Spot Runner is unveiling its bid to bring greater efficiency to the TV ad buying process.
The Malibu Media Platform, under development for two years, promises to automate many of the functions currently done ad-hoc by media buyers and sellers. Spot Runner is initially targeting remnant inventory with the platform. It plans to later add spot buying. Company executives said the system could handle all types of TV ad transactions.
Malibu seeks to help match buyers and sellers by using an algorithm to find the best offer to fill available ad space. The Web platform does not include a blind auction. That would spook media companies worried that their inventories would be treated like commodities. It preserves most aspects of the traditional way the TV industry does business, with sellers retaining control of inventory and relationships and buyers keeping their clout.
"This is industry driven," said John Gentry, president of Spot Runner. "Our goal is to go after this transactional problem."
Spot Runner is not disclosing which agencies and media owners are using the platform. Gentry said the company would release details about the participants in January.
Spot Runner hopes its approach will gain favor with agencies and networks wary of the intentions of tech companies like Google and Microsoft. Unlike Google, Spot Runner doesn't plan to change the business model of TV advertising, only tweak the process to make it more efficient, less prone to error and better able to handle multiple data sources, Gentry said.
"I think there's a channel conflict issue Google or Microsoft has," he said.
Tracey Scheppach, innovations director at Starcom MediaVest, said Spot Runner's direction is part of an overall industry shift to use data from set-top boxes to show more relevant ads.
"This is validation of where the marketplace is going," she said.
The promise of buying efficiencies are less attractive, Scheppach said, since TV is already a very efficient industry in which a relatively small number of people move billions of dollars in transactions. Still, Gentry said the handcrafted way the industry does business results in unacceptable errors.
"It's mind-boggling to me that a spot doesn't run because someone missed a fax," he said.
The Los Angeles-based company, which is locked in legal wrangling with WPP Group, is looking to Malibu as its main effort after stumbling in its attempt to democratize the TV ad business by making it easy for small businesses to create and run campaigns. Malibu is focused on the largest advertisers and networks.
"Our mission hasn't changed," said Gentry. "It's been bringing technology to the traditional marketing business."
For the company, that has meant de-emphasizing its initial selling point that small businesses could come to its Web site and create TV commercials from stock creative, then craft a cheap media plan. Spot Runner shifted its focus to national franchise businesses, but ended up getting hit by the financial woes faced by key clients Cendant (owner of Century 21) and the Diamond Promotion Service. That segment of Spot Runner's business is now focused on national advertisers like StubHub and Nature's Way.
Scheppach said the company's media platform focus is more aligned with the needs of large advertisers, but as constructed now is "still really geared to direct-response advertisers."
WPP, which invested about $12 million in Spot Runner, sued the company in April, alleging it was a "pump and dump scheme." The suit was dismissed in September, but WPP subsequently refiled its complaint.
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