December Beta Test Set For E-Media Exchange

Advertisers and agencies got their first look last week at the completed system behind eBay's e-Media Exchange, the proposed online auction service for buying and selling TV ads.The challenge now is to get cable networks to participate in the process. (The exchange will focus on national cable transactions to start.) Bill Cella, vice chairman, DraftFCB Group, whose sibling media shop Initiative handles Home Depot, a supporter of the system, said this would happen only after eBay conducts the system's first live online beta test, scheduled for next month. Announced in August, the exchange was originally scheduled to be up and running in time to buy and sell ads for the first-quarter scatter marketplace. Now its supporters—which also include Wal-Mart, Toyota and their agencies—say it will be ready to process ad transactions in time for the second-quarter 2007 marketplace.Still, the advertisers supporting the exchange say they are eager to get under way and have committed a minimum $50 million to purchase ads with the proposed system in next year's scatter market. It's not intended to replace the upfront market, where about 50 percent of cable inventory and 75 percent of broadcast network ads are sold each spring for the upcoming new season. Meanwhile, cable networks are taking a wait-and-see approach, said Sean Cunningham, president of the Cabletelevision Advertising Bureau. Cunningham said he has recommended that cable networks take a look at a demonstration. "That's the only level of commitment that anyone is comfortable with so far," he said. "We'd like to get our members in a room and see what it looks like. ... Is there an automated bid-ask product that's going to be advantageous to clients, sellers and buyers? I think that is still an open question."But advertisers say they're confident that sellers will participate once they've seen the demonstration. "We think this system will offer sellers the opportunity to make sales they weren't aware of and have greater access to clients that maybe they didn't have before," said one advertiser involved in the project. The proposed system would allow buyers to submit budgets for packages of ad time they want to buy, which sellers would then bid on in a reverse-auction process. Only the buyer would know the identities of all bidders, although sellers would be made aware of the winning bid. Under discussion is a method for sellers to also submit packages of time on which buyers could bid. "A scatter buy can take a week to negotiate," Cella said. With an auction, the time might be reduced to a matter of days. And while sellers hate to admit it, some buys are commodity purchases—pure tonnage that clients feel they need to spend for a brand in the market. "The auction system is perfect for that kind of deal, freeing up resources for bigger, more important ad programs that require depth and manpower," said one marketer involved in the Exchange. While the e-Media Exchange will initially focus on cable, other auction-based systems serve other media. Google, for example, sells most of its online ads with an auction system, and has announced plans for auctioned systems to sell newspaper and radio ads. Other companies, such as Bid4Spots, a subsidiary of Newmark Advertising, have been auctioning off radio ads for a year or more.But bigger ad shops have avoided buying local ads via auction because much of the inventory is remnant time sold at the last minute. "Nothing will replace destination-specific buys," said Bid4Spots CEO Dave Newmark.Kathy Crawford, president, local broadcast at MindShare, said her agency doesn't buy locally via auction yet. "I think there will be a place for it," she said. "I'm not sure if the current iteration is the way it will end up."

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December Beta Test Set For E-Media Exchange

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