CONTROL ISSUE SLOWS CHANGE

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So far, agency media buyers seem happy with AdValue Network, one of three initiatives electronically connecting their shops with sellers and station reps.

But reps are less than thrilled with their future in AdValue Network and plan to introduce alternates.

AdValue Network is designed to offer spot TV buyers maximum flexibility. As a result, it enables agencies to place contracts directly through stations-and bypass spot sales reps.

"When [AdValue Network] first shared their design with the ad community, they didn't even have reps on their schematic. That got the attention of the reps and motivated them to come up with their own plan," says one major rep firm executive.

Facing this scenario, the spot rep business is developing two separate electronic data interchange initiatives: Katz Television's Katz initiative and the Direct Agency Rep Exchange system, a joint venture of Donovan Data and Jefferson-Pilot Data Systems.

Dare, in theory, would seem an ideal meeting ground for the spot broadcast industry, because Donovan represents the majority of ad agency media departments and Jefferson-Pilot Data Systems handles the back office for a significant number of TV stations.

The problem with Dare, as well as Katz, is it doesn't let agencies go direct to TV stations.

"Katz and Dare have said they don't want agencies to go direct. Their goal is that by electronically advancing the process, they would be able to convince clients not to go direct," says Bonita LeFlore, senior VP-director of local broadcast at N W Ayer, New York.

As these systems are being developed, reps have waged a campaign to dissuade agencies from AdValue Network, suggesting the system's goal ultimately may be to control all financial data between stations and agencies.

"There is some concern about the concentration of data that [AdValue Network] will have," says the rep. "They're talking about a system that would have one computer residence holding the exact cost structures, the exact schedules and anything else you'd want to know about any given spot buy. That's pretty awesome."

The rep community and some agencies also wonder whether AdValue doesn't plan to expand that data management system into a spot trading system, which would give AdValue even greater control over the market.

"Some agencies will see that in some ways as getting shackled," says Marylouise White-Petteruti, VP-director of media systems, Leo Burnett USA, Chicago. "They have to go through [AdValue Network] to get the data."

"The real issue is that agencies, the stations and the reps own that data, and it's not supposed to be used for any other purposes," says the rep.

Dave Graves, president of AdValue Media Technologies, which markets AdValue Network, doubts the system could be that powerful.

"It's very unusual for one company to gain that kind of market share in that industry," he says, noting that the travel industry has several computerized reservation systems. "It's very hard to see why that would happen. I don't know why anyone would expect that."

Despite whatever concerns buyers have about AdValue Network, the system offers them one feature that's missing from Katz and Dare. These two systems prevent stations from doing business directly with stations-an action some clients request, Ms. LeFlore says.

Agencies don't necessarily buy spot directly through stations because they think they get better deals, she says, but because certain clients perceive it to be a better way of doing business.

"I do not think the majority of agencies would go direct unless it is a client dictate," because buying direct from many stations is labor intensive, says Ms. LeFlore.

"The expectation is that if we can make it easier to do business with us, we are more likely to get more business," admits Tom Olson, president of Katz Television.

But Ms. LeFlore says that probably won't be enough to satisfy some clients: "The rationale from clients is not that they can get something faster, it's that they are actually in the market talking to stations."

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