on a weekly basis is rather ridiculous and adds to the complexities of planning online media. These complexities are among the issues that make our medium undesirable to traditional advertisers.

Inventory Management Systems are key to the operation of all online publishers. They are crucial to sales people and for quarterly projections. There are some standard elements that need to be included, so I ask you to review a few of these and see if your system is up-to-date:

Does your site allow for notation of proposed inventory? Sales people can enter inventory into their system, and be notified when someone else is proposing the same inventory via a red flag email. Obviously the first person to issue an IO secures the inventory, but at least the media buyers will have a “heads up”.

Does your system allow for earmarking inventory that has been purchased multiple times by the same advertiser? This way, a simple right of first refusal system can be implemented.

Is there a period-lock where inventory cannot be double-proposed? Could sales people conceivably pitch the same inventory and sell it at the same time? Why not create a system where premium inventory is locked in for 5 business days after the initial proposal, after which point the notation of proposal takes over?

Does your system show month-to-month traffic trends for the inventory, detailing if there has been some unusual growth or decline in that area that may affect the delivery goals for an advertiser?

None of these are earth-shattering concepts. These are simple elements that should already be in the system. If they aren’t, then how efficient can your sales team possibly be?

The most important relationship existing in advertising outside of that between the brand and the consumer is the relationship between the sellers and the buyers. Poor Inventory Management Systems can have a negative affect on this relationship. When inventory is proposed, there needs to be an efficient system in place to ensure that inventory will still be there. If it is highly contested inventory, then let the buyers know that upfront. All that we ask for, on the buying side, is the full story upfront. If it is contested, let us know. If it is being currently purchased and the current advertiser has right of first refusal, let us know. This type of full disclosure helps build and strengthen the relationship between buyer and seller. A poor Inventory Management System only serves to create an adversarial relationship, and that just ain’t good for business.

What is your Inventory Management System doing right or wrong? What are you using and would you recommend it to other publishers? Let me know on the Spin Board.