Optimisim reigns at online bazaar

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The concept seems solid and simple enough. Hook up those in need of media with those who have some to sell, and make it convenient, and paperless, via the Internet.

Still, salesmanship can't be overlooked, and the facet of the business that includes personal relationships developed before the handshake occurs, can't be crafted online.

"Traditional media is a business in which my grandmother could probably learn 80% of it in two weeks, but there are nuances that are very difficult," says L. Donald Robinson, former president and CEO of station rep Seltel.

Mr. Robinson, about a year after leaving Seltel, started eMadison, an online service that will offer radio, TV and cable time to media and ad agencies. The service is expected to rollout nationally by the fourth quarter and may offer print next year.


More than 20 companies either are already operating or planning to start in the coming months, touting efficiency and cost savings. Others already are retooling their business models and no longer talk much about entire transactions taking place online, a nod to the need for relationship building in the media business.

Media buyers and reps are largely taking a wait-and-see attitude. Not even an end-to-end system will wholly replace the handshakes, relationships and wining and dining that are intrinsic to traditional media planning, says Neil L. Aronstam, founder and CEO of Independent Media Services, New York.

It is unclear how well the fledgling industry is doing, because few executives are willing to talk numbers. The biggest beneficiaries of the online media services seem to be local advertisers and advertising agencies in small-to-mid-size markets that don't have media planning resources.

For example, furniture marketer Havertys, found the Internet media buys to its liking. Havertys, which spends $16 million annually at 120 TV stations in 46 markets, worked with BuyMedia.com to send its avail requests.

The expediency of the Internet means eight employees in Havertys media department who previously were relegated to "paper pushers," can now be more market focused, says Kristine Lilly, media director of broadcast for Havertys.

"One size does not fit all," says Mr. Aronstam. With "online shortcuts -- you might just get what you pay for.

"The premise of selecting media, other than the most eyeballs for the least dollars is to find the best eyeballs in the appropriate place," he says.

Even the people behind the upstarts are casting a wary eye at the space.

"There's a lot of noise out there," says Jerry Machovina, president-CEO of OneMediaPlace formerly AdAuction.com.

Mr. Machovina, formerly an exec VP-media services for AT&T Broadband & Internet Services, joined AdAuction.com when it focused on selling last-minute distressed inventory. He changed the brand and the strategy, reasoning that media is not a commodity that can be auctioned. Now, he plans to expand the site's reach to TV buys this fall and radio early next year. OneMediaPlace projects its billings will hit $50 million for the full year 2000..


Similar tinkering is under way at competitors, some of which offer inventory on a real-time basis and others geared to media planning and processing avail requests. Some charge transaction fees paid for by the seller and/or commissions that can run as high as 30%. Others charge a licensing fee for using the software platform.

BuyMedia.com, which transmits ad orders and avail requests for premium local cable, network and radio time, claims it will process more than $500,000 in orders this year. Adfusion just received its first round of financing and hopes to launch in October for all forms of media. Two-year-old AdOutlet.com recently received a $25 million capital infusion.

When it went live in January, broadcastspots.com focused on real-time selling of remnant radio inventory at reduced rates. It is now moving to a more comprehensive planning format that will include TV inventory later this year.

"One-third of all media buying in five years will be done over the Internet when companies really think about the cost of negotiation," says Jeffrey Trumper, president-CEO of broadcastspots.com. "There's room for one or two business models. What you're seeing is a bunch of companies that offer a component to that [one-stop] platform."


Online upstarts say they aren't trying to circumvent reps, just make the process more efficient. However, they predict that if the Internet model works, reps will do more in-person troubleshooting for their clients.

That would suit Pat Parker, principal of Garmezy Media, Nashville, just fine. Ms. Parker tried broadcastspots.com's real-time purchasing to buy radio time for an auto parts store in Birmingham, Ala. The entire transaction was conducted online and Ms. Parker thinks she would try it again for markets in which doesn't have relationships.

"I can do it in the middle of the night," she says. "I find it very difficult to reach reps now, even though they've got car phones and pagers."

The benefits of online transactions include sending out numerous avail requests with a few keystrokes, common document sharing and even the first round of negotiation. But despite the technology to do so, online media services say they haven't heard much call for strictly faceless Web transactions.

"Both buyer and seller want negotiating to continue," says Mike Jackson, BuyMedia.com's founder-CEO. "We don't think the process will change. If you streamline it, you don't have to revolutionize the business. You make it more efficient."

Nevertheless, Paula Hambrick of media buying agency Hambrick & Associates, Orland Park, Ill., hasn't found much use for the services yet, even though she sits on the advisory board of broadcastspots.com.

Much of her work involves national buys. She says she could see the Web helping, if a buyer was seeking a last-minute placement or space in a smaller, unknown market.

"The key for all these companies is they have to give you enough stations to choose from," Ms. Hambrick says.

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