GM analyzes plan to buy TV via Web

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General Motors Corp., the nation's top-spending advertiser, is considering a radical change in the way it purchases the $342 million worth of commercial time it buys annually on local TV stations.

The auto giant is in the preliminary stages of considering a plan to use the Internet to buy time on the stations, according to executives familiar with the discussions.

The concept would be part of gmtradexchange.com, the business-to-business Web site GM has set up for vendors to buy and sell goods and services. GM recently announced that the site eventually will become part of a mega-site with partners Ford Motor Co. and DaimlerChrysler Corp.

A number of ideas are under discussion at GM revolving around the ad-time issue. They range from using the Web to conduct paperless transactions with stations to having GM deal with stations directly, cutting out current buyer Local Communications Inc., a division of Interpublic Group of Cos. under Interpublic's McCann-Erickson, New York.

"This could be a way to cut out the middleman, which is LCI, and save a bundle on costs," said an executive at one GM agency.

However, another executive said that was the least likely scenario.

LCI ADDED VALUE

"What LCI really brings to the table is all the added value it negotiates on behalf of GM. And I think those are the kinds of things you have to do between two people that have a business relationship."

The first executive countered that value-added packages could be made part of an online-only transaction as well.

"This will most likely be fought out in a battle between those on the purchasing side at GM, who basically see purchasing TV time as yet another commodity, and those on the advertising and marketing side, who think that task needs to be more sophisticated," the executive said.

There are a number of sites that conduct auctions for TV ad time, and some GM managers think GMTradExchange.com could be an excellent vehicle for those transactions as well.

Furthermore, GM would like stations eventually to use the site to buy and sell new and old equipment.

"Consider this idea," said one of the executives familiar with the discussions. "Let's say GM has a deal with one or two TV stations in a city for most of its business. Maybe those stations can use the trade exchange and get favored GM rates for most of their supplies, ranging from paper clips to desks."

Mr. Ross is editor of Electronic Media.

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