EBay Ad Auction Hits Snag

NEW YORK Plans by a group of key advertisers and eBay to launch an auction system for buying and selling national TV ads hit a major snag today when the Cabletelevision Advertising Bureau indicated that its members, including most of the country’s cable networks, would not participate in the auction, citing the system’s shortcomings.

Senior CAB and cable network executives have tested and evaluated the system, engineered by eBay and backed by advertisers including Home Depot, Toyota and Microsoft and their media agencies, over the past month.

CAB president Sean Cunningham said in a statement that the system had several problems. “Throughout our review it became apparent that the Media Exchange was too narrow an application, had clear connectivity issues related to cable’s emerging end-to-end e-business platforms, and lacked the provisions necessary for capturing critical strategic and idea-driven intelligence during a buy,” he said.

Cunningham also noted that the media agency community is divided on the feasibility of the system. “The refusal by major members of the agency community to consider this interface reinforced our conclusion that ending our participation was the correct decision for our members and their advertising clients,” said Cunningham.

One agency executive strongly opposed to the service is Starcom CEO John Muszynski, who made his feelings known at the Association of National Advertisers TV Forum in New York three weeks ago. He told attendees he believed that auctions like eBay would “commoditize” the buying and selling process and were a “waste of time.”

What happens now to the proposed system is unclear. The system’s backers had targeted cable networks to be the participating sellers, as the national broadcast networks had made it clear they were not interested in participating, largely because of the commoditization issue cited by Muszynski. In fact, at the same ANA meeting, ABC Sales president Mike Shaw confirmed that was ABC’s position.

Steering committee members overseeing the eBay auction development process were not immediately available for comment.

The steering committee overseeing the development of the eBay exchange issued a statement saying the members were “disappointed” in the CAB’s decision. “It is evident that this is a very active marketplace and the idea of media exchanges is gaining momentum,” eBay said. “We are still bullish about the system that has been produced.”