Thursday, February 22, 2007

Ebay Media Marketplace

Some may be aware that Ebay jumped into the advertising media market last year by agreeing to build a marketplace site dedicated to buying and selling media space. It will be a facinating thing to watch since I believe this initiative could have the same impact on media buying as going to electronic settlements (The Big Bang on the LSE) had on the financial markets. That is more transparency, more transactions, higher margins and more effectiveness.

The media buying process is fairly rudimentary, inefficent and process bound. Staffed by under-paid and over worked ad reps/media buyers who cut their teeth in the business by executing media buys the marketplace has been ripe for change for many years. Curiously, it is not the media venues (networks) who are avidly pushing this concept rather it is some high profile and powerful advertisers who see an opportunity to increase their reach and effectiveness while at the same time paying a market driven price for the space.

MediaPost describes what the first version (beta) version of this product will do:

A copy of a document detailing the beta version that's being circulated for review reveals just how detailed and thorough the system that eBay has developed is. The exchange can go in either direction, where a marketer submits an RFP for a network to respond to, or a network posts inventory out for sale.

A buyer's RFP allows it to request that a network offer it a deal based on desired GRPs or budget it has to spend. The buyer can also request preferences, such as a primary and secondary demographic target; length of spots it wants to air; programming genres it is willing to run in; flight dates; and dayparts it would
air in. Requests can even extend to offerings such as product placement,
corollary Web placement or billboards.

It is a little jargony but esentially the system will automate what is currently done via phone, fax and email with several potential 'networks' all at the same time. The media rep has to gather and analyse what is available from the multitude of available space, pick the right mix and then get back on the phone and do the deal. This system has the potential to inventory all available media space, with associated demographic and Gross Rating Point info, potential ad conflicts, etc. and enable a media buyer to create an appropriate plan that meets their goals and budget. Once the 'RFP' has been created by the media buyer they offer it to the market (networks) for negotiation/bidding.

Selected networks could then respond with an offer indicating GRPs and CPMs it
would go with, as well as the number of ad units and other benefits (product
placement, Web presence, etc.) it is willing to offer.

The program is very much in its infancy and will not replace any complex or first run (upfront) media buying that generally require one-to-one negotiation. Nevertheless, a considerable amount of media spending is made day-to-day across a wide array of outlets (scatter) and this Ebay led marketplace has the potential to create significant efficiencies and better ad buys for advertisers.

1 comment:

Anonymous said...

The questions are, will sellers really want to allow buyers to drive their prices down so low that they won't profit and what media buyer has time to wait around to see if they've won a bid? Buyers and sellers have a better chance at success with Pre-Discounted media like they have on