• by Joe Mandese  @mp_joemandese, January 20, 2006

Like most things online, so-called eBiz is hot again on Madison Avenue as advertisers and agencies push to convert the costly, labor-intensive, and still largely paper-based process of buying media into automated, electronic systems. So it was more than a little ironic last week when the American Association of Advertising Agencies convened representatives of the major media to update the ad industry on their progress and it turned out that the medium that is most error-prone and least able to trade online is, well, online. "From an eBiz standpoint, we're just not ready to tackle these things," Jeremy Fain, director of industry products for the Interactive Advertising Bureau, conceded to a tightly packed audience of advertisers, agencies and other media industry counterparts in a midtown Manhattan hotel conference room. Despite being pushed by the ad community, the Internet has yet to develop any of the crucial business rules or programming schemas for buying and selling online that Madison Avenue has been asking for, Fain said.

In fact, a status report compiled by the AAAA, and listing nine essential steps necessary for eBiz, shows the Internet has achieved only one: the creation of "global definitions" and "headers" necessary for transacting business electronically. That puts the Internet on par with out-of-home, radio, and network TV as the least progressive eBiz trading partners. The most advanced are local TV stations, which, thanks to an early push by the Television Advertising Bureau, have achieved all nine criteria. "We've completed the schema," Abby Auerbach, executive vice president of the TVB, announced during the meeting.

Thanks to a corresponding push by the Cabletelevision Advertising Bureau, national and local cable TV outlets are nearly as advanced, capable of rendering the most essential steps of media buys--proposals, orders and invoices--electronically and online.

Even the most analog of all media--magazines and newspapers--have made greater eBiz strides than the Internet, and are now capable of at least taking orders electronically.

That's got to be troubling news for online publishers, as marketers push their agencies to weed out labor-intensive, manual steps from their media buys, to make them more accurate and accountable than possible via paper-based trading.

Greg Smith, global systems director at Universal McCann and co-chair of the AAAA's media technology committee, said such paper processing and human input drives up buying costs and also creates greater margins of error in media buys.

"Why am I paying for this? Why do you have people re-keying in invoices?" Smith, said echoing the complaints from marketers, who themselves are under pressure from corporate management to weed out extraneous vendor costs.

But perhaps even more worrisome than the manpower issue is the fact that the Internet currently has the worst "discrepancy" rates--the percentage of advertising buys that do not run as originally ordered-- of any major medium.

The IAB's Fain confirmed that as much as 70 percent of online advertising buys are discrepant.

That's even worse than the newspaper industry, said Paul Caluori, director of ad management services for the AP, who nonetheless conceded that the print medium still has a way to go before it is ready to comply with the ad industry's eBiz demands.

The AAAA also unveiled plans for a so-called eBiz lab (MediaDailyNews, Jan. 16) to help various members of the media test and collaborate on tests to push developments forward. The association expects to update the industry on next steps during its annual Media Conference and Trade Show March 1-3 in Orlando.