EBay And Film Fires (Some Thoughts On Auction Media)

Here's a little-known story from the Golden Age of Television.

Sometime in the 1950s, a media buyer locks in an ad placement with a TV network. In the contract for the deal, the TV network also puts in a "make-good" clause that, if uncontrollable events prevent the ad from airing on schedule, the network will run it in that same time slot, the following week.

Before air time, a snag hits. The network tells the advertiser that there's been a fire in the film library. The ad reel has been destroyed. Because of the make-good clause, the network will run the ad on the same time slot, a week later; the advertiser just needs to supply a new reel. And indeed, the ad does go on -- one week late.

For a while, those fires were fairly common. But at some point in television history, media buyers caught on that the fires were fake (film libraries aren't all that flammable). What really happened was that the networks sold the advertiser's slot to a higher bidder, and invented the fire story to hide the breach of contract.



While the fire story may have fallen by the wayside, TV, radio, and all types of networks still make use of "make-goods" to help them liberally interpret their "locked-in" ad deals. That's not to say that there's no such thing as a locked-in ad buy; but traditional media buying is still a very uncertain place. There's a constant risk of paying for one ad slot, but getting bumped to a less prominent one.

That uncertainty is worth re-examining, as eBay follows Google into the auction-based radio ad business, Oxygen joins eBay's Online Media Exchange for TV and other traditional ad buys, and, over the past many months, auction-based media spills out far beyond search. It's that uncertainty that the new online media auctions are looking to fix -- but in a different way than you might think.

To understand how auction media provides certainty, it's worth first realizing how little media auctions actually change anything. In traditional media buying, larger bidders still preempt smaller bidders' ad buys; since auction networks invite advertisers to outbid each other, auction media isn't so different. In both systems, you really can't be certain that the ad spot you wanted to buy is the one you'll end up with, because someone else can always pay more to take your spot.

But even as auction media fails to solve an old problem, Google, eBay, and a handful of other players are betting that advertisers will leave traditional media networks and shift to auction-based advertising. Indeed, advertisers seem to be following that lead, and even leading the charge; remember that it was advertisers who asked eBay to create the Online Media Exchange to begin with.

The draw here, I think, is what you might call consistent inconsistency. In auction-based media, the networks are straightforward about how volatile they really are, simply by making it known that they operate as auctions. Advertisers know that auctions are unpredictable, and they can plan against that volatility by hiring auction media specialists (like search teams). By being straightforward about unpredictability, auction-based media helps advertisers actually manage that unpredictability better.

In the traditional media-buying model, by contrast, advertisers face far more unpredictability than the networks would let on -- but not enough unpredictability to merit specialists along the lines of search experts. Within traditional media buying practices, the advertiser is caught in a system that's just consistent enough to prevent predictable planning.

Thus, ironically, auction media takes away predictability in ad buys, while providing more control. And ultimately, it's that control which provides value to advertisers -- which is why advertisers will continue to flock to auction-based media.

What does that mean for those of us in the search business? It means two things.

First, it means that we'll be uniquely positioned to help our clients manage auctions in many more channels than just search alone. We've been managing auction media since auction media began; our experience places us head-and-shoulders above other industries in auction advertising of all stripes.

Second, it means we'll be called upon to raise the bar on client education and hand-holding. The only way advertisers will gain the control they're seeking from auctions is if they understand the media buying choices that they make. And the only way they'll understand those choices is if the experts guide them. We are those experts.

Which is why, as the auction media experts, we in search marketing hold a unique responsibility in leading clients through the next phase of media evolution. I know we'll lead them well.

(Thanks to my colleague Kevin Lee for the fire-in-the-library story, which he heard from a true media-buying veteran. If you have similar tales of network double-dealings, I'm collecting -- please post your stories to the blog below, or e-mail me at

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