• by Ken Liebeskind , May 14, 2001

Buying online is commonplace among American industries, but it has been slow to come to media buying. Now, three top agency companies have banded together to develop an online media buying system that promises to streamline the way media is bought and sold.

Mediaport is the brainchild of Michael Lotito, former president of Initiative Media who is now CEO of Mediaport, a joint collaboration of the Interpublic Group, Omnicom Group and WPP Group. Together, these companies own agencies that represent half of the money spent on advertising in the U.S., according to Lotito. Among the agencies owned by these companies are McCann-Erickson (Interpublic), BBDO Worldwide (Omnicom) and J. Walter Thompson (WPP).

Mediaport, based in New York, was formed last month. It will take 18 months to build the product, which will be followed by tests. It will take two years before it can be used, Lotito says.

"We'll build a database that defines a media buy across all media types," he says. "It's not an exclusive closed system and it's not being put together to get lower rates, but to enable the current process of buying media."

He says the database will be a secure environment for buyers and sellers where each can attach applications. Information for a sale will be available online and both parties will be able to make changes online. When a deal is agreed upon, a button can be pushed to send it into a financial system that will be managed by companies like Donovan and Encoda. "Buys will match up and we won't have discrepancies," Lotito says.

Further details about the system weren't available, because it is still being developed.

Lotito says there is no system like it currently in use. "The business hasn't moved forward with the technology that's available," he says. He complains about the current media buying system, saying it's been sold the same way for 20 or 30 years. There are constant letters and faxes back and forth between buyers and sellers trying to arrange the specifics of each deal, such as the exact TV units being bought. "The top five media agencies process 400,000 invoices a year," he says.

"I learned that in order to make financial targets we need to reduce the amount of time and people it takes to make executive media buys. The only way to do it is through new technology. More than one company can manage it, so I went to Interpublic to bring in Omincom and WPP."

That's the way Mediaport was started. It remains to be seen how it will develop. Lotito says the three companies will work together, sharing personnel and elements from their media buying systems to develop the Mediaport system. Other advertising/marketing companies will be invited to join the venture.

- Ken Liebeskind may be reached at kenrunz@aol.com