In Answer to Dave Haynes: Will agencies and buyers book spots online?

Dave Haynes over at Screen Media posted a great post+article on his blog: Will agencies and buyers book spots online?. (Thanks for the podium Dave 🙂 )

Wherein he referenced my company, ADCENTRICITY:

(the web site is still in production, sorry – if you want more info, email me at rob {@} adcentricity.com), and he correctly outed me in saying that I would weigh in 🙂 .

Firstly, I’d agree heavily with a lot of what the author of the article and Dave had to say about the current state of affairs. Given how the idea of creating an electronic or web based “buying system” has been tabled to Brands, Agencies and Buyers over the years, in various industries, I’d have to take their side. Planning, Buying or executing on a medium isn’t a commodity board exchange, nor is it “keyword advertising”. There’s an enormous amount of thought and diligence that goes into this business to ensure value creation for the Brands that we all work with. That doesn’t happen on a web site. Assuming that a web platform is going to replace the brains behind or the fun of haggling media is pretty short sighted.

This idea has been thought of before and summarily executed (guillotined) in the past because of poor adoption, poor execution, bad timing, arrogance, etc. Half the time, when people approach creating a solution to satisfy a perceived need in the media space, they “Field of Dreams” it…in other words, they build a solution looking for a problem and don’t take the time to adequately understand what the real pains are and where value creation is really needed. They also may not fully understand who may be threatened and why. To give an example, the magazine industry and newspaper industries both have had systems like this attempted and one has had some success while the other didn’t even make it off the ground.

On the other side of the fence, there have been some great success stories in this area. Spot Runner:
was started in 2003/2004. They built an electronic buying process for Spot Television. It was a fantastically elegant and simple solution that simplified the buying process around TV. It was originally focused on the smaller markets (The restaurant down the street) but has matured past that to be a valuable tool for media buyers in placing television ads top down from local up to national. So much so that WPP (World’s second largest Ad Company with worldwide revenues of over $10 Billion)

just bought 3% of them for $40 Million and plans to use them extensively. To put that into perspective, in 3 years the guys over at spot runner have created an “advertising buying platform” that has a market capitlization of about $1.3 Billion and growing:

WPP plans to use Spot Runner’s web-based platform to help clients target ads across all media channels more effectively at the local level, while maintaining a consistent brand message.

“There is a powerful trend in the advertising arena in which agencies need to focus on creative, but also identify the best vehicles to distribute their creative and reach people wherever they live, work and play,” said Sir Martin Sorrell, CEO of WPP. “Spot Runner’s practical and cost-effective solutions are a great complement to our national capabilities and will help our clients market at the most local level.”

Remember that TV already has a very formal buying process nationally but Spot Runner lends itself to simplifying the initial analysis and decision making process.

Note that I said “Electronic Buying Process” above and not “Electronic Marketplace”. Spot Runner succeeded not because they tried to replace the existing media buying process but because they provided near transparent access to the media to simplify the lives of those buying it and help them better target for their clients.

The Spot Runner “electronic process” was just a starting point, however. To assume that that was or is the be all end all of media buying for TV would simply be irresponsible. To assume that Spot TV is now a commodity to be traded because Spot Runner created a simple way of taking snapshots of media opportunity is irresponsible. But that’s not what they did…they sold it as a tool and simplified a process that was only a starting point.

Yes, as Dave alluded to, ADCENTRICITY is making good strides in the creation of a media buying “tool” for the Digital Signage marketplace in the hopes of solving 5-6 key pains that Brands, Buyers and Networks all feel when they want or need access to the space. We have made good progress both in Canada and the United States and, with the help of the networks and the buyers, we hope to evolve into a company that makes it easier on all sides and benefits everyone in the chain in creating more value for the advertisers.

