• by David L. Smith , March 7, 2003

In a rather quiet announcement last week, Interep Interactive announced that they are beginning new billing procedures introducing “all electronic invoicing and electronic tearsheets for all invoices.” I say that the announcement was quiet as the trade press did not pick this up at all. Back end financial issues are not very sexy. It is a lot more fun to talk about research tools, rich media, spam, spam, spam, spam and spam.

It has always been amazing to me that the media and marketing business is so antiquated when it come to computerization. Very few other companies on the Interactive media sell side have adopted policies like this. (Note to IAB and OPA, is this not on your agenda?) In addition, when we eventually take the next step and adopt honest to goodness EDI for financial aspects of the business, we will be among the last business categories to do so. And, as some of you are aware, marketing probably the last major segment of business to have a dashboard on the desktop at the senior level. Why is this so?

Our business lives and dies with creative. Agencies get hired and fired due to hot creative or lack thereof. There is a lot of attention in the research world to testing the viability and payout of various creative campaigns (in the offline world, the ratio of money spent for “day after recall” testing for creative FAR outreaches the money spent to verify media mix-in some companies it is literally 90% behind creative testing and 10% or less for media testing). And let’s face it; it is a lot more fun to spend time on the creative product than to do the hard work of defining the basis for putting the operations part of our business online. Sure, the really big shops have Donavan or some equivalent, but even these tools still do not include the Interactive business. And they are still experimenting or just talking about real EDI relative to the day-to-day schedules of TV and print.

Back to the electronic invoicing and POP in the Interactive world. The Interactive media business is tough from an operations standpoint. One has to access at least four different data points to even pay a bill. First is the actual IO or the housekeeping system that supports it. Then comes the invoice from the publisher or publisher representative/network. Then there are the numbers. Did the right number of impressions run (or whatever other parameter, clicks, etc.)? This information comes from the publisher, often separately from the invoice. But the agency generally relies on the information from their third party ad server (3PAS) for payment, so this is another data point that must be accessed. Lastly, there is the physical proof that the right ad ran in the right place. The 3PAS companies give you the chance to see which creative ran behind each impression level, but if you want to make sure that the creative ran in the right place, you usually have to go to the site and find it. Makes me tired just thinking about it. This is for every campaign.

The Interep solution is not a panacea. They are simply providing the industry with invoices in an excel spreadsheet which will be emailed along with actual shots of web pages in word or other format, depending on the type of banner, rich media, etc. Overture sends .pdf files for invoices (probably better than excel as they cannot be changed) and POP every month, as do business.com and Cheetah Mail, but this is not an industry trend and there is no standardized methodology. We do tens or hundreds of millions of dollars in Interactive spending, interface with the seller via email and RFP interface, log in our campaigns via 3PAS and get paper in the mail that needs to be assembled with all of the other data points to pay somebody.

We need more of what Interep is doing from the industry. And we need to progress all the way to a professional EDI system that hooks into housekeeping systems, 3PAS systems, etc.

We applaud Interep and Winstar for adopting this policy. They WILL get paid faster. First because we will get their complete package sooner and in a predictable format and second because you always do the easiest work first. Interep believes that they will speed payment by 7-10 days per invoice in using this method. Put that in your cash flow!

David L. Smith is President and CEO of Mediasmith, Inc.