EBay Faces Hurdles With Ad Auctions

LAS VEGAS Engineers at eBay are putting the final touches on a media auction system designed to allow buyers of national TV ad time to bid for slots via the Internet.

The service will launch “within a few weeks,” said Howard Rosenberg, the online auction house’s director of private marketplaces. The timetable assumes that sellers, specifically cable networks, agree to participate. So far, they haven’t.

The auction system “went live” with its Web site Wednesday, allowing potential participants to register for the service.

A discussion about the controversial system was the highlight of the first day of panel sessions at the American Association of Advertising Agencies Media Conference here. An estimated 500 attendees jammed into a packed hall at the Venetian hotel for the latest details on the eBay offering.

But while a handful of blue-chip advertisers including Home Depot, Toyota and Microsoft and their media agencies remain enthusiastic, so far no media sellers have signed up to participate.

As Aegis Group’s Carat Media Americas president Ray Warren put it, “It’s like one hand clapping,” until some sellers commit so that transactions can be made. “But it is the hand with the money,” he said.

Warren is one of four agency executives on the steering committee overseeing the development of the system, along with Steve Grubbs, North American CEO, Omnicom’s PHD; Peggy Green, president, broadcast and entertainment, Publicis Groupe’s Zenith Media; and Bill Cella, vice chairman, IPG’s DraftFCB.

The system will offer two ways to transact ads. Buyers can issue an electronic RFP, detailing the type of buy they want to make, including the specifics about total dollars available, demographics, daypart allocations and other details.

Buyers also have the option of adding written instructions and conditions, and can then evaluate seller responses and choose among them.

There is a separate process allowing sellers to make time available, though Rosenberg did not provide details.

Buyers are currently testing the site, and eBay is expected to make a presentation to a cable network executives next week at a gathering coordinated by the industry group CAB.

Some sellers, including the major networks, have rejected the process as something that would commoditize their inventory. The buyers and marketers are targeting cable networks to come on board as the first sellers in the process.

Grubbs of PHD stressed the system is now only in test phase. “It isn’t the anti-Christ that some have made it out to be,” he said. “It’s not about revising the upfront. This is an adjunct, not a replacement, to the sales process.”

Christi Korzekwa, senior director of media at Home Depot, said the system could help marketers be more efficient in the way they spend some of their ad dollars. “There’s not a person in this room who hasn’t been asked to do more for less,” by their higher-ups, she said.

Carat’s Warren said the eBay system could help buyers and sellers by providing a “faster, more efficient, more accurate and better communications trail” for some ad transactions. “To me it’s a no-brainer.”