• by Joe Mandese  @mp_joemandese, June 6, 2007

In a move that could have a profound impact on the way radio advertising time - and potentially other media - are bought and sold, online auction giant eBay today will begin offering advertisers and agencies the ability to bid for radio advertising time on most of the nation's radio stations. The plan, which was unveiled Tuesday, represents an alliance with Bid4Spot.com, a media auctioning site specializing in broadcast avails, and puts eBay in direct competition with Google's AdWords for radio initiative, as the two online giants expand into the traditional media marketplace.

The radio auction system, which includes inventory on most of the top-ranked stations, including those owned by broadcast giant Clear Channel Communications, is also an important point of traction for eBay's fledgling Media Marketplace, which was launched last year with support from major national advertisers, but which has met with resistance from major television networks refusing to participate.

Recently, women's oriented network Oxygen, broke ranks with the rest of the cable TV industry, agreeing to become the first cable network to make its ad inventory available on the eBay Media Marketplace. That move comes in defiance of the Cabletelevision Advertising Bureau, which has taken a strong position against the eBay initiative, for fear that it would commoditize cable advertising buys.

The CAB led boycott of the eBay Media Marketplace came as a Madison Avenue task force of major national advertisers and big media buying shops called for a test for buying national TV time via the eBay system. That test, which is still planned for this year, was the culmination of a call for an open market system akin to Wall Street's Nasdaq market exchange that big marketers and agencies could use to buy advertising inventory. The concept was first championed by controversial marketing executive Julie Roehm when she was an executive with DaimlerChrysler during the Association of National Advertisers' 2006 Television Advertising Forum, and was followed by a series of pitches from eBay, Google and other companies to provide a market structure to test the system.

The task force ultimately opted to use eBay's system, but has had little success convincing TV networks to participate. Over the past year, top media agency executives such as Carat's Ray Warren and former PHD chief Steve Grubbs have worked hard to convince TV outlets that the system would not commoditize their inventory, but would simply make it easier to buy and sell. Instead of focusing on the kind of premium TV inventory normally sold in the traditional upfront and scatter markets, the task force has suggested that the eBay Media Marketplace might be the ideal system for transacting buys for the flood of digital tier inventory that is expected to open up as the nation's broadcasters move to digital spectrum.

Aside from fears about commoditization, sellers have expressed concerns about the fees charged by eBay for handling media buys. According to the eBay Media Marketplace agreement, fees are paid by sellers only and range from 2.0% of gross sales for buys with a gross value under $250,000 to 0.5% of gross sales for media buys valued more than $10 million.