eBay Practices What It Preaches, Places National Cable Buys Via Its Own Media Marketplace

EBay has banked on itself. The company developed the controversial online buying and selling system it wanted the industry to embrace. Now eBay is using the platform itself--closing several deals in the fourth-quarter scatter market and using that inventory for a holiday campaign.

EBay's own use of the system (the eBay Media Marketplace)--joining marketers such as Home Depot and Intel in purchasing national cable time--is notable on several fronts. One, it could blunt any criticism as to why eBay stood firmly behind the heavily criticized system's functionality, yet failed to use it for its own buying. Second, it means that a fourth agency group--OMD, which conducted the business for eBay--is now using the service.

Early agency backers of the Marketplace included Carat, Zenith, Interpublic media operations, such as Magna Global, and PHD. Although OMD is a sister Omnicom shop of PHD's, its executives did not take a public role supporting the system. Conversely, top executives at other agencies offered fierce opposition--notably Starcom's CEO John Muszynski, who labeled it "a waste of time," although fellow Publicis operation Zenith favored it. Group M's Rino Scanzoni also expressed opposition.



It's unclear whether OMD evaluated the system--which is still in test mode and only covers national cable on the TV side--on its own and then opted to experiment with it, or a dictate from eBay prompted its involvement. An eBay representative said: "We instructed OMD to utilize the Media Marketplace" for the 4Q cable buy.

An OMD representative declined comment.

For its part, the eBay representative said the company always intended to employ the Marketplace, and its use as a platform for its "Shop Victoriously" holiday effort was optimal. "We always planned to leverage the system, and this was the time that made the most sense," the representative said.

The eBay marketing team that oversaw the online buys operates separately from the technology group that developed the system. However, it is possible the tech side could have urged its counterparts to get involved.

It's unknown which networks OMD/eBay reached deals with via the system--where buyers float a detailed RFP, and cable networks can opt to submit potential offers. The value of the eBay deals is also uncertain.

EBay initially began floating RFPs some time this summer, a source said. The eBay representative declined comment.

Only two networks are known to have made deals via the system, Oxygen and TV One--both of which have inked agreements valued in the six-figure range.

The Media Marketplace looked to be a no-go in April--when the Cabletelevision Advertising Bureau, the trade group representing cable networks, said its membership would not participate on the sell-side. Part of its refusal, CAB chief Sean Cunningham said then, was based on a flawed functionality that failed to fulfill the system's mission. Cunningham said the CAB saw nothing indicating the Marketplace would make buying "either more effective or more efficient."

Furthermore, he charged that eBay, as an outsider, failed to understand basics of the sales process while crafting the system. The CAB chief called it "evidence of someone developing a system in eBay that, despite the best counsel of top buyers in the business, was just not getting the scope of this business in terms of both current and future practice."

Despite Cunningham's stated willingness to work with eBay to develop the system, some of the advertisers supporting the Marketplace--a group that also included Microsoft and HP--questioned how committed the CAB was to the system. Cable sales executives had indicated the system could reduce their inventory to a commodity, resulting in lower pricing.

EBay stood steadfast behind its work, and a beta version eventually launched. In July, Oxygen cut the first known deal with Interpublic's Universal McCann for its client Intel. The female-targeted Oxygen, a CAB member, broke rank with the trade group as it looked to use the system to develop new-business opportunities. Intel became a first-time advertiser. Oxygen's top sales executive said after the deal closed that the network had no issues with the Marketplace's functionality.

Oxygen's future in using the system could be clouded by NBC Universal's recent purchase of the network. NBCU and other operators of broadcast networks, as well as large cable fleets, have shown no interest in it.

But an Oxygen representative said that one of the network's "major selling points" to NBCU was how it did business. NBCU's continued evaluation in the coming months may not preclude any more Marketplace deal-making.

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