• by David Goetzl  @dgoetzl, Joe Mandese  @mp_joemandese, May 10, 2006

A group of big national advertisers and agency executives went public with a plan to test an ambitious online trading system for buying and selling media. The plan, which has been ruminating for months in the Association of National Advertisers' National Television Advertising Committee ( eBay Pitches eBiz: Big Advertisers Consider Online Media Auction Service, MediaDailyNews, Jan. 25) ) was pitched to financial and procurement executives of the nation's biggest advertisers Tuesday during the ANA's Financial Management Conference in Naples, FL, including a plan to fund the test with a $50 million budget. News of the pitch was first reported Tuesday on AdAge.com.

Details of that plan were not disclosed, but asked how the group came up with the size of the test budget one member of the committee, Carat Media Group Americas President Ray Warren, quipped, "$100 million felt like too much and $10 million felt like too little," according to a senior executive attending the presentation.

Other members of the committee include PHD USA CEO Steve Grubbs; executives at Interpublic's Magna Global unit; Microsoft Global Media Director Dave Grubb; Lexus Corporate Manager-Advertising, Brand and Product Strategy Ann Bybee; and Wal-Mart Senior Vice President-Marketing Communications Julie Roehm. Roehm, in fact, has been the catalyst for the initiative, first proposing the concept for a "Nasdaq" like media trading system during the ANA's 2005 Television Advertising Forum in New York more than a year ago, while she was as senior marketing executive at DaimlerChrysler.

The discussion took root and the ANA's TV committee formed a task force to meet with a variety of potential vendors for creating the trading system including Google and eBay, the latter of which presented a preliminary plan for creating the system at the meeting on Tuesday.

Members of the task force have been trying to position the effort as part of a broader base, but AdAge.com and ensuing coverage attributed it as a Wal-mart initiative. But the plan is not without controversy, as some of the largest national advertisers are opposed to the idea, and the ANA is not formally endorsing the pilot program, though it is a big proponent along with the American Association of Advertising Agencies for so-called "eBiz for Media" systems, and it plans to serve as a forum for discussing the idea through its committees and at forums like the Financial Management Conference.

"We will be doing a follow up survey of the people attending the conference to see how interested they are in doing this and we will circulate that to our members," Bill Duggan, executive vice president-committees at the ANA told MDN. During the presentation, eBay executive Howard Rosenberg showed a template for how an online marketplace might work. The system, which is ready to launch, would allow for an auction where a network could offer media placements and advertisers could bid for the time, or advertisers could place a proposal out for bid and networks could offer a matching media plan.

Task force members would like to launch the system as a pilot program, with as much as a $50 million fund during the 2006-07 broadcast season. It's unclear who would own and/or operate the system; it could be owned by an industry-supported company. The initiative is not expected to launch until the fall at the earliest. Next steps include the ANA's survey and the formation of a formal steering committee.

On the selling side, broadcast networks along with all television outlets will be given the chance to participate. "Everyone will be given an opportunity to engage," said Lou Schultz, Chairman-CEO of consulting firm LMS-Unlimited who has an advisory role in the initiative. "The reality is that probably traditional networks -- the broadcast networks -- will be reticent and the cable networks and other digital media will certainly consider doing this because it's in their best interest."

The effort is not the first time the ad industry has proposed the formation of an open market media trading system.

A flurry of such media trading portals were formed during the late 1990s, including some well capitalized and publicly traded companies. Most if not all have folded, though a new wave of media buying and selling portals appears to be underway. Prior to the dot-com bust in 2000 other big players tried to jump into the market, including Enron Corp, which formed Enron Media Services and got close to implementing some big advertising deals before its parent company unraveled in corporate scandal.

In 2000, one major advertiser, Pittsburgh-based food marketer Heinz, even conducted a live market trial for purchasing a portion of its network TV advertising buys via online auctioning service Freemarkets.com (now Ariba). While that trial--a so-called "reverse auction" in which sellers bid each other down until they arrive at the cheapest price for the buyer--was deemed a success by Heinz executives, the company is believed to have gotten a lot of heat from major media companies, and never repeated the experiment.