• by David Goetzl  @dgoetzl, April 12, 2007

While the proposed eBay-enabled system where networks would compete for marketers' TV dollars appears moribund, at least one of its supporters is already conducting its own reverse auctions. Twice, Home Depot has successfully put budgets out for bid with networks competing to offer the lowest price to win the business, according to the company's CMO.

The executive, Roger Adams, said the marketer has identified campaigns recently that it needed to run where it simply was seeking as many GRPs as possible at the lowest price. Aiming simply for tonnage and largely unconcerned about the specifics of the broadcast environment, Home Depot posted a budget, and several networks engaged in the reverse auctions to offer the most attractive price--and both times HD had a deal it was satisfied with.

So much so that Adams, HD's senior vice president-chief marketing officer, said the company plans to do it again. He cited the reverse auction as one buying tactic HD employs during a keynote address at a pre-upfront event Wednesday in New York sponsored by Advertising Age/Television Week--and then elaborated on the concept later.

HD's reverse auctions, of course, were both held outside the upfront. Only HD and the winning network knew the details of the deal, while the other network participants were left in the dark. The "private" nature of the single-marketer auction differs from the more transparent aspects of the proposed eBay system.

In addition to HD, Allstate has also conducted reverse auctions for targeted, one-off campaigns.

While Adams did not identify the networks that bid on HD's budgets, their willingness to engage the retailer in the process raises some questions as to whether they may be saying one thing publicly and then doing another to grab dollars. Adams hinted that some of the participants were broadcast networks.

Broadcast executives, particularly at ABC and NBC, have railed against an auction-style system for dealing TV time on the grounds that it devalues their product by commoditizing it. Their condemnation came when discussing the proposed eBay Media Marketplace, the online buying-selling system backed by several top agency executives and a cadre of marketers, including HD.

Cable networks have also soured on the concept--as their trade group, the Cabletelevision Advertising Bureau, said its members would not participate in the eBay system last week. Proponents of the system had sought to sign up several cable networks to engage in a test of an auction-style exchange.

CAB's refusal to participate came in a sternly worded announcement last week that caught the agency executives and marketers backing the eBay Media Marketplace off guard. Adams said Wednesday "they had every opportunity to get involved in a dialogue," but then declined to attend a meeting where both sides could work out their differences.

Still, Adams said HD and others would continue to look for cable networks willing to break with the CAB leadership, or others that don't belong to the group to test the eBay-powered system. He said HD buys about a dozen cable networks currently, and an outside network's willingness to try reaching deals via the system could potentially vault it into HD's media planning discussions.

"If it's a network we're not advertising with, it would be a great way to get on our radar screen," he said.

In addition to reverse auctions, HD is engaging in other non-traditional tactics. This year, the retailer executed its cable upfront on a calendar basis, where it made its deals in January that covered the ensuing 12 months, rather than making them during the typical spring-summer period. Adams acknowledged that such timing may be less than ideal for sellers.

Many members of the ANA have urged all networks--notably broadcasters--to shift to a calendar upfront to put the buying cycle more in line with their company-wide planning processes.

One of the reasons HD has championed the eBay system is the potential to bring more transparency to pricing in the ad market. And in his address Wednesday, Adams expressed dissatisfaction with the upfront due to issues with secrecy.

"There are issues of transparency," he said. "We don't know if we got a good deal until we talk with other people."

Adams also said HD made an upfront deal with NBC last year, where guarantees were based on audience engagement, and he will look to do more this spring with other networks. But he downplayed commercial ratings as a sign of that engagement.

He also called for the continuing evaluation of an upfront deal, proposing that each quarter the network and marketer review its effectiveness (perhaps with engagement metrics), then possibly alter pricing based on those results. Adams suggested that HD would be willing to renegotiate and pay more for something that is demonstrably working.