BofA auctions off media-buying acc't

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Bank of America is conducting a reverse online auction to choose an agency for its $160 million media buying and planning account, a controversial move that allows shops to view rival bids for the business-and undercut them.

"It's like shopping for a media agency on eBay," said a media executive familiar with the review. "It appears the lowest bidder will take it all."

According to executives with knowledge of the process, in about two weeks at a prearranged date and time, finalists in the ongoing review will log on to a secure Web site and pitch costs for purchasing broadcast, print, out-of-home and online media for Bank of America. The site also will request bids on agency compensation.

In what appears to be a first, finalists will get a chance to continually reduce their bids online. One executive said the site will allow participants to see the proposals of other agencies in real time, without the names of the shops being identified, so that all participants are aware of the lowest and highest bids. Based on this, participants will be allowed to adjust their bids.

Another executive described the site differently, saying that after an agency puts in a bid, the site tells them where they rank rather than what their competitors are bidding. Agencies then could adjust their ranking with alternative bids.

The electronic bidding is expected to take place before a final face-to-face presentation with the client.

A Bank of America spokesman declined to discuss the review.

The review began in May when the bank sent out requests for proposals to a large number of agencies. In June, the list was narrowed to Aegis Group's Carat; Bcom3 Group's Starcom; Interpublic Group of Cos.' Initiative Media North America, the incumbent media buyer; Omnicom Group's PHD; and Zenith Media, owned jointly by Publicis Groupe and Cordiant Communications Group. According to executives with knowledge of the review, each shop has been given a Web-site address, secure password and date and time to log on to make the pitch.

"They should do the entire upfront this way. Could you imagine it?" joked one media shop executive.

The idea is not so far fetched. Procurement executives at major marketers are playing an increasing role in the purchase of marketing services, and Advertising Age has learned that at least one top advertiser has quietly explored whether it could buy media through reverse online auctions.

"You can see that [the Bank of America online pitch] wasn't developed by the marketing department," said an executive whose shop is in the review. "It definitely was put together by the procurement department because you can see how it lends itself to suppliers. It's like they are buying pencils or paper cartons." Bank of America has employed reverse auctions before. For example, it has used Noosh, an e-business auction company, to buy printing services.

In one way, reverse online auctions for media are a variation on the efforts several years ago by dot-com startups such as Adauction. Those efforts largely failed.

"It's sad that our business has come to this," said a media executive about the reverse-auction approach. "But it's not really a surprise."

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