The programmatic media-buying marketplace has long been a chicken-and-egg business -- as in, which came first? Without supply of premium inventory, demand will never rise from advertisers willing to pay for it. And without demand from advertisers willing to pay a premium, why would publishers contribute to the supply? To overcome that paradox, Interpublic’s Mediabrands unit has partnered with an impressive lineup of suppliers who are not chicken and definitely are not afraid to break a few eggs.
We’ve seen lineups like it before. Google trotted out some high-profile TV programmers when it launched Google TV Ads. It’s list of partners even included one of Interpublic’s, A&E Networks. But Google -- and others, including Microsoft -- ultimately failed because they couldn’t convince a critical mass of supply to trade on their exchanges. As impressive as the initial list of players on Interpublic’s Magna Consortium are -- AOL, A&E, Cablevision, Clear Channel and Tribune -- it can’t stop there. It has to prove that automated media-buying can scale for all types of media, and all types of media suppliers.
“Hey Interpublic clients, hope you like your ads running in crap,” MediaPost member screen-named Darrin Stephens commented on our coverage of the news this morning. It was a cheap and obvious shot, but maybe not an illegitimate one, because the success of the programmatic marketplace will ultimately depend on its ability to attract enough premium supply to attract a critical mass of advertising dollars that will make the marketplace sustainable. Otherwise, it will always be perceived the way online’s RTB marketplace is frequently referred to as: a race-to-bottom.
Yes, all of the suppliers participating in the Magna Consortium have remnant inventory that they sell through “secondary markets,” whether you call them RTB, direct response, reciprocal trade, or whatever mechanism media companies use to liquidate unsold inventory. But they also have ample supplies of the good stuff that commands top advertising dollar too, and the difference between those two silos may be a simple problem that technology can help solve: liquidity. Create that, and all boats will rise.