Commentary
Tech Guru Warns Media EBiz Could Go To eBay
- by March 1, 2006
That was the warning sounded Wednesday during a panel discussion entitled "eBiz for Media Report: Small Steps Lead to Success," at the American Association of Advertising Agencies' annual Media Conference and Trade Show here.
Panel participants also warned that although progress has been made in creating ways to conduct electronic media transactions, it hasn't been enough to satisfy the pressing needs of agencies and advertisers to cut costs associated with the process.
Greg Smith, CIO of McCann Worldgroup, led the discussion. In his remarks, Smith reviewed the industry's goal of creating new electronic systems to decrease the superfluous amount of paperwork currently associated with media buys and to create a more orderly, standardized system that would cut down on the number of errors that plague the current systems.
Smith also issued an ominous prediction about what might happen if a workable solution is not developed sooner rather than later.
"If we don't do this, things like the online selling of media on eBay will happen," he said.
Smith was referring to a meeting between the popular online auction service and an influential committee of the Association of National Advertisers in January in which eBay was invited to pitch ideas for building an electronic trading system for buying and selling media.
That meeting followed an initiative proposed by DaimlerChrysler Director of Marketing Communications Julie Roehm during the ANA's March 2005 Television Advertising Forum in New York: the creation of a "Nasdaq-like" system that would create an open and transparent marketplace for trading advertising inventory. However, Roehm's proposal differs from eBiz in that it seeks to create a so-called open market structure, in which all of the information between buyers and sellers is transparent.
Despite his warning, Smith praised the progress some companies have made in the past year and said certain sectors have enjoyed more success than others. For example, he reported that one major agency told him that in February 2005, only 25 percent of all its spot radio invoices were handled electronically, but that the number had jumped dramatically to 53 percent in February 2006.
However, not all panelists were as sanguine as Smith.
Kathy Crawford, president of local broadcast for MindShare, said that although some progress had been made, existing systems were still error-prone. She said she was still "living in terror" about how to handle many transactions, especially in the area of emerging media.
She made her remarks right after David Alstadter of Microsoft outlined a brave new world in which consumers get all their information and entertainment from a multitude of digital and electronic devices that deliver messages in a pattern of what he called "seamless integration."
After hearing that, Crawford pointed out that the industry was already suffering from an 85 percent discrepancy rate, but with that much new technology, "we're headed for 100 percent" if solutions are not found.
The most optimistic member of the panel was Marisa Kabasinskas, a principal at 4 Strong Consulting who runs the eBiz initiative for the AAAA.
"This is a doable thing," she told a packed room of media executives on the opening day of the conference. "There are many other industries that conduct business electronically that are more complicated than the advertising industry." She predicted that in the next two years "we will have success in some media and we will have two-way transactions."
