IQ News: Follow the Money – In Web sales, real buying power remains elusive.

By Laura Rich

It’s a confusing time for sellers of that new commodity, Web media space. Armed with banners and pixel inventory galore, they knock on the doors of ad agencies’ dedicated new media units–only to be redirected to TV or print buyers who control most of the placement of media dollars for clients. In the Web medium’s early days, many of its buyers are more consultants than cash machines, studying the Web but not actually spending on it. Until clients set aside significant budgets for the Web, interactive publishers must turn to other buyers for dollars.

‘As a seller, I have no idea who to go to anymore,’ cries Susan Berkowitz, advertising director at New York-based The Globe, a college-oriented chat site. According to several estimates, Web ad spending totaled anywhere from $267 million to $300 million or more in 1996. Yet even those smallish figures overstate the real dollars allocated to Web buys, since many interactive campaigns are done on a barter or add-on basis. So finding the few interactive buyers who control actual dollars is the current needle in the Web haystack.

Adding further to the confusion, some big advertisers who have begun spending on the Web prefer to bypass their agencies’ new media units in favor of their established media shops, which can leverage one medium’s budget in return for Web space. ‘I’d find out secondhand that our cable people would be spending our budget,’ recalls Peter Maluso, media director at i-traffic, of his days as a new media buyer at DeWitt Media. Although he repped Web clients such as The Discovery Channel and BMW, Maluso was often frustrated when media companies would extract dollars for a Web program out of other, non-interactive buyers. Says Maluso, ‘it makes you wonder if clients are aware their deals are cut by experts in other areas.’

For now, clients are dictating how the budding medium will be handled within an agency. Some prefer their agencies make Web buys tied to spending through a traditional media schedule. On the creative and production side, most clients want to coordinate the look and feel of their image across all media and to post their Web site address on non-interactive media campaigns.

That crossover motive, while understandable, sets in motion the conflict over who controls the new media buy. ‘Clients don’t see it as added-value, but when you spend large dollars on a (television) network, you expect at least consideration on the Web,’ observes Sean Finnegan, interactive media supervisor at Zenith Media, which boasts clients such as Bell Atlantic and General Mills. That directive can leave Finnegan without much authority over new media spending on some accounts. ‘I have many clients with interactive-only budgets,’ he insists. When the buy does come in through another department, Finnegan is called in to ‘do an evaluation as to whether (the proposal) is fitting.’

This isn’t always the case. In one program with Columbia Pictures, USA Networks negotiated an extensive package that included an on-air schedule, a location-based promotion and behind-the-scenes programming support. The deal also had a Web component, on USA’s Dominion site. Ellen Kaye, vice president of USA Networks Enterprises, says the network worked with the studio and McCann-Erickson, Columbia’s agency of record, on the deal; McCann Interactive was never involved.

Turner Broadcasting Sales executives would call this type of media bundling a sign of the times. ‘Turner has a long history of successfully selling ancillary products,’ says Richy Glassberg, general manager of Turner Interactive Marketing and Sales, which oversees ad sales for CNN Interactive. Glassberg cites the Airport Channel and other Turner products as the proper approach to non-traditional media sales: arm sellers with an array of media opportunities and hit buyers and clients on all fronts.

The goal is ‘one-stop shopping,’ Glassberg explains. ‘We really show the lead sales person how it’s to their advantage’ to pitch new media, notes Glassberg. ‘Our regular lead person can’t spend time with (a new media buyer), so my group will call on (that buyer).’ That tactic means a new media rep often will supply a lead account executive with collateral and explain the medium to buyers, but not necessarily negotiate with them.

Sellers can also come up against internal turf battles at agencies, such as a colossal one between True North and Modem Media staffers, mainly in the New York office. Joe Schreiber, project manager at TN Technologies, Modem’s new parent, has been assigned the task of molding the recently merged companies into an independent unit, responsible for its own client relationships. He’s meeting much resistance, according to new media sources. ‘Clients are still controlled by the TN side,’ says one media seller. ‘Schreiber can’t even get into meetings with the traditional people.’ So sellers don’t expect the New York office of TN Technologies to offer budgets for TN clients such as Nabisco, and most of Modem’s once robust staff has departed for other new media opportunities.

In addition to power struggles, agency new media units are also up against potential revenue shortfalls. When buyers are excluded from certain deals, they can lose out on commissions earned for placement. Dave Dowling, media director at, the online buying and planning unit spun off from Grey Interactive, says that buyers at MediaCom, Grey Advertising’s international buying unit, typically enlist the support of whenever the Web is involved. If they aren’t contacted, however, the group doesn’t get compensated.

‘The key people (at MediaCom) have an understanding of what we’re all about,’ Dowling says. But he concedes that those actually doing the negotiating are often busy with day-to-day responsibilities to their main medium. At and other agency new media units, interactive buyers keep the same long hours familiar to the media buying industry, only they spend more time on research and planning for clients than on actual deals and contracts.

Corey Friedman, vice president of advertising at Hearst HomeArts, contends the relatively few ad dollars at stake in new media is forcing the current overlap with traditional media sales. ‘HomeArts has its own sales staff, but we do collaborate’ with other Hearst sales teams, he notes. He echoes Zenith’s Finnegan: ‘If you’re going out and selling pages for thousands and thousands of dollars, and (advertisers) are begging for it for free, we can put together a package. All we want to do is see this (medium) grow.’

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