EBay Powers Online Ad Exchange

NEW YORK A group of leading marketers, agencies and cable networks have joined with eBay to test an online auction-style exchange that lets users buy and sell TV ads.

So far, about a dozen marketers have signed on. Toyota’s Lexus and Wal-Mart have confirmed their participation, and sources identified other participants as Brown-Forman, Home Depot, Intel, Hewlett-Packard and Microsoft.

Those companies will initially spend about $50 million combined to purchase ads on the exchange, according to sources. More marketers are expected to join in short order as word of the project spreads, with total spending ultimately topping $100 million.

The electronic platform, framework and technology are supplied and managed by eBay. A Web site (www.admarketpilot.com) has been established for marketers, media companies and agencies to participate.

Logistics and ground rules have yet to be refined, said Ann Bybee, corporate manager of advertising and product strategy at Lexus. A steering committee will meet in September at eBay’s headquarters to work out operational details, she said.

Bybee stressed that the new system, known as the e-Media Exchange, is not designed as a replacement for the annual upfront marketplace in which TV advertisers buy 75 percent of their ads for the upcoming season. Rather, the exchange is positioned as an alternative to the so-called scatter market, where companies spend the remaining 25 percent of their budgets.

The system goes live early next year.

“There is a lot of new technology that we should be looking at,” Bybee said. “We have had a process in place for many years, and we need to see if there is a better way to do it, to achieve better efficiencies.”

Julie Roehm first suggested such an exchange in 2005, when she was a marketing executive at Chrysler. (Roehm has since moved to Wal-Mart, where she is overseeing the company’s current agency review.)

The Association of National Advertisers and the American Association of Advertising Agencies have endorsed the project.

“We must address the changing media landscape and determine the opportunities generated by the rapid advancements in technology,” said ANA president Bob Liodice.

Agency participants include Interpublic Group’s Magna Global, Omnicom Group’s PHD, Aegis Group’s Carat and Publicis Groupe’s ZenithOptimedia.

“We have to experiment to see if some efficiencies can be created, not just in pricing, but also in backroom operations and length of negotiations,” said Magna chairman Bill Cella.

The major broadcast networks are not participating. It was not immediately clear which cable properties are involved, although Joe Abruzzese, president of advertising sales at Discovery Networks, is a member of the exchange’s steering committee. He could not be reached for comment.