What we realized very early on though was that as much as we need to have our solution online and public for general use and accessibility (transparency) it will rarely be used by who we would like our real clients to be, which is the media buyers. It will, however, be used extensively internally by account directors to help flight campaigns in the correct areas based on our clients needs, demographics and Designated Market Areas (DMAs) in very short order. When we are asked for quotes, however, it’s not a “go to our web site and try it yourself” approach. We, like most other mediums, receive a call from relationships to come in and see them to work through a campaign’s goals based on the needs of the day. E.g. it starts with I’ve got 78,000 for this channel and need to speak to X demographic in Ontario and Alberta…what do you have? But that’s just the start of the conversation. It’s actually more important for me for the buyers and brands to understand “what” they’re buying and why and how to maximize its effectiveness…that only comes through personal communication, which a “marketplace” approach can’t satisfy. In addition to this, the Media Buyers are the ones who strategically know the needs of their clients that go beyond simple or complex number crunching that a buying tool accomplishes. The Networks and ADCENTRICITY both need to leverage from that knowledge if we’re ever to ensure effective media utilization. Again, a marketplace will never teach me this. Only someone as strategically placed as a Buyer + Agency will help a medium mature.

On the schmooze part of the business that Dave mentioned, hey, I like lunches too 🙂

Ultimately Dave is 100% correct when he says it’s an evolution to get to a more mature level of adoption with some serious traction. It’s a lot of work. No solution presented, no matter who the supplier is, be it ADCENTRICITY, SeeSaw, Google or eBay is going to get 100% adoption and buy in. No “Ad Rep” firm will be able to do this either as a more holistic solution is required to answer the market needs. Each supplier/aggregator/consolidator/buying service in the space will have their own value proposition they bring to the stakeholders in the chain, be it Network, Agency, Media Planner/Buyer or Brand and each stakeholder will ascribe to different solutions for their own needs and the value it brings them.

What I do know, however, is that there’s a tremendous opportunity for both media and brands for those who are first in to really benefit from this as a stronger, aggregated national medium. In the article, it references a “wait and see” attitude. As with anything, 20% (of brands, agencies and buyers) will adopt some type of aggregated solution early and benefit. The other more risk averse will wait until it’s been proven for them. The bottom 20-25% will never step out of their existing LOBs/mediums. This happens in almost every industry with every product – it’s that old adoption Bell curve we all saw at University. The complexity of buying from 50 or 128 or 380 or 2,200 different vendors/networks is a definitive problem and can/will be answered. The demand for some type of buying service does exist in some areas of the market. A friend told me a great story the other day about how one of Toronto’s top media buyers almost pulled out their hair and told them that they’d “never had such a difficult time buying media from an industry”. It doesn’t, however, stop at just being a “aggregated buying solution”. Being able to answer a request for all venues that speak to a particular audience needs to be answered by buying a “consumer profile” and not a “network profile”. The sheer reach attraction of speaking to a common message/campaign through 200,000+ venues (elevators, gas stations, convenience stores, banks, airports, etc) in public spaces in major markets (which comes with a very impressive adjusted monthly reach) is powerful but you need to bring a lot more value to the table for both Buyers and Networks, otherwise you limit the effectiveness of the medium and commoditize both sides and no one wants that…there’s too much value on both sides for that to happen.

Where we’ve actually had the most education has actually been from the successful and growing networks that exist. The more mature networks, who I sometimes refer to as the Network Vanguard (the forward division in an army), have made the space for those who follow, have the media relationships, etiquette and maturity surrounding moving this space forward. Traction and volume do become limiting factors, however. I’m lucky enough to be learning from them and their experiences and doing our best to pour their knowledge into our solution. It’s not a golden egg, but part of the idea here for ADCENTRICITY is to work collectively, with media buyer and network to develop a “tool” that makes it easier to make decisions so that we’re all bringing the maximum value to the top of the food chain, the Brands.

Ultimately, no “marketplace” is going to satisfy the needs of a Buyer in making the decisions they need to for their clients. Media buying decisions begin with a conversation and a relationship. As a consolidation or aggregation service, I don’t believe it’s our job to be the be-all-end-all. I’m hoping that we can be a conversation starter and make it easier to have the conversation for bigger things for those who feel we can benefit their customers and that I can add value to the relationships we create in many more ways then just “aggregation”.